16 CSR 50-2.035 - Payment of Benefits
PURPOSE: This amendment revises the benefit application and election procedures for members of the County Employees' Retirement Fund.
(1) Method
of Payment. Prior to his or her annuity starting date, each Participantst shall
be offered the following optional methods of payment, in addition to the normal
form of benefit. Any benefits payable under such optional methods of payment
shall be the actuarial equivalent of the normal form of benefit-
(A) Joint and One Hundred Percent (100%)
Survivor Annuity. An annuity whereby a monthly installment shall be paid to the
Participantst during his or her lifetime and thereafter in the same monthly
amount to his or her survivor annuitant during his or her lifetime, on the
first day of each calendar month in which the Participantst or his or her
survivor annuitant shall have lived the entire preceding calendar
month;
(B) Joint and Seventy-Five
Percent (75%) Survivor Annuity. An annuity whereby a monthly installment shall
be paid to the Participantst during his or her lifetime and thereafter in
three-quarters (3/4) of such monthly amount to his or her survivor annuitant
during his or her lifetime, on the first day of each calendar month in which
the Participantst or his or her survivor annuitant shall have lived the entire
preceding calendar month;
(C) Joint
and Fifty Percent (50%) Survivor Annuity. An annuity, whereby a monthly
installment shall be paid to the Participantst during his or her lifetime and
thereafter in one-half (1/2) of such monthly amount to his or her survivor
annuitant during his or her lifetime, on the first day of each calendar month
in which the Participantst or his or her survivor annuitant shall have lived
the entire preceding calendar month;
(D) Ten (10)-Year Certain and Life Annuity.
An annuity whereby a monthly installment shall be paid to the Participantst
during his or her lifetime. If the Participantst dies after receiving one
hundred twenty (120) monthly payments, the annuity shall end with the calendar
month immediately following the Participantst's death. If the Participantst
dies before one hundred twenty (120) monthly payments have been made, then the
remaining payments under the form shall be made to the Participantst's
beneficiary (if surviving), or in a single sum to the Participantst's estate,
if the beneficiary predeceases the Participantst. Alternatively, in the event
the Participantst's beneficiary dies before one hundred twenty (120) monthly
payments have been made, the Participantst may complete a new beneficiary
designation form which shall apply to the remaining benefits which may become
payable under this subsection (1)(D). If the designated beneficiary survives
the Participantst, but dies before one hundred twenty (120) monthly payments
have been made, then the remaining payments under the form shall be made to the
beneficiary's estate in a single sum. In the case where the beneficiary and the
Participantst die simultaneously before one hundred twenty (120) monthly
payments have been made, then the remaining payments under the form shall be
made in a single sum to the Participantst's estate;
(E) Level Income Option-Life Only. An annuity
that is adjusted so that the monthly annuity payable for the months ending
immediately before the first day of the month after the date the Participantst
attains age sixty-two (62) is approximately equal to the sum of i) the monthly
adjusted annuity payable for the month subsequent to the month in which the
Participantst reaches age sixty-two (62) and ii) the monthly Social Security
benefit payable to the Participantst at age sixty-two (62); or
(F) Level Income Option-Joint and Survivor.
1. An annuity, whereby a monthly installment
shall be paid to the Participantst during his or her lifetime and thereafter in
the percentage (either fifty (50), seventy-five (75), or one hundred (100)) of
such monthly amount, as elected by the Participantst, to his or her survivor
annuitant during his or her lifetime, on the first day of each calendar month
in which the Participantst or his or her survivor annuitant shall have lived
the entire preceding calendar month. The annuity shall be adjusted so that the
monthly annuity payable for the months ending immediately before the first day
of the month after the date the Participantst attains age sixty-two (62) is
approximately equal to the sum of i) the monthly adjusted annuity payable for
the month subsequent to the month in which the Participantst reaches age
sixty-two (62) and ii) the monthly Social Security benefit payable to the
Participantst at age sixty-two (62). If the Participantst dies before he or she
reaches age sixty-two (62), the survivor annuitant's benefit shall be adjusted
on the first day of the month after the date on which the Participantst would
have reached age sixty-two (62) in the manner that the Participantst's annuity
would have been adjusted on such date.
