Your choices
Maximum Monthly Benefit
Highest monthly benefit, for the retiree's life. At death, payments stop; the beneficiary gets only a prorated payment for the days of that month the retiree was alive. Paid by law if no option is chosen.
The most you can get each month.
Handbook p. 23, Maximum Monthly Benefit; p. 21Option 1: life benefit with refund of the account balance Check with TRS of Alabama
Slightly less than the Maximum. If the retiree dies before receiving payments exceeding the account balance, the rest goes to the beneficiary(ies).
Up to the Maximum, and less by an amount TRS of Alabama doesn't publish.
Handbook p. 23, Option 1; Ala. Code § 16-25-14(j)(1)Option 2: 100% survivor benefit Check with TRS of Alabama
Reduced benefit for life; one beneficiary then receives the same amount for life. Based on the joint life expectancy of retiree and beneficiary.
Up to the Maximum, and less by an amount TRS of Alabama doesn't publish.
Handbook p. 23, Option 2; Ala. Code § 16-25-14(j)(2)Option 3: 50% survivor benefit Check with TRS of Alabama
Reduced benefit for life; one beneficiary then receives half of it for life. Based on joint life expectancy.
Up to the Maximum, and less by an amount TRS of Alabama doesn't publish.
Handbook p. 23, Option 3; Ala. Code § 16-25-14(j)(3)Option 4: other actuarially equivalent benefit Check with TRS of Alabama
A benefit certified by the actuary as actuarially equivalent and approved by the TRS of Alabama Board of Control; the beneficiary's benefit is limited by federal tax law.
Amount set by the actuary.
Handbook p. 23, Option 4; Ala. Code § 16-25-14(j)(4)RSA calculates the Maximum and the option amounts after the application is filed and mails them with Retirement Application Packet Part II. The MOS calculator estimates the Maximum and Options 1, 2 and 3. Handbook p. 21, Important; p. 37, RSA Website
Changing beneficiaries
With Option 2, 3 or 4, a retiree may name a new beneficiary if the beneficiary dies first or they divorce. The benefit is recalculated, and the replacement must be in place two years before survivor benefits become effective. The option itself cannot be changed. Handbook p. 23, Replacement Beneficiary; Ala. Code § 16-25-14(m), (n)
PLOP: Partial Lump Sum Option Plan
Partial Lump Sum Option Plan: at service retirement, a one-time lump sum of 1 to 24 months of the Maximum benefit, in $1,000 steps (minimum rounded up, maximum rounded down to $1,000), with the monthly benefit actuarially reduced. Retire on or after Oct. 1, 2019. Not for disability-only retirees or former DROP participants. 20% federal withholding unless rolled over. Handbook pp. 24-25, Partial Lump Sum Option Plan (PLOP); Ala. Code § 16-25-14(j)(5)
Handbook example: age 60, a $3,300 Maximum. The lump sum can be $4,000 to $79,000. Taking $50,000 costs 50 × $7.38 = $369 a month, leaving $2,931. Handbook p. 25
Monthly reduction for each $1,000, by age at retirement
| Age | Per $1,000 | Age | Per $1,000 |
|---|---|---|---|
| 42 | $6.40 | 59 | $7.29 |
| 43 | $6.43 | 60 | $7.38 |
| 44 | $6.46 | 61 | $7.48 |
| 45 | $6.49 | 62 | $7.58 |
| 46 | $6.53 | 63 | $7.70 |
| 47 | $6.57 | 64 | $7.82 |
| 48 | $6.61 | 65 | $7.96 |
| 49 | $6.66 | 66 | $8.11 |
| 50 | $6.71 | 67 | $8.27 |
| 51 | $6.76 | 68 | $8.45 |
| 52 | $6.82 | 69 | $8.64 |
| 53 | $6.88 | 70 | $8.85 |
| 54 | $6.94 | 71 | $9.08 |
| 55 | $7.00 | 72 | $9.33 |
| 56 | $7.07 | 73 | $9.61 |
| 57 | $7.14 | 74 | $9.92 |
| 58 | $7.21 | 75 | $10.25 |
Monthly reduction per $1,000 of lump sum, based on the Maximum benefit; other options vary.
The lump-sum (PLOP) table and the health-premium age penalty use whole ages. The sources don't say how a partial year is counted.
Age in completed years on the retirement date.
Handbook p. 26; PEEHIP Sliding Scale, Non-Medicare FY2026, slides 1, 4, 6From the sources
- You choose the Maximum Monthly Benefit or one of four options. The Maximum pays the most but stops at your death. If you don't choose, the law gives you the Maximum.Handbook pp. 21, 23
- Option 1 pays a little less and refunds any remaining account balance to your beneficiary. Option 2 pays your one beneficiary the same amount for life; Option 3 pays them half. Option 4 is a custom, board-approved arrangement.Handbook p. 23; Ala. Code § 16-25-14(j)
- TRS of Alabama does not publish option factors. You get the exact amounts for each option with Retirement Application Packet Part II, or an estimate from the MOS calculator.Handbook pp. 21, 37
- With Option 2, 3 or 4 you can name a new beneficiary if yours dies first or you divorce; the new beneficiary must be in place two years before survivor benefits apply.Handbook p. 23; Ala. Code § 16-25-14(m)-(n)
- At retirement you can also take a one-time lump sum (PLOP) of 1 to 24 months of your Maximum benefit, in $1,000 steps, in exchange for a lower monthly benefit for life.Handbook pp. 24-25
- Handbook example: at 60 with a $3,300 Maximum, a $50,000 lump sum costs $7.38 a month per $1,000, or $369, leaving $2,931 a month.Handbook pp. 25-26
Questions
What happens if I don't pick an option?
By law you get the Maximum Monthly Benefit, which stops at your death.
How much less do Options 1, 2 and 3 pay?
TRS of Alabama doesn't publish the factors. You get each option's amount with Retirement Application Packet Part II, and the MOS calculator estimates Options 1-3.
Can I take PLOP and a survivor option?
Yes. PLOP can be chosen on top of the Maximum or an option. The handbook's reduction table is for the Maximum; with another option the amounts vary.
Can I change my option later?
No. You can only name a replacement beneficiary under Option 2, 3 or 4 if yours dies first or you divorce.
Source: TRS Member Handbook, July 2026 edition (back cover "7-2026"), pp. 21, 23, 24-25, 25, 25-26, 26, 37. Also: Code of Alabama Title 16, Ch. 25 and 25A. Last reviewed .