Jeff Kempker, CEBS, CRC
LAGERS is well-known for providing protected retirement benefits for Missouri’s local government workers. But many LAGERS members don’t know about another benefit that may be available to their dependents if they die before retiring. These benefits provide monthly payments to an eligible spouse or dependent children of the LAGERS member. It is important for you to understand these benefits as they may affect how you decide to plan for end-of-life circumstances.
Let’s tackle some of the details about this vital benefit. Keep in mind that this blog is addressing possible benefits available before you retire. When you reach retirement, it is a whole other ballgame. Check out this blog for information about retirement payment options.
What determines if a survivor will receive a monthly benefit?
LAGERS is designed to provide monthly income for members and for those who are financially dependent on the member. Monthly payments would start immediately to your spouse or dependent children if you are vested in LAGERS and die while you are working for a LAGERS employer. Monthly payments would begin to your spouse when you would have reached your normal retirement age if you are vested in LAGERS but are not working for a LAGERS employer when you die. Your surviving spouse or dependent children would also be eligible for monthly payments if you are working for a LAGERS employer and your death is caused by your job, even if you are not vested.
Who is eligible for survivor benefit payments?
LAGERS is going to pay your surviving spouse a monthly lifetime benefit that would begin immediately if you are vested in LAGERS and die while you are working for a LAGERS employer. You must be married for at least two years before your death for your spouse to be eligible. But, if your death was caused by your job or an accident, the length of marriage does not matter. As long as you were married when the accident happened or illness started, your spouse would receive a benefit. If you are not married when you die, your dependent children would receive a monthly payment until they are no longer considered dependents.
How much money would the survivor receive?
Your spouse will receive a portion of the monthly benefit you would have received. The amount of the monthly benefit is based on a choice members can elect at retirement called Option A. This option pays your spouse the highest monthly amount. If there is no spouse eligible for a monthly payment, we would pay each dependent child an equal share of 60% of the amount you would have received. These monthly payments will continue to each child until each is no longer considered a dependent. When one child’s payments end because they no longer meet the requirements, the other children’s payments would increase. This way, LAGERS is always paying the same amount.
Who is considered a dependent child?
A child is considered a dependent until they reach age 18 or get married, whichever comes first. The age limit of 18 extends to age 23 if the child continues, without interruption, as a full time student in an accredited college or university. The age limit is extended further, but not beyond age 25, if the child is called away from school for active military duty. A step child could also be considered a dependent if he was legally adopted by the deceased LAGERS member. There is no age limit for a child that has been declared incapable to care for themselves by a court.
How does a survivor apply for these benefits?
If the unthinkable should happen, it is the survivor’s responsibility to apply to LAGERS for these benefits. That is why it is vital that your spouse and dependent children are aware that monthly income may be available and who to contact if needed. It is a good idea to keep a LAGERS brochure or booklet with your important documents.
What if I don’t have a spouse or dependent children?
If you die before retiring and do not have a spouse or dependent children, LAGERS will refund your employee contributions to the beneficiaries you have assigned. If you have not paid any of your own money into LAGERS because your employer pays the full amount for your benefits, and you are not married and have no dependent children, nothing would be paid from LAGERS if you die before retiring.
LAGERS survivor benefits may be an important piece to your financial planning puzzle. Keep these benefits in mind when looking into life insurance or other end-of-life benefits. Tell your spouse and children about LAGERS and who to contact should something happen to you. It is your life, maximize what is available to you by having a thorough understanding of your benefits.
Jeff Kempker, Manager of Member Services