DERP Plus Benefits

When you’re preparing to retire, there are many decisions you must take into consideration. One of your most important financial decisions is around your DERP Pension Benefit options.

At the time you apply for your DERP Pension Benefit, you will choose one of four options: maximum or one of three joint and survivor options.

When you select a joint and survivor option for a beneficiary, you are ensuring that upon your death your beneficiary will continue to receive a monthly DERP Pension Benefit for the remainder of their lifetime. Depending on the decision you make, your monthly DERP Pension Benefit can pay 100% of the benefit upon your death or a lower percentage of 75% or 50%. You choose which option will meet your needs and those of your loved ones.

Since your decision affects the amount of your monthly DERP Pension Benefit, the following information is designed to help you make an informed decision.

Important: Once retirement begins you cannot change your option or your joint and survivor beneficiary. This is a permanent decision.

Joint and Survivor Benefit Options

• Maximum – This selection provides you with the highest monthly DERP Pension Benefit payment for your lifetime. You are the only one to receive monthly lifetime benefits. Payments cease upon your death, and you do not elect a beneficiary.
• Joint and Survivor – This selection provides a reduced monthly DERP Pension Benefit to you and your beneficiary for life. Joint and survivor options can be 100%, 75%, or 50% of the amount you will receive prior to death and is calculated based on the assumed life expectancies of both you and your beneficiary.
  • Because the joint and survivor benefit covers two lifetimes, your monthly DERP Pension Benefit is reduced.
  • If you are married, your spouse must be the designated beneficiary for at least a 50% joint and survivor benefit unless they formally consent to you electing the maximum benefit option.
  • If you are married, your spouse must formally consent if you designate a joint and survivor benefit option for another beneficiary.
  • If your beneficiary passes away before you, your DERP Pension Benefit will be increased to the maximum benefit as if no joint and survivor option had been elected.

To obtain an estimate of your DERP Pension Benefit with joint and survivor options, email Help@DERP.org. You will need to include your expected retirement date and your beneficiary’s date of birth. If you were hired prior to January 1, 2010 and are anticipating sick and vacation leave or paid time off payout, please include this information, too.

A disability retirement benefit is available for all active members of DERP. This benefit provides important protection for you and your loved ones, if you become totally and permanently disabled, whether on-the-job or off-the-job. Disability retirement benefits provide a monthly lifetime benefit if you meet eligibility requirements and must stop working before you reach normal retirement age.

• On-the-Job
  If you become permanently disabled because of an accident or other medical reason in connection with your employment, you may be eligible for an on-the-job disability retirement benefit. This benefit would be based on the higher of 20 years’ service credit or actual service plus 10 years. In either case, the service credit cannot exceed the service you would have earned at age 65. There are no minimum years of service requirements for this benefit. To qualify for an on-the-job disability, you must:
1. Submit proof of a work-related injury or disease.
2. Separate from employment within 24 months of the work-related injury or disease.
3. Apply in writing for a disability retirement within 90 days of your employment separation.
4. Qualify for a disability benefit as determined by Social Security standards.
• Off-the-Job
  A disability caused by sickness or other medical reason, not connected to the job, is classified as an off-the-job disability. The off-the-job disability benefit is 75% of the benefit calculated for an on-the-job disability. To qualify for an off-the-job disability retirement, you must:
  Have at least five years’ service credit.
1. Terminate employment with the employer due to medical reasons.
2. Separate from employment within 24 months of the injury or disease.
3. Apply in writing for a disability retirement within 90 days of your employment separation.
4. Qualify for a disability benefit as determined by Social Security standards.
• Temporary Early Retirement Temporary early retirement (pending approval of a disability application) is available to active, vested members who are at least age 55 (or at least age 60, for members hired on or after July 1, 2011). This benefit is designed to provide income to the member during the process of fulfilling the disability application requirements. Temporary early retirement is limited to three years.

If you qualify for disability retirement, your DERP Pension Benefit becomes effective the first day of the month following your termination of employment with the city, Denver Health and Hospital Authority, or the Denver Employee Retirement Plan because of the disability.

To initiate the process for a disability retirement:

1. Review DERP Disability Benefits guide.
2. Complete, sign, and submit the required forms to Help@DERP.org.

If you are an active member and die while employed with the city, Denver Health and Hospital Authority, or the Denver Employee Retirement Plan, there are death benefits available for your beneficiary.

In most instances, the death benefit is a monthly lifetime DERP Pension Benefit for the designated beneficiary. If you are married, your spouse will receive the lifetime DERP Pension Benefit, unless your spouse formally consents to and waives this right and consents to another designated beneficiary. If there you are not married, any children under age 21 will receive a benefit until they reach age 21. If you are not married and have no children under age 21, the designated beneficiary will receive the benefit. You should designate a beneficiary upon enrollment.

