Population: New or Prospective Non-Represented
Frequently Asked Questions
Answers
Q: What are the payment options for my pension benefit?
A: There are five payment options available in retirement:
- A Lump-Sum Payment—You receive your total accrued balance as a one-time, lump-sum payment. You can either roll that sum over to another employer's qualified plan or an IRA to avoid current taxation and possible penalties, or you can accept the payment as cash. If you have a balance less than $1,000, you automatically will receive a lump-sum payment.
- A 50/50 Payment—You receive half of your accrued benefit as a lump-sum payment in cash or to be rolled over. The remaining 50% is then paid out as an annuity option (i.e., Single Life Annuity, 100% or 50% Joint and Survivor Annuity). You must have a balance greater than $1,000 to be eligible for this option.
- A Single Life Annuity—This is the highest monthly benefit payable for your lifetime, with no benefit payable to a beneficiary upon your death.
- A 100% Joint and Survivor Annuity—This is the lowest monthly benefit for your lifetime. This option provides you with a reduced monthly benefit for your life, and your beneficiary would receive the same amount for life upon your death.
- A 50% Joint and Survivor Annuity—This is the normal form of payment for married employees. You will receive a reduced monthly benefit for your life, and your beneficiary would receive 50% of your benefit for life upon your death.
Whether you are single or married, you can designate anyone as your beneficiary. However, if you are married, and wish to name someone other than your spouse, your spouse's consent must be given in writing.
There is a reduction based on the age difference between you and your beneficiary.
If you elect a Joint and Survivor Annuity option and your beneficiary dies within five years of your retirement date, your pension payment will convert to a Single Life Annuity the 1st day of the month after the death. You must notify Benefits Express about the death of your beneficiary and will be required to provide a copy of a certified death certificate.
You must select your form of pension by your effective retirement date. Your selection is irrevocable after your effective retirement date.
Q: When will I receive my last active paycheck?
A: You will receive your final paycheck, which will include any unused and/or accrued vacation and floating holidays, approximately four weeks if you are paid biweekly, or two weeks if you are paid weekly, after your retirement date. Call 1-800-571-0400 and follow the voice recognition prompts for the Business Center—Employee Services if you have any questions about the check.
Q: When will I receive my first pension check?
A: Your first monthly pension check will generally be mailed at the end of the first full month in which you retire. It will include any partial payment for the preceding month(s). Your pension benefit is always sent out the next to the last business day of each month. If you have direct deposit, your account is credited on the last business day of the month. Prior to your first pension check, you will receive a Final Pension Notice that will confirm the form of payment you selected and the amount of your monthly pension benefit.
Q: Where will my pension check be sent?
A: Your pension check or stub (if you have your check directly deposited) will be mailed to your mailing address unless you have a check mailing address on file with SAP. Please verify that your correct address is on the SAP system. If your address changes, you must notify the Company in writing at:
PSEG Business Center—Employee Services
80 Park Plaza T-23
Newark, NJ 07102
List your name, new address, employee number, and the effective date of the change. Your change must be received by the 15th day of the month to be effective the following month. Changes cannot be processed by phone.
If you had direct deposit as an active employee, it will continue in retirement. If you would like to sign up for direct deposit, call 1-800-571-0400 and follow the voice recognition prompts for the Business Center–Employee Services.
Q: Which forms do I need to return?
A: Before your effective date of retirement, you need to return the Pension Election Authorization Form to Benefits Express.
Optional forms:
- Federal W-4P Form (If no tax withholding election is made, your pension check withholding will be at married with three exemptions)
- NJ State W-4P (If no tax withholding election is made, no tax monies will be withheld)
- Direct Deposit Form (Complete only if you are not currently having your paycheck directly deposited or you want to cancel your current direct deposit election)
These forms should be sent directly to the addresses on the forms.
Q: How much federal income tax should I withhold?
A: Your pension benefit is subject to federal and (in most locations) state income taxes. We advise you to consult with a tax advisor or accountant when deciding how much you should withhold. Income tax liability is different for everyone and when determining the amount of tax that should be withheld you should take into account your entire income in retirement.
