Retirement Options A, B, and C

When you retire, you must choose one of three options under MGL Chapter 32 § 12. The choice is irrevocable after your first retirement payment — you cannot change it later — so understand the trade-offs before you elect.

All three options pay the same total expected benefit over a typical lifetime. The difference is who gets paid, when, and what happens at your death.

Option A — maximum allowance, no continuation

You receive the largest monthly allowance the formula produces. When you die, payments stop. Your designated beneficiary receives no continuing pension.

Choose Option A if: you have no dependents, your spouse has independent retirement income, or you've made other plans for survivors (life insurance, etc.).

Option B — modest reduction, refund of contributions

Your monthly allowance is reduced slightly (typically 1–3% depending on age) so that any unused balance of your member contributions is refunded to your beneficiary at your death. Once your monthly payments have exceeded the balance of your member contributions plus interest at retirement, the refund-on-death goes to zero — but the reduction in your monthly check stays the same.

Choose Option B if: you want to leave something to a beneficiary but don't need to provide them with continuing income, OR you're early in retirement and want to protect against an unexpectedly short retirement.

Option C — joint and survivor annuity

Your monthly allowance is reduced more substantially (the exact amount depends on your age, your beneficiary's age, and Option C tables) so that, after your death, your designated beneficiary receives two-thirds of your reduced allowance for the rest of their life.

You may name only one Option C beneficiary, and the choice is irrevocable. If your Option C beneficiary predeceases you, your allowance "pops up" to the Option A maximum for the remainder of your life — this is sometimes called the Option C pop-up. (Note: pre-2012 vs. post-2012 rules apply slightly differently; verify with the board.)

Choose Option C if: you have a spouse, partner, or other dependent who relies on your income and you want to provide them with lifetime continuing payments.

A simplified comparison

	Your monthly check	At your death
Option A	Largest	Stops
Option B	Slightly reduced	Refund of remaining member contributions to beneficiary
Option C	More reduced	Two-thirds continues to your one named beneficiary for life

How to decide

The board provides a benefit estimate showing all three options before you retire. We strongly recommend a counseling appointment to walk through the numbers, particularly if you're considering Option C — the right answer depends on your spouse's age, their independent income, and your own life expectancy.

You may also wish to consult a financial advisor or estate planner. The board cannot give individual financial advice; we can explain the formulas and run the numbers.

Common questions

Can I change my option after retirement? No. The choice becomes irrevocable on the date your first retirement check is issued.

What if I get divorced after retirement? Your Option C beneficiary designation is governed by your retirement application, not by your marriage. A divorce does not automatically remove an ex-spouse as your Option C beneficiary. See Domestic Relations Orders.

What if I'm not married? Option C is available to any one named beneficiary — typically a spouse, but it can also be an unmarried partner, an adult child, a parent, or another individual. Some restrictions apply if the beneficiary is much younger than you (an IRS minimum distribution rule); the board will explain at counseling.