When was the last time you thought about your SDCERS beneficiary designations? Over a year ago? Five years? The day you enrolled in SDCERS? Maybe never? Beneficiary designations may seem like a chore you can put off or do once and forget about, but the truth is you should review your beneficiary designations at least once a year to make sure they reflect your current circumstances. For example, beneficiary designations probably aren’t the first thing on your mind when you get married or divorced, have a child, or lose a loved one, but these are all defining life events that may affect who you want to receive your pension benefits when you die.
Active Members (meaning those who are actively employed by the City, Port,* or Airport and contributing to SDCERS, but are not in DROP) are eligible to leave one of three types of death benefits if they die before retiring or entering DROP, and the eligibility requirements are very specific for two of the three types. Importantly, if you die without having designated your surviving spouse as your sole pre-retirement death benefit beneficiary, then your surviving spouse will not be eligible to receive the lifetime Death While Eligible or Industrial Death Benefit, even if all other eligibility requirements are satisfied. Below is a summary of the death benefits provided to Active Members, but please review the Death Benefits Fact Sheet for more in-depth information.
*General Port employees hired or rehired on or after January 1, 2009 (and are not in the General 2024 Plan) must complete five consecutive years of Port employment after each hire or rehire date before they become Members of SDCERS and are eligible to leave a death benefit.
Active Death Benefit – Paid upon the death of a Member who is not yet eligible to retire and whose death is not related to work. This benefit is a refund of the Member’s retirement contributions, plus interest, and up to six months of one year’s salary. This benefit is a set amount determined by a formula contained in the applicable retirement plan document, and it is not a lifetime benefit. The benefit will be paid to the Member’s designated beneficiary(ies). If no beneficiary has been named, SDCERS will pay this benefit to the Member’s estate or, if the estate is not required to be probated, then distributed in the following order of priority: 1) surviving spouse, 2) children, 3) parents, 4) siblings, or 5) next of kin.
Death While Eligible Benefit – Paid upon the death of a Member who is already eligible to retire when they die and whose death is not related to work. The monthly value of this benefit is approximately 50% of what the Member would have received as a monthly pension benefit if they had retired on the date of death, paid in the form of:
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A lifetime monthly payment to the surviving spouse who is married to the Member and named as the primary beneficiary at the time of the Member’s death,
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Or, if there is no surviving spouse, then paid in equal shares to the Member’s minor children until each child reaches the age of 18 (or 21 for Port and Airport Members).
Please note that if the Member leaves behind a spouse who was not named as the sole beneficiary, the surviving spouse will not be eligible to receive the lifetime benefit, even if all other eligibility requirements are satisfied. However, if the Member leaves behind minor children, then the children will be eligible to receive this benefit until they turn 18 (or 21 for Port and Airport Members), regardless of the Member’s beneficiary designation.
Industrial Death Benefit – Paid upon the death of a Member who is not yet eligible to retire and whose death is due to proven work-related causes. The annual value of this benefit is approximately 50% of the Member’s salary, which is paid in the form of:
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A lifetime monthly payment to the surviving spouse who is married to the Member and named as the primary beneficiary at the time of the Member’s death,
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Or if there is no surviving spouse, then paid in equal shares to the Member’s minor children until each child reaches the age of 18 (or 21 for Port and Airport Members).
Please note that if the Member leaves behind a spouse who was not named as the sole beneficiary, the surviving spouse will not be eligible to receive the lifetime benefit, even if all other eligibility requirements are satisfied. However, if the Member leaves behind minor children, then the children will be eligible to receive this benefit until they turn 18 (or 21 for Port and Airport Members), regardless of the Member’s beneficiary designation.
As you can imagine, it may take a while to sort out who gets what if you die without updating your beneficiary designations. Luckily, designating a beneficiary is quick, easy, and you can do it from home by logging in to your SDCERS Member Portal account and clicking “Beneficiary Information” from the left menu. (If you don’t already have a Member Portal account, you can register here.)
You will be able to name beneficiaries to receive different types of death benefits depending on if you are active, in DROP, or retired. You can designate both a Primary and an Alternate beneficiary. When you die, your Primary is first in line to collect the death benefit, while your Alternate receives the benefit only if the Primary is already deceased. For some death benefits, you can name multiple beneficiaries and designate a specific percentage of the benefit to each person. If you choose to do this, make sure your percentages add up to 100%. Lastly, you may also designate a trust to receive any death benefit that is not a continuance or an annuity.