MMC Benefits Handbook
Payment Form Options
Payment of your 409A BEP Benefit will generally be made in the normal form. Other payment form options that you can elect include: the single life annuity, contingent annuity and period certain. If you do not make a timely election, your 409A BEP Benefit will pay in the normal form, which is the BEP's default payment form.
Once your 409A BEP Benefit commences you may not change or revoke your payment form option election.
Normal Form of Payment
Your normal form of monthly payment depends on your marital status when benefits commence.
If you do not have a Spouse on your Benefit Commencement Date, your normal form of payment is a single life annuity.
If you have a Spouse on your Benefit Commencement Date, your normal form of payment is a 50% contingent annuity with your Spouse as the designated survivor.
Single Life Annuity
The single life annuity form of payment provides you with equal monthly payments for as long as you live. No payments are made after your death. If you are married to a Spouse, you must obtain your spouse's written notarized consent waiving his or her rights to a 50% contingent annuity if you wish to elect this option.
Contingent Annuity
The contingent annuity form of payment provides you with a monthly benefit payment for your life and when you die, it will provide a monthly benefit payment for the life of your designated survivor if that person is still living at your death.
When you elect to commence your monthly benefit payment, you select both the designated survivor and the specific percentage of your monthly benefit amount (50%, 66-2/3%, 75% or 100%) to be paid to your designated survivor. When you die, your designated survivor, if then living, will receive the percentage of your monthly benefit you selected for the remainder of his or her life.
If you elect this payment form, a reduction factor will be applied to your monthly benefit to take into account that payment will be made over the course of two lives—yours and in the event of your death, your designated survivor if he or she is still living at the time of your death. Once your monthly payments begin, you may not change the percentage you elected for your designated survivor, nor can you change your designated survivor even if he or she dies before you. If your designated survivor is not living at the time of your death, monthly benefit payments will stop.
However, if your designated survivor dies after your completed election is accepted by the Plan but before your elected Benefit Commencement Date, your election is cancelled and you may make a new payment election. If you do not make a new election, you will receive the normal form of payment based on your marital status at the time of your Benefit Commencement Date.
The following table approximates some common contingent annuity reduction factors (i.e., the reduction factor applied to the single life annuity payment form to account for the longer period over which your benefit may be paid if you select a contingent annuity form of payment). The reduction factor applied to your benefit depends on:
  • The benefit percentage you elect for your designated survivor;
  • Your age on your Benefit Commencement Date; and
  • Your designated survivor's age on your Benefit Commencement Date.
Your age at your Benefit Commencement Date
Designated survivor's age at your Benefit Commencement Date
50%
benefit
66-2/3%
benefit
75%
benefit
100%
benefit
55
50
94.1%
92.2%
91.4%
88.8%
55
94.8%
93.3%
92.5%
90.2%
58
95.6%
94.2%
93.5%
91.5%
62
57
91.1%
88.6%
87.3%
83.8%
62
92.5%
90.3%
89.2%
86.1%
65
93.4%
91.4%
90.4%
87.7%
65
60
89.5%
86.5%
85.1%
81.2%
65
91.3%
88.7%
87.5%
84.0%
68
92.4%
90.1%
89.1%
86.0%
The amount of your reduced monthly payments depends on the benefit percentage you choose for your designated survivor, the age difference between you and your designated survivor, and your age at your Benefit Commencement Date.
Contingent Annuity Example
Sally retires with a vested Accrued Benefit of $1,000 per month and elects to commence her monthly benefit payments at age 65. Sally has a Spouse or Domestic Partner, Jordan who is also age 65 when Sally elects to commence her monthly benefit payments. Sally selects a 50% contingent annuity form of payment and names Jordan as her designated survivor. In this case, Sally's monthly benefit payment will be reduced to $913 ($1,000 × 91.3%) and paid for the rest of her life. If Sally dies before Jordan, a monthly benefit payment of $456.50 ($913 × 50%) will be made to Jordan for the remainder of Jordan's life.
