Option 1: Maximum benefit
The basic or maximum benefit, for your life only, with no benefit or refund at your death. Paid if you make no election.
Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(A), (a)(2)Option 2: Guaranteed return
A slightly lower benefit for life. At your death your beneficiary gets a lump sum: your accumulated contributions at retirement minus the annuity part of the payments already made to you.
Option 2 generally results in a payment to the beneficiary if you die within ten to thirteen years after retirement.
Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(B)Option 3: 50% survivorship
A reduced benefit for life; after your death half of it continues for the life of the beneficiary named at retirement.
Typically 5%-15% less than Option 1.
Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(C)Option 4: 75% survivorship
A reduced benefit for life; after your death three-fourths of it continues for your beneficiary's life.
Typically 7%-20% less than Option 1.
Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(D)Option 5: 100% survivorship
A reduced benefit for life; after your death the same amount continues for your beneficiary's life.
Typically 10%-25% less than Option 1.
Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)(E)If you don't choose, you get Option 1. Options 3, 4 and 5 can be taken with a pop-up: if your beneficiary dies first, your payment rises to the Option 1 amount. Group C #2 handout, p. 4, Pop-Up Options; 16 V.S.A. § 1941(a)(2) (Options 3, 4 and 5 may be further reduced so the Option 1 amount resumes if the beneficiary dies first or under a domestic relations order); Treasurer, Pension Group Plan Comparison (Mar. 16, 2021), p. 5 (100%, 75% and 50% with or without pop-ups, actuarially reduced based on age of beneficiary)
The Treasurer's examples: a $1,000 Option 1 benefit
Group C #2: you retire at 65, beneficiary 2 years younger
| Option | You get | Beneficiary | Less |
|---|---|---|---|
| Option 1: Maximum benefit | $1,000 | $0 | — |
| Option 3 (50%) | $924 | $462 | 7.6% |
| Option 3 (50%) pop-up | $915 | $457 | 8.5% |
| Option 4 (75%) | $890 | $668 | 11% |
| Option 4 (75%) pop-up | $877 | $658 | 12.3% |
| Option 5 (100%) | $859 | $859 | 14.1% |
| Option 5 (100%) pop-up | $843 | $843 | 15.7% |
Group C #1: you retire at 62, beneficiary 2 years younger
| Option | You get | Beneficiary | Less |
|---|---|---|---|
| Option 1: Maximum benefit | $1,000 | $0 | — |
| Option 3 (50%) | $935 | $467 | 6.5% |
| Option 3 (50%) pop-up | $928 | $464 | 7.2% |
| Option 4 (75%) | $905 | $679 | 9.5% |
| Option 4 (75%) pop-up | $896 | $672 | 10.4% |
| Option 5 (100%) | $878 | $878 | 12.2% |
| Option 5 (100%) pop-up | $865 | $865 | 13.5% |
With a pop-up, if the beneficiary dies first your payment goes back to $1,000 in these examples. The calculator scales these examples to your own Option 1 amount, as an illustration.
Not settled in the sources Check with VSTRS
VSTRS doesn't publish the factors for Options 2-5. The handouts give one example for each group and typical ranges.
We show your Option 1 amount and the handout example scaled to it as an illustration, clearly labeled. Your real factors depend on both ages.
Group C #2 handout, pp. 4-5The Level Income Option (retiring before 62)
Level Income Option: if you retire before 62, you can take part of your estimated Social Security benefit from VSTRS until 62, then a permanently lower VSTRS benefit after 62, so your total stays level. The share added depends on your age (the younger you are, the smaller it is). Your actual Social Security does not change it after it is set. A survivor option is based on your benefit before the Level Income adjustment. It is cost-neutral actuarially, but if you live far beyond 62 it may have been a poor choice. Group C #2 handout, pp. 5-6, Level Income Option; Group C #1 handout, pp. 5-6; 16 V.S.A. § 1937(h)
Treasurer's exampleVSTRS benefit $800 a month; Social Security estimate at 62 $600. At age 59, VSTRS adds $470: you get $1,270 a month until 62, then $670 from VSTRS plus $600 from Social Security, still $1,270 in total.Matches the handout ($1,270 / $670)
The amount added depends on your age; VSTRS works it out. If you also choose a survivor option, the survivor's benefit is based on your benefit before the Level Income change.
What the sources say
- VSTRS has five options. Option 1 (maximum benefit) pays the full amount for your life only. Option 2 (guaranteed return) pays slightly less, and if you die before getting back your contributions, the rest goes to your beneficiary. Options 3, 4 and 5 pay less for life, with 50%, 75% or 100% continuing to your beneficiary.Group C #2 handout, p. 4, Retirement Options; 16 V.S.A. § 1941(a)(1)
- If you don't choose, you get Option 1.Group C #2 handout, p. 4
- The cut for a survivor option depends on your ages. VSTRS says it averages 5%-15% for Option 3, 7%-20% for Option 4 and 10%-25% for Option 5.Group C #2 handout, p. 4
- Options 3, 4 and 5 can have a 'pop-up': if your beneficiary dies first, your payment goes back up to the Option 1 amount. The pop-up costs a little more.Group C #2 handout, p. 4, Pop-Up Options
- Option 2 generally pays something to your beneficiary if you die within ten to thirteen years after retiring.Group C #2 handout, p. 4
- Level Income Option: if you retire before 62, VSTRS can pay you more until 62 and less after, so your total with Social Security stays about level. The lower amount after 62 lasts for life.Group C #2 handout, pp. 5-6, Level Income Option; 16 V.S.A. § 1937(h)
- Check with VSTRSVSTRS does not publish its option factors. It gives one example for each group, for a $1,000 Option 1 benefit with a beneficiary two years younger.Group C #2 handout, p. 5; Group C #1 handout, p. 5No option factor table is published; your factors depend on both ages.
The Level Income Option is tied to your Social Security estimate: see VSTRS and Social Security. If you die before retiring, survivor benefits apply instead. For yearly increases, see the COLA. The Option 1 amount comes from the benefit formula.
Questions
Which VSTRS option pays the most?
Option 1 (the maximum benefit) pays the most each month, but it stops when you die and nothing is refunded. Every other option pays you less so something goes to your beneficiary.
How much less does a survivor option pay?
It depends on both ages. VSTRS says Option 3 (50%) averages 5%-15% less, Option 4 (75%) 7%-20% less and Option 5 (100%) 10%-25% less.
What is a pop-up?
With Options 3, 4 and 5 you can add a pop-up: if your beneficiary dies first, your payment goes back up to the Option 1 amount. It costs a little more each month.
Source: VSTRS Eligibility for Retirement: Group C #2 handout (Office of the State Treasurer), undated (PDF of Sept. 21, 2012), with 16 V.S.A. chapter 55 as of the 2026 session, pp. 4, 5, 6; Group C #1 handout pp. 4, 5, 6; 16 V.S.A. §§ 1937, 1941. Last reviewed .