Q&A: Supplemental Guaranteed Lifetime Income (SGLI)
What is SGLI?
Senate Bill 55 was passed during the 2019 Legislative session, permitting ERS retirees to use funds in Peach State Reserves to purchase a supplemental annuity from ERS.
Who can purchase a SGLI?
Only ERS retirees can purchase a Supplemental Guaranteed Lifetime Income (SGLI) annuity.
Why would I want to purchase a SGLI annuity?
Members with a balance in Peach State Reserves will need to manage their PSR funds and withdrawals throughout their retirement. This is especially important for GSEPS members who could have a significant portion of their ERS retirement benefit in the 401(k) plan. SGLI is a way to annuitize PSR funds, guaranteeing you will receive a lifetime monthly income from those funds. Depending on your circumstances, annuity purchase rates, and financial market performance, a SGLI purchase might be right for you.
When can I purchase a SGLI?
Starting January 1, 2021, ERS retirees will be able to purchase up to two SGLI annuities. All SGLI purchases must be completed before December 31 of the year in which you attain age 70 or, if you first start your ERS retirement after age 70, December 31 of the year in which you start your ERS retirement.
Does it matter if I took a PLOP?
Retirees who elected a Partial Lump Sum Option (PLOP) at retirement are not eligible to purchase a SGLI annuity.
What funds can be used towards a SGLI?
Only pre-tax, fully vested funds from your Peach State Reserves 401(k) and/or 457 accounts can be used to purchase a SGLI annuity.
Is there a minimum amount to purchase a SGLI?
The minimum amount of any purchase is $25,000.
Does it matter if my account funds are ROTH?
At this time, you cannot use funds in a ROTH account to purchase a SGLI annuity in ERS.
Are optional forms of payment available for SGLI?
Eligible retirees can choose from any optional form of payment available under ERS for their SGLI annuity (with the exception of a PLOP). The SGLI form of payment does not need to be the same as chosen for your ERS monthly benefit.
Will post-retirement benefit adjustments increase the SGLI annuity?
No, SGLI annuities are not eligible for post-retirement benefit adjustments that may be granted by the ERS Board of Trustees. If you are interested in receiving increases on your SGLI annuity, you can choose an optional form of pension that starts out smaller and includes guaranteed increases each year.
Is there a SGLI maximum?
The total monthly SGLI annuity amount(s), together with your monthly ERS pension, cannot exceed 90% of your highest monthly earnable compensation while an active member of ERS.
How can I get more information about SGLI?
Factors for use in calculating the cost of SGLI annuities will not be available until the end of the 2020 calendar year. Further information concerning the purchase of SGLI annuities will be posted on our website when it is available.