2. Notwithstanding anything in the preceding
paragraph to the contrary, if the monthly benefit payable to the Participantst
under this form beginning with the month after the Participantst's sixty-second
birthday is zero (0), then the provisions of this paragraph shall apply and the
monthly adjusted annuity with respect to months ending immediately before the
first day of the month after the date the Participantst attains age sixty-two
(62) shall be a period-certain annuity, commencing on the Participantst's
annuity starting date, and ending on the date immediately before the first day
of the month after the Participantst attains (or would have attained) age
sixty-two (62). If the Participantst dies before attaining age sixty-two (62),
then the remaining payments under the form shall be made to the Participantst's
survivor annuitant (if surviving), or in a single sum to the Participantst's
estate, if the survivor annuitant predeceases the Participantst. Alternatively,
in the event the Participantst's survivor annuitant dies before the
Participantst (and the monthly benefit payable under this form beginning with
the month after the Participantst's sixty-second birthday is zero (0)), the
Participantst may complete a new beneficiary designation form which shall apply
to the remaining benefit which may become payable under this paragraph. If the
survivor annuitant survives the Participantst, but dies before the
Participantst's sixty-second birthday, then the remaining payments under the
form shall be made to the survivor annuitant's estate in a single sum. In the
case where the survivor annuitant and the Participantst die simultaneously
before the Participantst's sixty-second birthday, then the remaining payments
under the form shall be made in a single sum to the Participantst's
estate.
(2)
Election of Payment Method. A payment option shall be elected, changed, or
revoked by the Participantst, his or her guardian, or attorney-in-fact, by
written notice filed with the board during the election period specified in
section (3) below; provided, however-
(A) A
survivor annuitant under an option may not be changed after an election has
been received by the board (or by its designee), provided that a Participantst
may complete a new beneficiary designation form changing an annuitant or
beneficiary with respect to a period-certain form to the extent provided in
subsection (1)(D) and paragraph (1)(F)2., in accordance with the form and
manner specified by the board or its designee for such purpose;
(B) A Participantst shall be deemed to have
elected the normal form of benefit unless he or she makes an affirmative
election not to take such an annuity in accordance with this section. Such
annuity shall commence as soon as administratively feasible following the
Participantst's required beginning date.
(3) Election Process and Period. Generally, a
participant must complete a two- (2-) step election process before he or she
will receive benefits. A participant must complete an initial application for
benefits at least thirty (30), but not more than ninety (90), days prior to the
date he or she wishes benefits to commence. After the board receives the
initial application, the board or its designee will provide the participant
with a final benefit calculation. The participant must elect a payment option
in accordance with section (2) above within ninety (90) days after such final
benefit calculation is sent to the participant. The annuity starting date for
such a participant shall be the first of the month coincident with or following
the date specified by the participant, or, if earlier, the participant's
required beginning date. If the participant does not submit an application at
least thirty (30) days prior to his or her separation from service, or a
payment option election form no later than ninety (90) days after the final
benefit calculation is sent to the participant, the payments will not be
retroactive to the date of separation from service. Once a participant has
submitted the initial application, if supporting documentation has been
requested but has not been obtained by the annuity starting date selected by
the participant and the application has not been completely processed, the
participant will not receive the first benefit payment until the additional
documentation has been received and both the application and the payment option
election form have been completely processed. The payments will, however, be
retroactive to the annuity starting date designated by the participant in his
or her application, provided that the payment option election form is received
within ninety (90) days after the final benefit calculation is sent to the
participant. If a participant fails to complete the two- (2-) step election
process within ninety (90) days after the final benefit calculation is sent to
the participant, the participant's application shall be canceled and deemed
void and the first benefit payment will not be paid on or retroactive to the
annuity starting date designated by the participant in such application. Such a
participant will be required to submit a new initial application for benefits
at least thirty (30), but not more than ninety (90), days prior to the date he
or she wishes benefits to commence and a payment option election form in the
time and manner described in this section, as though such participant had never
submitted an initial application previously. If a participant has not submitted
an application upon his or her separation from service, his or her benefits
will start on the first of the month following the submission and complete
processing of an initial application and payment option election form as
described in this section, but in no event later than the participant's
required beginning date.
