(A) No later than the date the first payment of a retirement allowance is due, a member shall elect a form of monthly payment from the following options:
Option A. The maximum retirement allowance payable under law for the life of the member. Upon the member's death, the member's designated beneficiary is entitled to receive any remaining member contributions.
Option B. A reduced retirement allowance payable during the retired member's life, which continues after the member's death for the life of the member's designated beneficiary or, if the member selects multiple beneficiaries, which continues after the member's death in equal shares to and for the life of each of two or more beneficiaries. The reduced retirement allowance payable under this option must be the actuarial equivalent of the maximum retirement allowance payable to the member under law, and if the member selects multiple beneficiaries, the benefit reduction factor must be based on the average age of the designated beneficiaries. If all of the designated beneficiaries predecease the member, then the member shall receive a retirement allowance equal to the maximum retirement allowance payable under law to the member. Any retirement allowance payable under this option, except an allowance for disability retirement pursuant to Section 9-11-80, shall be subject to the incidental death benefit limitation upon the payment of survivorship benefits to a nonspouse beneficiary under Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.
Option C. A reduced retirement allowance payable during the retired member's life, which continues after the member's death at one-half the rate paid to the member for the life of the member's designated beneficiary or, if the member selects multiple beneficiaries, which continues after the member's death at one-half the rate paid to the member in equal shares to and for the life of each of two or more beneficiaries. The reduced retirement allowance payable under this option must be the actuarial equivalent of the maximum retirement allowance payable to the member under law, and if the member selects multiple beneficiaries, the benefit reduction factor must be based on the average age of the designated beneficiaries. If all of the designated beneficiaries predecease the member, then the member shall receive a retirement allowance equal to the maximum retirement allowance payable under law to the member.
(B)(1) A retired member, within five years after a change in marital status, may revoke the form of monthly payment elected and elect a new form of monthly payment, which must be the actuarial equivalent of the maximum retirement allowance payable to the member under law. The new form of monthly payment is effective on the first day of the month in which the election of the new form of monthly payment is received by the system and must be calculated based upon the ages of the retired member and the member's beneficiary or beneficiaries as of that effective date.
(2) Notwithstanding any other provision of law, a retired member's form of monthly payment may not be changed more than twice. A reversion to the maximum retirement allowance payable under law upon the death of the beneficiary or beneficiaries as provided in Options B and C of subsection (A) constitutes a change in the form of monthly payment for the purposes of this item.
(C) Members retiring before January 1, 2001, shall continue to receive a retirement allowance in accordance with the form of payment selected under the law in effect at the time of their retirement. the provisions of subsection (B) apply to these members, but changes in forms of payment occurring before January 1, 2001, are not included in the limitation provided in subsection (B)(2).
(D) A member who retired under the provisions of the previously existing Social Security Advance Option before July 1, 1990, may elect to have his benefit adjusted so that cost-of-living and other special increases in benefits are not applied to the amount of advance or reduction in allowance under this option after July 1, 1992, or the member's attainment of age sixty- two, if later, by making a special lump sum payment before that date. This lump sum payment must be equal to the excess, if any, of cost-of-living and other special increases in benefits actually paid to the member, over the increases that would have been paid had the member not elected an optional form of allowance. If a member does not elect to make the payment, his benefit must be automatically adjusted when no such excess exists, but not before July 1, 1992.
(E) Except as provided in this section, a retired member may not change the form of his monthly payment after the first payment of a retirement allowance is due.
HISTORY: 1962 Code Section 61-342; 1962 (52) 1933; 1974 (58) 2032; 1977 Act No. 29 Section 2; 1982 Act No. 369, Section 3; 1984 Act No. 381, Section 3; 1985 Act No. 201, Part II, Section 65B; 1986 Act No. 540, Part II, Section 23C, effective June 18, 1986, and became law without the Governor's signature; 1990 Act No. 412, Section 3, eff January 1, 1991, except Option 3 which became eff July 1, 1990; 1992 Act No. 336, Sections 5, 7, eff May 4, 1992; 1996 Act No. 458, Part II, Section 47C, eff June 19, 1996; 2000 Act No. 387, Part II, Section 67T, eff January 1, 2001; 2008 Act No. 311, Sections 19 and 40, eff June 4, 2008; 2015 Act No. 27 (S.373), Section 2, eff June 1, 2015.
Editor's Note
2015 Act No. 27, Section 3, provides as follows:
"SECTION 3. This act takes effect upon approval by the Governor and applies to any new form of monthly payment elected thereafter due to a change in marital status."