Q: When should I apply for Social Security?
A: You should apply for Social Security benefits through the Social Security Administration within three months before you are eligible to begin receiving payments.
Q: What happens with my Thrift Plan account?
A: At retirement, you may receive your Thrift Plan account balance in periodic partial withdrawal, a total lump sum, or in annual or quarterly payments up to 10 years. You can elect to have an amount or percentage of your balance withheld to pay taxes. You also can elect to have the taxable portion of your distribution rolled over. You can defer receiving your benefit. You must start taking minimum withdrawals by the April following the year in which you attain age 70½. You will receive a minimum distribution from your account each year that you continue to have a balance. Your minimum distribution requirement will end when you deplete your account or take a lump-sum payment.
Q: If I have a loan from the Thrift Plan, do I have to pay it off before I retire?
A: No. Outstanding loan balances may be repaid up to 60 days after retirement by calling 1-800-571-0400, and following the voice recognition prompts to speak with a Benefits Express representative. Any balance after 60 days is classified as a distribution to you and is subject to any applicable tax consequences.
Q: What deductions will be taken from my pension check?
A: All deductions stop at retirement except for Federal income tax and your health care premium as long as your pension is big enough to support everything. However, the following deductions will continue subject to your authorization:
- State income tax
- Medical coverage for retirees
- Property and casualty insurance
- Long term care insurance
- Charitable contributions
- Matching gift program
In addition, you can continue participation in the Group Legal Plan with premiums being taken from your checking or savings account.
Q: Who pays for health care in retirement?
A: If you are age 55 or older with at least five years of service or are approved for LTD benefits, you are eligible for retiree medical benefits until you are eligible for Medicare or turn age 65, whichever is earlier. You pay 100% of the cost for coverage.
Q: When I retire, what will happen to my medical/dental benefits?
A: If you are eligible for and elect coverage under the Medical Benefits Plan for Retirees, your medical benefits are effective the first of the month following your retirement. You will be eligible for retiree medical benefits until you are eligible for Medicare or turn age 65, whichever is earlier. If you don’t enroll in the Medical Benefits Plan for Retirees, your active medical and dental coverage ends at the end of the month you retire. Retiree dental coverage is not available.
You also have the right to continue medical and/or dental coverage under COBRA. COBRA allows you to continue your active plan coverage for a specified period of time. However, you are responsible for paying the full cost of coverage, plus a 2% administrative fee. Please note that after your specified period of time runs out, all coverage under COBRA ends and you will have no medical or dental insurance coverage through PSEG. You may not enroll in medical benefits for retired employees at that time.
Medical Coverage for Retirees
- You are responsible for paying 100% of the cost for this coverage.
- You may change your coverage at any time. You can change your medical coverage during the year without having to wait until annual enrollment. If you are dissatisfied with the medical program you selected or if you are enrolled in an HMO or POS medical option and your doctor or specialist leaves that plan, you can change your medical program effective the 1st day of the following month.
Prescription Drug Coverage for Retirees
- As a retiree, you are eligible for the Prescription Drug Program—which
is made up of the Retail Program and the Mail-Order
Program:
- The Retail Program should be used for short-term medications. You take your ID card and prescription with you to a participating pharmacy and pay 20% of the cost for the medication for up to a 30-day supply of each generic drug and brand-name drug when no generic is available. However, if the pharmacy dispenses the brand-name drug you will pay the difference between the brand-name drug and the generic plus the brand-name payment and PSEG will pay the rest. You do not have to meet a deductible, and there are no claim forms to submit.
- The Mail-Order Program can save you money on long-term or maintenance prescriptions. You mail in your Mail Order Form to the address on the form, along with your prescription. You pay 10% of the cost for a 90-day supply of the medication; PSEG will pay the rest! You do not have to meet a deductible, and there are no claim forms to submit.
Dental Coverage for Retirees
Retiree dental coverage is not available. When you retire, you may be eligible to continue your active dental coverage for a specific period of time through COBRA. For more information or to enroll for COBRA, call 1-800-571-0400 and follow the voice recognition prompts to speak with a Benefits Express representative.