(4)
Payments after Death of Survivor Annuitant. In the event a Participantst has
chosen an optional form of payment which provides for a continuing payment to a
survivor annuitant after the death of the Participantst in which the
Participantst received a reduced annuity during his or her lifetime and the
Participantst's survivor annuitant precedes the Participantst in death, the
Participantst's benefit shall revert, effective the next month following the
death of the Participantst's survivor annuitant, to an amount equal to his or
her normal annuity at the time of the annuity starting date plus any
cost-of-living or other increases that the Participantst may have received
prior to the survivor annuitant's death. Notwithstanding the preceding
sentence, if the Participantst elected the Level Income Option-Joint and
Survivor, pursuant to which the monthly benefit payable to the Participantst
under this form beginning with the month after the Participantst's sixty-second
birthday is greater than zero (0), and the Participantst's survivor annuitant
precedes the Participantst in death, the Participantst's benefit shall revert
to the benefit he or she would have received had he or she elected the Level
Income Option-Life Only. It shall be the Participantst's duty to inform the
board or its designee of the death of such a survivor annuitant.
(5) 401(a)(9) Requirements. Notwithstanding
anything to the contrary contained in the plan, the entire interest of a
Participantst will be distributed in accordance with a reasonable and good
faith interpretation of U.S. Code section 401(a)(9) and the regulations
thereunder beginning no later than the Participantst's required beginning date.
The provisions of this section will apply for purposes of determining required
minimum distributions in accordance with a reasonable and good faith
interpretation.
(A) If the Participantst dies
before distributions begin, the Participantst's entire interest will be
distributed, or begin to be distributed, no later than as follows:
1. If the Participantst's surviving spouse is
the Participantst's sole designated beneficiary, distributions to the surviving
spouse will begin by December 31 of the calendar year immediately following the
calendar year in which the Participantst died, or by December 31 of the
calendar year in which the Participantst would have attained age seventy and
one-half (70 1/2), if later;
2. If
the Participantst's surviving spouse is not the Participantst's sole designated
beneficiary, distributions to the designated beneficiary will begin by December
31 of the calendar year immediately following the calendar year in which the
Participantst died;
3. If there is
no designated beneficiary as of September 30 of the year following the year of
the Participantst's death, the Participantst's entire interest will be
distributed by December 31 of the calendar year containing the fifth
anniversary of the Participantst's death;
4. If the Participantst's surviving spouse is
the Participantst's sole designated beneficiary and the surviving spouse dies
after the Participantst but before distributions to the surviving spouse begin,
this subsection (5)(A), other than paragraph (5)(A)1., will apply as if the
surviving spouse were the Participantst. For purposes of this subsection and
subsection (E), unless paragraph (5)(A)4. applies, distributions are considered
to begin on the Participantst's required beginning date. If paragraph (5)(A)4.
applies, distributions are considered to begin on the date distributions are
required to begin to the surviving spouse under paragraph (5)(A)1. If annuity
payments irrevocably commence to the Participantst before the Participantst's
required beginning date (or to the Participantst's surviving spouse before the
date distributions are required to begin to the surviving spouse under
paragraph (5)(A)1.), the date distributions are considered to begin is the date
distributions actually commence.