Naming or Changing Your Designated Survivor
Your selection of a designated survivor is subject to the following restrictions:
  • If you have a Spouse and wish to name someone other than your Spouse as your designated survivor, your Spouse must consent. Your Spouse's consent must be in writing, witnessed by a notary public and be made within 90 days prior to your Benefit Commencement Date.
  • If you name a designated survivor who is not your Spouse, the percentage of your benefit that is paid to your designated survivor may be limited by law based on your age and the age of your designated survivor on your Benefit Commencement Date. You will be notified if these limits affect your choice of a survivor percentage and beneficiary.
If you have a Domestic Partner and you wish to elect a contingent annuity with a designated survivor other than your Domestic Partner, you are not required to obtain your Domestic Partner's consent.
Period Certain
The period certain form of payment is a single life annuity combined with a guaranteed payment period. This form of payment provides you with equal monthly payments for your life and guarantees that benefits will be paid for a minimum of 5, 10, 15 or 20 years as you elect (but no longer than your life expectancy), in the event you die before all guaranteed payments are made.
If you die before all guaranteed payments are made, your period certain designated survivor will receive the remaining payments. If you survive the period of guaranteed payments, your monthly benefit will be continued for as long as you live, but no payments will be made to your period certain designated survivor after you die.
If both you and your designated survivor die before all guaranteed payments are made, the commuted value of the balance of the guaranteed payments will be made in a single sum to the executor or administrator as the case may be, of the last to die.
You can elect to change your designated survivor at any time prior to your death. However, if you elect to change your designated survivor after your Benefit Commencement Date and you had a Spouse on your Benefit Commencement Date, you must obtain his/her written, notarized consent to your election.
If you elect this payment form, a reduction factor based on your age will be applied to your monthly benefit to take into account the guarantee period. The longer the guarantee period you elect, the greater the reduction to your monthly benefit.
If you have a Spouse and wish to elect the period certain form of payment, you must obtain your Spouse's written, notarized consent to your election. If you have a Domestic Partner and you wish to elect a period certain form of payment with a designated survivor other than your Domestic Partner, you are not required to obtain your Domestic Partner's consent.
Legal limits based on your age when payments begin may restrict the length of the guaranteed payment period you elect. You will be notified if these limits affect your choice of a guaranteed payment period.
The following table shows the period certain annuity factors:
Participant Age
5 Year
10 Year
15 Year
20 Year
55
99.5%
98.5%
96.3%
93.5%
56
99.4%
98.0%
95.9%
92.4%
57
99.4%
97.7%
95.4%
91.3%
58
99.3%
97.5%
94.9%
90.2%
59
99.2%
97.2%
94.4%
89.1%
60
99.1%
96.8%
93.7%
88.0%
61
99.0%
96.4%
93.0%
86.9%
62
98.9%
96.0%
92.2%
85.8%
63
98.7%
95.4%
91.3%
84.7%
64
98.6%
94.9%
90.3%
83.6%
65
98.5%
94.2%
89.2%
82.5%
66
98.1%
93.5%
88.0%
80.8%
67
97.8%
92.7%
86.7%
79.1%
68
97.5%
91.8%
85.3%
77.4%
69
97.2%
90.8%
83.8%
75.7%
70
97.0%
89.8%
82.2%
74.0%
71
96.8%
88.6%
80.6%
72.3%
72
96.6%
87.4%
78.8%
70.6%
73
96.4%
86.0%
76.9%
68.9%
74
96.2%
84.5%
75.0%
67.2%
75
96.0%
83.5%
74.0%
65.5%
Period Certain Example
Sally retires with a vested Accrued Benefit of $1,000 per month and elects to commence her monthly benefit payments at age 65. Sally has a Spouse or Domestic Partner, Jordan. Sally selects a 10 year period certain form of payment and names Jordan as her designated survivor. In this case, Sally's monthly benefit payment will be reduced to $942 ($1,000 × 94.2%) and paid for the rest of her life. If Sally dies before she has received monthly payments for at least 10 years, Jordan, will receive the monthly benefit payment of $942 until the 10 year period has been met.