Frequently Asked Questions about the Accidental Death Benefit
1) What are TRS' accidental death benefits?
Accidental death benefits are a type of Qualified Pension Plan (QPP) death benefit that may be paid when a working TRS member dies due to an accident incurred on the job or due to COVID-19. The benefit is initially payable to the member's highest-ranking statutory beneficiary, who is a surviving relation of the member according to a schedule set by New York State law.
Accidental death benefits replace any ordinary (non-accidental) QPP death benefits that have not already been disbursed. There is no accidental death benefit under the Tax-Deferred Annuity (TDA) Program.
2) Why are members who died due to COVID-19 eligible for accidental death benefits?
New York State passed a law in May 2020 that established criteria for when active and certain recently retired members who died due to COVID-19 qualify for accidental death benefits.
3) How much is the accidental death benefit?
A statutory beneficiary can elect to receive the accidental death benefit as lump sum or annuity.
The lump sum is the same amount payable as the ordinary death benefit, which can be up to three times the member’s annual wages plus the amount of any returnable QPP account balances, reduced by any ordinary death benefit already paid.
The annuity equals 50% of the member’s annual wages per year, with an actuarial offset of any ordinary death benefit already paid. This amount is paid annually, in monthly installments. Annuity payments are paid retroactive to the date of the member's death, and the total payment under the annuity option will always be equal to or greater than the amount payable under the lump-sum option.
Note: The amount of the accidental death benefit may differ if the member was in Tier I or Tier II.
4) Do all members who died due to COVID-19 qualify for accidental death benefits?
No. The benefit is limited to members who were working shortly before they contracted COVID-19. Members who, as of March 1, 2020, were retired, separated from service, or were not working for any other reason do not qualify for this benefit.
The law specifically requires that all three of the following criteria must be met:
The member must have reported in person to a worksite other than the member's home on or after March 1, 2020.
The member must have contracted COVID-19 within 45 days after physically reporting to work.
COVID-19 must have caused or contributed to the member’s death on or before December 31, 2020.
5) Who is eligible to receive accidental death benefits?
An eligible member's highest-ranking statutory beneficiary is paid the accidental death benefit. The following is the list of statutory beneficiaries, from highest rank to lowest:
A surviving spouse who has not renounced survivorship rights in a separation agreement, until death or remarriage;
Surviving children until age 25;
Dependent parents, who received significant financial support and/or significant caregiving services from the member during the year prior to the onset of the member's illness;
Any other person who qualified as a dependent on the member's final federal income tax return (or the return filed in the year immediately preceding the year of death), until that person reaches age 21.
No other persons are eligible for accidental death benefits, including domestic partners and individuals designated by the member as QPP beneficiaries who do not fall within one of the above categories.
Note: If the member was in Tier I or Tier II, any children must be under age 18, and other dependents are not eligible.
6) What happens if two or more persons are the highest-ranking statutory beneficiaries?
In these cases, the benefit is split evenly for as long as more than one beneficiary qualifies. This can happen when two or more children or both dependent parents are the highest-ranking statutory beneficiaries.
7) Can an accidental death benefit annuity pass from one statutory beneficiary to another?
Yes. If a statutory beneficiary who is receiving the annuity dies or becomes ineligible, the annuity will pass to the highest-ranking statutory beneficiary who remains eligible. If there are no remaining eligible statutory beneficiaries, the benefit will terminate.
For example, suppose that a member's spouse and a 12-year-old child are the current statutory beneficiaries. The annuity would be paid to the spouse, as the higher-ranking statutory beneficiary. If, in five years, the spouse becomes ineligible due to remarriage, the annuity would pass to the child, who would be 17 at the time. The annuity would be payable to the child until he or she reaches age 25. At that point, the benefit would terminate because there are no remaining statutory beneficiaries.
8) Will the accidental death benefit annuity ever be less than the ordinary death benefit?
No. If the last remaining statutory beneficiary dies or becomes ineligible and the total annuity payments have not yet equaled the ordinary death benefit, then the remaining difference would be payable as a lump sum to the last living statutory beneficiary, if any. If there is no such person, then this residual lump sum will be paid to the member’s distributees, who are the persons who would receive the member's assets if the member had died without a will.
Additional questions coming soon!