(B) Unless the Participantst's interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the required beginning date, as of the first
distribution calendar year distributions will be made in accordance with
subsections (5)(C), (D), and (E). If the Participantst's interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of
Code section 401(a)(9) and the Treasury regulations. Any part of the
Participantst's interest which is in the form of an individual account
described in Code section 414(k) will be distributed in a manner satisfying the
requirements of Code section 401(a)(9) and the Treasury regulations that apply
to individual accounts.
(C) If the
Participantst's interest is paid in the form of annuity distributions under the
plan, payments under the annuity will satisfy the following requirements:
1. The annuity distributions will be paid in
periodic payments made at intervals not longer than one (1) year;
2. The distribution period will be over a
life (or lives) or over a period certain not longer than the period described
in subsections (5)(D) and (E);
3.
Once payments have begun over a period certain, the period certain will not be
changed even if the period certain is shorter than the maximum
permitted;
4. Payments will either
be nonincreasing or increase only i) by an annual percentage increase that does
not exceed the annual percentage increase in a cost-of-living index that is
based on prices of all items and issued by the Bureau of Labor Statistics; ii)
to the extent of the reduction in the amount of the Participantst's payments to
provide for a survivor benefit upon death, but only if the beneficiary whose
life was being used to determine the distribution period described in
subsection (5)(D) dies or is no longer the Participantst's beneficiary pursuant
to a qualified domestic relations order within the meaning of section 414(p);
iii) to provide cash refunds of employee contributions upon the Participantst's
death; or iv) to pay increased benefits that result from a plan amendment;
and
5. The amount that must be
distributed on or before the Participantst's required beginning date (or, if
the Participantst dies before distributions begin, the date distributions are
required to begin under subsection (5)(A)) is the payment that is required for
one (1) payment interval. The second payment need not be made until the end of
the next payment interval even if that payment interval ends in the next
calendar year. Payment intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually, or annually. All of the
Participantst's benefit accruals as of the last day of the first distribution
calendar year will be included in the calculation of the amount of the annuity
payments for payment intervals ending on or after the Participantst's required
beginning date. Any additional benefits accruing to the Participantst in a
calendar year after the first distribution calendar year will be distributed
beginning with the first payment interval ending in the calendar year
immediately following the calendar year in which such amount accrues.
(D) If the Participantst's
interest is being distributed in the form of a joint and survivor annuity for
the joint lives of the Participantst and a nonspouse beneficiary, annuity
payments to be made on or after the Participantst's required beginning date to
the designated beneficiary after the Participantst's death must not at any time
exceed the applicable percentage of the annuity payment for such period that
would have been payable to the Participantst using the table set forth in
Q&A-2 of section 1.401(a)(9)-6 of the Treasury regulations. If the form of
distribution combines a joint and survivor annuity for the joint lives of the
Participantst and a nonspouse beneficiary and a period certain annuity, the
requirement in the preceding sentence will apply to annuity payments to be made
to the designated beneficiary after the expiration of the period certain.
Unless the Participantst's spouse is the sole designated beneficiary and the
form of distribution is a period certain and no live annuity, the period
certain for an annuity distribution commencing during the Participantst's
lifetime may not exceed the applicable distribution period for the
Participantst under the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains
the annuity starting date. If the annuity starting date precedes the year in
which the Participantst reaches age seventy (70), the applicable distribution
period for the Participantst is the distribution period for age seventy (70)
under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the
Treasury regulations plus the excess of seventy (70) over the age of the
Participantst as of the Participantst's birthday in the year that contains the
annuity starting date. If the Participantst's spouse is the Participantst's
sole designated beneficiary and the form of distribution is a period certain
and no life annuity, the period certain may not exceed the longer of the
Participantst's applicable distribution period, as determined under this
section, or the joint life and last survivor expectancy of the Participantst
and the Participantst's spouse as determined under the Joint and Last Survivor
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the
Participantst's and spouse's attained ages as of the Participantst's and
spouse's birthdays in the calendar year that contains the annuity starting
date.
