PERA and Survivor Benefits

When dealing with dividing a PERA, one thing that needs to be addressed is survivor benefits.

There are both Pre-Retirement Survivor Benefits and Post-Retirement Survivor Benefits. Each order must specify if one or both of these benefits is going to be awarded and the cost allocation for any post-retirement survivor benefits.

Pre-Retirement Survivor Benefits –

• Pre-retirement survivor benefits (including possible refund of employee contributions plus interest) may apply if the PERA employee dies before starting to receive their PERA pension
• Pre-retirement survivor benefits have no cost to either the Participant or the former spouse.  Therefore, you would want to suggest that that they be included in the draft order so that the former spouse will receive something under those circumstances.
• Pre-retirement survivor benefits available vary depending on the Participant’s marital status and if they have any dependent children at the time of their death.
• Generally, the DRO/QDRO will limit pre-retirement survivor benefits to those benefits attributable to the period of the parties’ marriage (as specified in the Decree for purposes of the PERA division).

Post-Retirement Survivor Benefits – 

• Post-retirement survivor benefits are necessary for payments to continue to the former spouse if the PERA Participant dies first after receiving PERA benefits.
• The usual amount payable to the former spouse is a 50% joint and survivor benefit attributable to the period of the parties’ marriage. There are 25, 75 and 100% options as well.
• Allows the Participant’s future spouse to be treated a survivor for those benefits that were not earned during the prior marriage.
• There is a cost for the post-retirement survivor benefits.  The cost is taken “off the top” and reduces the monthly amount available to be paid by the two parties during their lives.
• If no special language is used, the cost for such survivor protection would be shared proportionality between the parties.
• It is possible to use language that has the entire cost of the survivor protection taken out of only the former spouses share of the PERA benefit.
• See the divorce handbook on the PERA website for an example of the cost of the post-retirement survivor benefit.

Marriage_Dissolution_2013.pdf (mnpera.org)