Option 1: Maximum Allowance
Highest lifetime payment; stops at your death.
Option 2: 100% Joint & Survivor
Reduced payment for life; your survivor gets the same amount for life.
Option 3: 50% Joint & Survivor
Reduced payment for life (slightly more than Option 2); half continues to your survivor.
Option 4: Social Security Leveling
Larger payment until Social Security age 62, then reduced so that TSERS plus Social Security is about the same as before 62. Based on your SSA estimate of your age-62 benefit. Stops at your death.
Option 6-2: Modified 100% Joint & Survivor
Larger reduction than Option 2; if your beneficiary dies first, your payment rises to the maximum allowance.
Option 6-3: Modified 50% Joint & Survivor
Larger reduction than Option 3; if your beneficiary dies first, your payment rises to the maximum allowance.
The handbook's example: John and Pam
John retires at 57 with 30 years 3 months and a $2,000 maximum allowance. His spouse Pam is 51. Option 4 assumes a $1,000 Social Security benefit at 62. "Ours" applies the factor implied by the handbook's amount for John.
| Option | To John (handbook) | To Pam after (handbook) | Ours, John / Pam |
|---|---|---|---|
| Option 1: Maximum Allowance | $2,000.00 | $0.00 | $2,000.00 / $0.00 |
| Option 2: 100% Joint & Survivor | $1,843.60 | $1,843.60 | $1,843.60 / $1,843.60 |
| Option 3: 50% Joint & Survivor | $1,918.60 | $959.30 | $1,918.60 / $959.30 |
| Option 4: Social Security Leveling | $2,670.00 to 62, then $1,670.00 | $0.00 | $2,670.00 to 62, then $1,670.00 / $0.00 |
| Option 6-2: Modified 100% Joint & Survivor | $1,824.60 | $1,824.60 | $1,824.60 ($2,000.00 if Pam dies first) / $1,824.60 |
| Option 6-3: Modified 50% Joint & Survivor | $1,909.20 | $954.10 | $1,909.20 ($2,000.00 if Pam dies first) / $954.60 |
In the handbook's payment option example, Option 6-3 pays John $1,909.20 and his spouse $954.10. Half of $1,909.20 is $954.60.
We show half of the member's amount, as the option is described.
Handbook: Example of Payment OptionsTSERS doesn't publish the factors used to figure Options 2, 3, 4, 6-2 and 6-3. They depend on your age and your beneficiary's age.
We describe the options in words and show the handbook's one example. Get your amounts from an ORBIT estimate.
Handbook: Example of Payment Options; G.S. 135-5(g)Option 4's higher payment before 62 is figured actuarially. The handbook example can't be reproduced without TSERS's factors.
We show only that the payment drops by your Social Security estimate at 62, as in the example.
Handbook: Example of Payment OptionsRules to know
Every option starts from your maximum allowance under the benefit formula. Option 4 is explained on Social Security and TSERS, and what else your family gets is on survivor benefits.
- Locked in when the first payment is normally due and paid, except: divorce from a spouse beneficiary; return to TSERS service contributing at least three years; or (Option 2 or 3 with spouse beneficiary) spouse dies and you remarry: request within 90 days, benefit re-reduced for the new spouse's age. Handbook: Benefit Payment Options, Permanent Decision and NOTE
- If an Option 2 beneficiary is not your spouse, your reduced allowance cannot be less than half the maximum allowance. G.S. 135-5(g), Option 2
- COLA increases granted before 62 apply to the extra amount being paid then; at 62 the benefit drops to the original post-62 amount plus the percentage (not dollar) increases granted before 62. Handbook: Benefit Payment Options, Option 4
- Disability retirees may choose any option except Option 4. Handbook: Disability Income Plan of North Carolina
- You choose one payment option at retirement. Option 1 (maximum allowance) pays the most and stops at your death.Handbook: Benefit Payment Options, Option 1
- Option 2 pays your survivor the same reduced amount for life. Option 3 pays your survivor half. Options 6-2 and 6-3 work the same way, but your payment goes back up to the maximum if your beneficiary dies first.Handbook: Benefit Payment Options
- Option 4 (Social Security leveling) pays more until 62, then less, so TSERS plus Social Security stays about the same. It's based on an SSA estimate of your age-62 benefit.Handbook: Benefit Payment Options, Option 4
- TSERS doesn't publish option factors. They depend on your age and your beneficiary's. Get exact amounts from an ORBIT estimate.Handbook: Example of Payment Options
- Your choice is locked in once the first payment is due and paid. Exceptions: you divorce a spouse beneficiary, you return to TSERS work for at least three years, or (Options 2 and 3) your spouse beneficiary dies and you remarry, in which case you must request within 90 days.Handbook: Benefit Payment Options, Permanent Decision
Questions
Which option pays the most?
Option 1, the maximum allowance, pays the most each month, but it stops at your death.
Can I change my option later?
Locked in when the first payment is normally due and paid, except: divorce from a spouse beneficiary; return to TSERS service contributing at least three years; or (Option 2 or 3 with spouse beneficiary) spouse dies and you remarry: request within 90 days, benefit re-reduced for the new spouse's age.
What does an option cost in dollars?
It depends on your age and your beneficiary's age. TSERS doesn't publish its factors; get exact amounts in an ORBIT estimate before you choose.
Source: TSERS Handbook, Online handbook, pages modified Nov. 2024 - Oct. 28, 2026 (retrieved Nov. 11, 2026), pages Benefit Payment Options, Example of Payment Options, Disability Income Plan of North Carolina. Also: N.C.G.S. 135-5(g), 135-5(g), Option 2. Last reviewed .