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Benefit Payment Methods

The ORP provides many different benefit payment methods; allowing participants great flexibility in crafting their retirement benefits to meet their personal financial needs. While the plan includes a “Normal Form” of payment (annuity), participants may choose from the other payment methods available from their Provider.

Additionally, participants may draw funds from the plan using different payment methods, and at different times.

The availability of such a wide choice of payment methods can create confusion when trying to choose the best method(s) for any individual participant. Your ORP Provider is prepared to assist you with this decision.

Normal Form Of Payment

The normal form of payment from the ORP is annuity income. Annuities provide lifetime income, meaning that you cannot out-live your income.

  • Married Participants: The normal form of payment for married participants is a Joint and Survivor Annuity. This payment method provides income for the lifetimes of the participant and their annuity partner. The annuity partner can be anyone.

  • Single Participants: The normal form of payment for participants who are not married is a Single Life Annuity. This payment method provides income for the participant’s lifetime.

About Annuity Income

Annuity income provides a stream of income (usually monthly) for the life of the annuitant (the plan participant). This feature, that one can not exhaust their retirement income, is why the ORP includes annuities as the “normal form of payment”.

An annuity can cover one person: Single Life Annuity; or two people: “Joint” or Two Life Annuity.

A Two-Life Annuity provides income for the annuitant and their annuity partner for both of their lifetimes. An annuity partner can be anyone (e.g. sibling; partner; spouse; friend; etc).

Survivor benefits payable under a Two-Life Annuity reflect the type of annuity that a participant purchases. Some annuities ensure distribution of the initial sum used to purchase the annuity; but most do not.

Annuities may also provide a guarantee period, during which benefits will be paid to a beneficiary if the annuitant and their partner (in the case of a Two-Life Annuity) die.

As participants add features to their annuities (e.g. provide for more than one person; provide a guarantee period; ensure all assets are distributed; etc.), the amount of monthly income generally decreases. This is because the insurance company must hold assets in reserve to ensure payment of the additional features, which are liabilities to be supported by your account.

Annuities are provided by insurance companies. ORP participants may draw annuity income from Plan Providers who offer annuities. They may also purchase annuities from any company, using a lump sum distribution from the ORP.

In most cases, annuity purchases are irrevocable. Consequently, participants should carefully consider the role of annuity income in their overall financial planning.


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