FRS Pension Option 3 / Joint Lifetime Income

FRS Pension Option 3 is lifetime the lifetime payment option for both the retiree and their spouse. This option is for spousal benefit only, and the reduction is based on the spouse’s life expectancy.


Pension Option 3 is a great choice if the retiree wants to guarantee that their spouse will continue to get the same pension and C.O.L.A. if something was to happen to them. There are a few things to take into considerations before picking pension option 3:


  • This benefit only goes to your spouse. If your spouse predeceases you, then you still have to pay for the decrease in benefit although their life can no long be covered, and you cannot reassign the benefit.
  • If your spouse and you both pass away there is no contingent beneficiary.
  • Your D.R.O.P. amount will be lower because of the reduction
  • The cost of option 3 increases every year. If your C.O.L.A. is 3% per year, that means you’re losing out on that 3% increase each year on whatever the reduction is.


A popular option for people looking to maximize their pension is guaranteed universal life. This is a type of life insurance policy that can take you up to age 120 with level payments and level benefits. One of the major advantages of a life insurance policy is that you can stop paying premiums if something ever happens to your beneficiary, or you can leave it to a contingent beneficiary.