You must call 1-800-571-0400 and follow the voice recognition prompts to speak with a Benefits Express representative in order to make your retiree medical election or to enroll for COBRA. Your coverage does not carry over automatically into retirement. When you call, tell the representative the date you are retiring and what your election specifically is.
Q: Will retiree medical contributions change annually after retirement?
A: Most likely they will. Experience indicates that the cost of retiree coverage increases each year.
Increases could continue each year until you become eligible for Medicare. At that time, you are no longer eligible for coverage through PSEG.
Q: Is vision care included in retiree medical benefits?
A: There is no routine vision coverage for retirees enrolled in a Traditional Deductible option or Point-of-Service (POS) option. Some of the retiree HMOs do provide some routine vision coverage. It is recommended that you verify how this coverage works for each HMO you are interested in before enrolling.
Q: What happens to my retiree medical benefits if I move out of state?
A: To determine what medical coverage would be available to you in your new area, you need to call 1-800-571-0400 and follow the voice recognition prompts and a Benefits Express representative will discuss with you the medical programs available in your new location based on your new zip code.
Q: If my spouse has health insurance, can we elect to stay with my spouse's insurance?
A: Yes, if your spouse is currently enrolled in another health plan and you elect to be covered as a dependent under that plan. However, you can enroll in the Medical Benefits Program for Retirees at any time, as long as you are not eligible for Medicare and had not previously elected to continue active coverage through COBRA.
Q: If I die before my spouse, is my spouse eligible for medical benefits?
A: If you should die, your surviving spouse can participate in the Medical Benefits Program for Retirees for a specified period of time through COBRA, but he or she must pay 102% of the cost for coverage. He or she will receive information in the mail explaining the benefit options. If your surviving spouse declines coverage, he or she does not have the option to join the Medical Benefits Program for Retirees at any future time. If your surviving spouse elects coverage and decides to cancel his or her coverage, he or she cannot rejoin the Medical Benefits Program for Retirees at any future time.
Q: What happens to my health insurance when I turn 65 or become eligible for Medicare due to disability?
A: Medicare becomes your primary health care coverage when you turn 65, or after your 24th month of receiving Social Security disability benefits. Once you become eligible for Medicare, you're no longer eligible for coverage through PSEG.
Q: Do I have the option of declining enrollment in Medicare and continuing the Company plan as my only coverage?
A: No. Once you become eligible for Medicare, you're no longer eligible for coverage through PSEG.
Q: Will I still have group term life insurance coverage after I retire?
A: Active coverage ends on your last day of active employment with the Company. Retiree life insurance coverage is not available. You can convert your active group coverage to an individual policy by contacting MetLife and paying them directly for your premiums.
Q: If I die before my spouse (or non-spouse beneficiary), is my spouse (beneficiary) eligible to receive benefits from PSEG?
A: In the event of your death before your spouse (or beneficiary), your spouse (beneficiary) should call 1-800-571-0400 and follow the voice recognition prompts to speak with a representative. Your beneficiary may be eligible for pension benefits (if you elected a Joint and Survivor option) and/or Thrift Plan benefits. However, only a spouse is eligible for health benefits.
Q: What is a Postretirement Supplemental Health Benefits Plan account?
A: If you participated at any time in the Postretirement Supplemental Health Benefits Plan while an active employee, the money you set aside from your pay on an after-tax basis can be used for unreimbursed health care expenses in retirement or for medical costs incurred by a surviving spouse, including premium payments in the event of your death. Money placed in the trust, including interest, is available to use after retirement.
Effective January 1, 1999, the Company started contributing $75 a year to the account of each employee with 25 or more years of service. Active employees did not have to make contributions to the retiree Health Expense Reimbursement Account in order to receive the Company contribution.
At the time you retire, and every annual enrollment thereafter, you make an election to determine how to use money from the account for the coming year. The money in the trust can be used to contribute to medical premiums and/or a specific amount can be designated to set up a Health Care Reimbursement Account so you can reimburse yourself for health care expenses not covered by other insurance plans, including Medicare.
