34 Tex. Admin. Code § 29.61 - Distribution
(a) When a member who has participated in the
Deferred Retirement Option Plan (DROP) retires, the system shall distribute the
accumulated amount in the member's DROP account in one of the following
manners:
(1) in a lump sum;
(2) in yearly or monthly increments over a
five-year period;
(3) in yearly or
monthly increments over a ten-year period; or
(4) a roll-over as authorized by
law.
(b) Interest shall
be credited to the DROP account until final distribution is made. The initial
DROP distribution shall be due and payable at the same time as the first
annuity payment. Thereafter, monthly payments shall be payable on the first of
each succeeding month until the payment period has expired. Yearly
distributions, after the initial yearly distribution, shall be due on the
anniversary of the date the initial distribution was due and payable.
(c) A member must elect the form of
distribution at the time of retirement. No distribution shall be made until all
necessary documents for payment of retirement or death benefits are received by
TRS.
(d) Payment of DROP
installments selected by a retiree under subsection (a) of this section will
continue to the beneficiary upon the death of the annuitant for the remainder
of the payment period. A retiree or beneficiary of a retiree receiving a DROP
distribution may make a one-time election to accelerate installment payments to
a lump sum amount representing the remaining DROP account balance at the time
of final distribution.
(e) In the
event of the death of a member participating in the DROP, the accumulated
amount in the DROP account including credited interest shall be paid to the
DROP beneficiary or in the absence of a DROP beneficiary as indicated in
subsection (f) of this section. Payment may be eligible for rollover to the
extent provided by law.
(f) A
member participating in the DROP or a DROP annuitant shall separately designate
one or more beneficiaries to receive any DROP benefits due in the event of
death. DROP beneficiaries need not be the same persons named to receive other
payments from the retirement system upon the death of the member or annuitant.
At the death of a member participating in DROP and in the absence of a
designated DROP beneficiary the payment of any DROP distribution will be made
to the beneficiary eligible to receive any death benefits. At the death of a
DROP annuitant and in the absence of a designated DROP beneficiary the payment
of any DROP distribution will be made to the beneficiary designated to receive
any retirement benefits. If there is no designated beneficiary for retirement
benefits, payment of any DROP distribution will be made to the beneficiary
eligible to receive any survivor benefits.
Notes
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