• On-the-Job
  If a death is classified as on-the-job, your beneficiary will receive a monthly lifetime DERP Pension Benefit with service credit calculated as the higher of 15 years’ service or actual service plus five years. In either case, the additional service credit may not exceed the service which you would have earned by age 65. Benefits are calculated in accordance with the standard retirement calculation using the adjusted service credit. There are no minimum service requirements for this benefit.
• Off-the-Job
  If a death is classified as off-the-job, your beneficiary will receive a monthly lifetime DERP Pension Benefit that is 75% of the on-the-job death benefit. There are no minimum service requirements for this benefit.
• Benefits to Children Under 21
  If you die without a surviving spouse but with children under age 21, any benefit which would have been paid to the spouse will be paid to the child(ren’s) guardian. Monthly benefit payments will continue until your children reach age 21.
• Death Benefit After Retirement
  Your DERP Pension Benefit may be payable to your spouse or beneficiary after your death if you have elected a Joint and Survivor Option at retirement. Upon your death, DERP will pay a monthly lifetime DERP Pension Benefit to your designated beneficiary. If your beneficiary passes away before you, your DERP Pension Benefit will increase to the maximum benefit as if no Joint and Survivor benefit had been selected.

It’s important to review and update your beneficiaries periodically to ensure that any benefits payable upon your death are paid as you desire. Log in to your MyDERP.org account and click the Beneficiary button.

Reporting the Death of a DERP Member

If you are the loved one of an active, inactive, or retired member of DERP, it is important to report the death as soon as possible to prevent delays in payments to beneficiaries. You can email Help@DERP.org.

We will need the following information:

• Deceased’s
• Full name, address, and birth date
• Date of death
• DERP ID or the last four of the Social Security Number
• Your relationship to the deceased
• Primary contact in case more information is required
• Full name, address, and phone number

When you retire from active service, a single lump-sum death benefit payment is available to be paid upon your passing to your beneficiary, or to your estate if your beneficiary is no longer living. The following is a breakdown of the benefit amount based on retirement type:

• Normal, Rule-of-75, Rule-of-85, Disability Retirement (after age 65) and Temporary Early Retirement – The lump-sum death benefit is $5,000.
• Disability Retirement before age 65 – The lump-sum death benefit is 150% of the member’s annualized average monthly salary, limited to $50,000. This benefit reduces to $5,000 upon the disabled member reaching age 65.
• Early Retirement for Tier 1 and 2 Members (hired before July 1, 2011) – The lump-sum death benefit is $2,500 at age 55. This benefit is reduced by $250 for each year of age under 65.
• Early Retirement for Tier 3 Members (hired on or after July 1, 2011) – The lump-sum death benefit is $2,500 at age 60. This benefit is reduced by $500 for each year of age under 65.

Important – Retirement Law allows the lump-sum death benefit to be paid to the retired member in regular monthly installments. These regular payments may be made in 50 or 100 equal monthly installments while the retired member is still alive. This amount will be paid in addition to the regular monthly DERP Pension Benefit. Any remaining balance in the death benefit account will be paid to your beneficiary upon your death. Once you have withdrawn the complete death benefit, the payments will stop and there will not be a lump-sum death benefit for the beneficiary.

The Insurance Premium Reduction (IPR) Benefit is a benefit in which DERP contributes towards your monthly health insurance premiums. The amount DERP contributes is a based on your years of service and Medicare status. To be eligible for the IPR Benefit, you must be enrolled in group health insurance offered by DERP. In addition, the IPR benefit is only available to members and spouses receiving a joint and survivor benefit. The IPR is $12.50 per year of service credit, per month, for non-Medicare retirees; $6.25 per year of service credit, per month, for Medicare retirees.

The normal retirement age under Social Security for Tier 1 and 2 members (hired before July 1, 2011) was extended beyond age 65 for individuals born in 1938 or later. If you are in this group, DERP will increase your monthly retirement benefits to help “make-up” for delayed Social Security benefits.

The Social Security Make-Up benefit is payable beginning at age 62, or your retirement date, whichever is later. This benefit will not be paid before your DERP Pension Benefit has begun. The benefit calculation is based on a percentage of your estimated primary Social Security benefit times service credit during which the contributions were made to Social Security (up to a maximum of 35 years) divided by 35.

The Social Security Make-Up Benefit has been discontinued for Tier 3 members (hired on or after July 1, 2011).

Email Help@DERP.org for help on calculating your Social Security Make-Up Benefit.