Q: What happens to my reimbursement accounts after I retire?
A: Health Care Reimbursement Account—You may submit claims for expenses incurred through the end of the month in which you retired. You can claim expenses for the amount of money you elected to put into your account (even though it is not all paid in). You may continue contributions on an after-tax basis to claim reimbursement for expenses incurred after retirement (up until the end of the year following retirement). A 2% administrative fee will be charged in the year following retirement (if an election is made) to continue this benefit. Information about continuation of this account will be sent to you by Benefits Express. You can contact SHPS, the reimbursement account administrator, for account balances and/or any questions regarding your account by calling 1-800-571-0400 and following the voice recognition prompts.
Dependent Day Care Reimbursement Account—You cannot make any contributions after retirement. You may claim reimbursement for expenses incurred through the end of the month in which you retire. You are only entitled to money you actually put into your account. You can contact SHPS, the reimbursement account administrator, for account balances and/or any questions regarding your account at 1-800-571-0400 and follow the voice recognition prompts.
Q: What happens to my long term disability insurance when I retire?
A: Your long term disability coverage will end and cannot be continued in retirement.
Q: What happens to my long term care coverage when I retire?
A: Your long term care coverage can continue. You will be notified directly by a representative from the insurance company about continuing coverage. If you wish to continue, your premiums can be paid by direct billing from the insurance company or through payroll deductions from your pension checks.
Q: What will happen to my Group Universal Life/Group Variable Universal Life (GUL/GVUL) Insurance after retirement?
A: GUL/GVUL Insurance coverage is portable and you can take it with you at retirement. A plan representative will contact you about your options if you currently are enrolled or you can contact a plan representative by calling 1-800-571-0400 and following the voice recognition prompts.
Q: If I have any questions before I retire, whom can I contact?
A: If you have any questions about your retirement, please call 1-800-571-0400 and follow the voice recognition prompts to speak with a Benefits Express representative.
Q: What should I do if I have direct deposit and change my bank account?
A: Notify Benefits Express at 1-800-571-0400, follow the voice recognition prompts to request a new Direct Deposit form. Complete the form and send it and a deposit slip or a voided check from your new account to the address shown at the top of the form. Note: Do not close your old account until the first check is deposited in your new account.
Q: What should I do if I become eligible for Social Security benefits?
A: Apply for your Social Security benefit through the Social Security Administration within three months before you're eligible to begin receiving payments by calling 1-800-SSA-1213. If you're late in applying, your benefit may be delayed.
Q: What should I do if my spouse or I become eligible for Medicare coverage?
A: Apply for Medicare benefits through the Social Security Administration by calling 1-800-SSA-1213 and notify Benefits Express as soon as possible after you are approved for coverage by calling 1-800-571-0400 and following the voice recognition prompts to speak with a Benefits Express representative. Once you or your spouse becomes eligible for Medicare, you're no longer eligible for coverage through PSEG.
Q: What should I do if I need health care and the Company is my primary provider?
A: Use your medical ID card to let the doctor or hospital know about your coverage. If you belong to an HMO, you must receive care from a provider in the network (unless it is an emergency). If you are enrolled in a Point-of-Service option, you may receive care in- or out-of-network. If you are enrolled in a Traditional Deductible option, you may receive care from any physician. Submit any claims as required.
Q: What should I do if my spouse dies before me?
A: If your spouse's death is within five years of your retirement date, notify Benefits Express by calling 1-800-571-0400 and following the voice recognition prompts. A Benefits Express representative will assist you in changing your pension benefit to a Single Life Annuity if you previously elected a Joint and Survivor Annuity. The Benefits Express representative can also assist you to:
- Change your medical coverage from You + Spouse or You + Family.
- Change your Thrift Plan beneficiary.
Q: What should my spouse do if I die before him or her?
A: Your spouse may be eligible to continue health care coverage under the Company plan through COBRA, and receive other benefits. Your spouse should call 1-800-571-0400 and follow the voice recognition prompts to speak with a Benefits Express representative.