re: Pat Summitt leaves all ‘tangible personal property’ to son Tyler in will

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No it isn't. She just passed an annuity to someone else where he collects almost $15k a month for the rest of his life. This is a classic example of poor government allocation of funds.

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Do you know how much money she made for the state? (I don't, just asking)

Wow. That's a helluva windfall for Tyler.

LINK

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Tyler Summitt also was designated by his mother to be a non-spouse beneficiary of her state pension. When she retired, Pat Summitt opted to collect a monthly benefit of $14,460, or $173,520 annually in 2012. That benefit, with an annual cost-of-living adjustment, is now collected by Tyler Summitt for the rest of his life. Pat Summitt could have opted instead to collect $21,141 per month, or $253,632 annually, without choosing a beneficiary, and the payments would have ended upon her death.

A News Sentinel analysis in 2014 showed that 2,861 Tennessee Consolidated Retirement System retirees who chose non-spouse beneficiaries and their survivors could draw almost $1 billion, assuming they all lived until age 80. Records showed some retirees had chosen beneficiaries as young as infants to receive lifetime pension payments. More than one-third of the 2,861 beneficiaries were younger than 40 years old at the time of the retiree’s retirement, records showed.

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Why is this news?

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No it isn't. She just passed an annuity to someone else where he collects almost $15k a month for the rest of his life. This is a classic example of poor government allocation of funds.

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Life expectancy of 60 year old female = 25 years = $6,342,300 in payments

Life expectancy of 22 year old male beneficiary = 55 years = $9,543,600

However, when you apply even a 4% discount rate you get a present value of $4,005,215 for Pat's life and a PV of $3,855,575 for Tyler's life.



ETA: The cost of living increases aren't always all they're cracked up to be either. CPI is up 1.18% annually since 2012, for instance.

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High profile state and federal employees have some pretty sweet medical plans.

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And the tax payers pay all of the costs instead of the insurance company?

The taxpayers and insurance company's policy holders are all included in the same demographic.

I know. I don't have much exposure to public funds, but I see a number of private ERISA plans and they never have annuities based on lives of someone other than participant/spouse. You might see a 10 year annuity where someone else can be beneficiary, but not this.

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My remark was made in reference to a post regarding the possibility that she had major out of pocket medical expenses.

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She likely did.

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I think it's reasonable to suppose she had ample medical coverage.

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I think it's more likely that she had enough money to cover the out of pocket stuff. And since I've actually met the woman and married into family of hers, I'll trust my opinion more than yours.

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I don't have much exposure to public funds, but I see a number of private ERISA plans and they never have annuities based on lives of someone other than participant/spouse. You might see a 10 year annuity where someone else can be beneficiary, but not this.

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It is fairly common in the public sector in my experience. People are freaking out about her son getting the money for his lifetime, but the odds are it wasn't any more expensive to the state than Pat's single life option when it was initiated.

$14,500/month is a ton of money, but it is still $80k less per year than what Pat's single life option would have paid out. That kind of thing adds up quickly in a NPV calculation. Threads like this bring out the people who suck at math.