(E) If the Participantst dies
before the date distribution of his or her interest begins and there is a
designated beneficiary, the Participantst's entire interest will be
distributed, beginning no later than the time described in subsection (5)(A)
over the life of the designated beneficiary or over a period certain not
exceeding:
1. Unless the annuity starting date
is before the first distribution calendar year, the life expectancy of the
designated beneficiary determined using the beneficiary's age as of the
beneficiary's birthday in the calendar year immediately following the calendar
year of the Participantst's death; or
2. If the annuity starting date is before the
first distribution calendar year, the life expectancy of the designated
beneficiary determined using the beneficiary's age as of the beneficiary's
birthday in the calendar year that contains the annuity starting date. If the
Participantst dies before the date distributions begin and there is no
designated beneficiary as of September 30 of the year following the year of the
Participantst's death, distribution of the Participantst's entire interest will
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participantst's death. If the Participantst dies before the
date distribution of his or her interest begins, the Participantst's surviving
spouse is the Participantst's sole designated beneficiary, and the surviving
spouse dies before distributions to the surviving spouse begin, this subsection
will apply as if the surviving spouse were the Participantst, except that the
time by which distributions must begin will be determined without regard to
subsection (5)(A).
(F)
The following definitions shall apply for purposes of this section:
1. Designated beneficiary shall mean the
individual who is designated as the beneficiary under the terms of the plan and
is the designated beneficiary under Code section 401(a)(9) and section
1.401(a)(9)-1, Q&A-4 of the Treasury regulations.
2. A distribution calendar year is a calendar
year for which a minimum distribution is required. For distributions beginning
before the Participantst's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains the
Participantst's required beginning date. For distributions beginning after the
Participantst's death, the first distribution calendar year is the calendar
year in which distributions are required to begin pursuant to subsection
(5)(A).
3. Life expectancy means an
individual's life expectancy as computed by use of the Single Life Table in
section 1.401(a)(9)-9 of the Treasury regulations.
(6) Non-Assignability of
Benefits/Child Su-port. A Participantst's right to an annuity or other benefits
under the plan shall not be subject to execution, garnishment, attachment, writ
of sequestration, the operation of bankruptcy or insolvency laws, a qualified
domestic relations order (as defined in 26 U.S.C. section 414(p) or 29 U.S.C.
section 1056(d) ), or to any other claim or process of law whatsoever, and
shall be unassignable, except that any payment from the plan shall be subject
to the collection of child support.
(7) Return of Mistaken Payments.
Notwithstanding anything to the contrary, a Participantst or beneficiary is
entitled to only those benefits provided by the plan and promptly shall return
any payment, or portion thereof, made by mistake of fact or law. The board may
offset the future benefits of any recipient who refuses to return an erroneous
payment, in addition to pursuing any other remedies provided by law. Without
limiting the generality of the foregoing, in the event any payment is made to
or on behalf of a deceased member after such member's death by mistake of fact
or law, the recipient of or other person benefiting from such payment shall
promptly return any such payment to the plan, and the board may offset the
future benefits of any Participantst or beneficiary otherwise entitled to a
benefit under the plan who received or benefited from any such mistaken payment
made to or on behalf of a deceased member by such amount as the board deems
appropriate, including by the amount of the mistaken payment and interest on
such amount.
(8) Correction of
Underpayments. Should any error result in any Participantst or beneficiary
receiving less than he or she should have been entitled, then such error shall
be corrected by paying the Participantst or beneficiary a lump-sum amount equal
to the underpayment, without interest.
(9) In the case of special consultants, as
provided for in section 50.1090.2, RSMo, who do not return buyback invoices or
requested supporting documentation, the benefit will begin on the first of the
month following payment of the initial fifty percent (50%) buy-back
amount.
Notes
*Original authority: 50.1032, RSMo 1995.
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