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ACCG Retirement Services: Defined Benefit Pension Plan

The Defined Benefit Pension Plan may be used in conjunction with other retirement plans, as well as Social Security, as a source of income upon retirement.  Considered the most traditional retirement plan, a defined benefit plan is also the most popular type of primary plan offered by local governments. 

What’s in a Name?

This plan is termed "defined benefit" plan because the benefits employees will receive during retirement are set, or "defined," by the plan's terms. The benefit amount is typically based on a formula that considers one's salary and years of service in the organization. This plan provides a lifetime, fixed monthly benefit or the option for employees to choose from several other payment options that will determine the amount of their monthly benefit.

Plan Highlights

  • Benefits in addition to Social Security
  • Lifetime, monthly benefits
  • Optional types of benefit payments for more effective retirement planning
  • Can be used in conjunction with retirement savings plans
  • Death benefits may be available

Payment Options

  1. Life Only
    • Paid for the employee's lifetime only. There is no provision for paying monthly benefits to a beneficiary after death.
  2. Five or 10 Year Certain and Life
    • Paid for the employee's lifetime, but also guaranteed for at least five or ten years. If the employee dies before the end of the certain period, the remainder of the payments for the certain period will be paid to their beneficiary.
  3. Joint and Survivor
    • Employees will receive a monthly benefit paid to them for their lifetime. Upon death, beneficiaries will receive an amount in accordance with the option chosen at retirement. However, if the beneficiary dies before the employee, there will be no additional monthly payments after death.
      • One-hundred percent joint and survivor- the beneficiary will receive the same amount the employee had been receiving
      • Seventy-five percent joint and survivor- the beneficiary will receive three-quarters of the amount the employee had been receiving
      • Sixty-six 2/3 percent joint and survivor- the beneficiary will receive two-thirds the amount the employee had been receiving
      • Fifty percent joint and survivor- the beneficiary will receive one-half the amount the employee had been receiving
  4. Joint and survivor with POP-UP
    • The same as option three, except: if your beneficiary dies before you, your monthly benefit will increase to option one, life only, which is also called the "normal form." This level of benefit payment will be paid for the remainder of your life.

Designating Beneficiaries In Case of Death

Employees will need to designate a beneficiary, or beneficiaries, so that their account balance will be paid to the designated individuals in the case of death. Beneficiaries are strongly encouraged to contact ACCG Retirement Services representatives for a complete description of options.

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