88-283. Election of retirement allowance option
(a) Upon retirement, any member may elect to receive the maximum retirement allowance to which the member is entitled, computed in accordance with section 88-282, 88-284, or 88-285, and, if the member elects to receive the maximum retirement allowance, the member's beneficiary shall not be entitled to any benefit upon the member's death, except as provided in subsection (g). In lieu of the maximum retirement allowance, a member may elect to receive the member's retirement allowance under one of the options described below, which shall be actuarially equivalent to the maximum retirement allowance:
(1) Option A: A reduced allowance payable to the
member, then upon the member's death, one-half of the allowance, including
fifty per cent of all cumulative post retirement allowances, to the member's
beneficiary designated by the member at the time of retirement, for the life of
the beneficiary. If the beneficiary dies prior to the retirant, all further
payments shall cease upon the death of the retirant; provided that for members
retiring after November 30, 2004, if the retirant's designated beneficiary dies
at any time after the retirant retired, but before the death of the retirant,
the retirant, upon the death of the retirant's designated beneficiary, shall
receive a retirement allowance, including cumulative post retirement
allowances, calculated as if the retirant had selected the maximum retirement
allowance to which the retirant is entitled;
(2) Option B: A reduced allowance payable to the
member, then upon the member's death, the same allowance, including cumulative
post retirement allowances, paid to the member's beneficiary designated by the
member at the time of retirement, for the life of the beneficiary. If the
beneficiary dies prior to the retirant, all further payments shall cease upon
the death of the retirant; provided that for members retiring after November
30, 2004, if the retirant's designated beneficiary dies at any time after the
retirant retired, but before the death of the retirant, the retirant, upon the
death of the retirant's designated beneficiary, shall receive a retirement
allowance, including cumulative post retirement allowances, calculated as if
the retirant had selected the maximum retirement allowance to which the
retirant is entitled; or
(3) Option C: A reduced allowance payable to the
member, and upon the death of the retirant within ten years of retirement, the
same allowance, including cumulative post retirement allowances, paid to the
retirant's designated beneficiary, or otherwise to the retirant's estate for
the balance of the ten-year period. If the retirant returns to service
requiring active membership in the system and the retirant is reenrolled as an
active member, running of the ten-year period will be suspended until the member
again retires.
Only one beneficiary shall be designated under
options A, B, and C. The beneficiary designated under option A or B shall be a
natural person, and benefits under option A or B shall only be paid to a
natural person. To receive benefits, the beneficiary shall have been
designated by the member in the form and manner prescribed by the board.
(b) Upon a member's retirement:
(1) The member's election of a retirement allowance
option shall be irrevocable; and
(2) The member's designation of a beneficiary shall
be irrevocable if the retirement allowance option elected by the member is
option A or B.
(c) No election by a member under this section
shall take effect unless:
(1) The spouse or reciprocal beneficiary of the
member is furnished written notification that:
(A) Specifies the retirement date, the
benefit option selected, and the beneficiary designated by the member;
(B) Provides information indicating the
effect of the election; and
(C) Is determined adequate by rules adopted
by the board in accordance with chapter 91;
(2) The member selects option A or option B and
designates the spouse or reciprocal beneficiary as the beneficiary; or
(3) It is established to the satisfaction of the
board that the notice required under paragraph (1) cannot be provided because:
(A) There is no spouse or reciprocal
beneficiary;
(B) The spouse or reciprocal beneficiary
cannot be located;
(C) The member has failed to notify the
system that the member has a spouse or reciprocal beneficiary, or has failed to
provide the system with the name and address of the member's spouse or
reciprocal beneficiary; or
(D) Of other reasons, as established by board
rules adopted in accordance with chapter 91.
Any notice provided to a spouse or reciprocal
beneficiary, or determination that the notification of a spouse or reciprocal
beneficiary cannot be provided, shall be effective only with respect to that
spouse or reciprocal beneficiary. The system shall rely upon the
representations made by a member as to whether the member has a spouse or
reciprocal beneficiary and the name and address of the member's spouse or
reciprocal beneficiary.
(d) Each member, within a reasonable period of
time before the member's retirement date, shall be provided a written
explanation of:
(1) The terms and conditions of the various benefit
options;
(2) The rights of the member's spouse or reciprocal
beneficiary under subsection (c) to be notified of the member's election of a
benefit option; and
(3) The member's right to make, and the effect of, a
revocation of an election of a benefit option.
(e) The system shall not be liable for any
false statements made to the system by the member or by the member's employer.
(f) If a member dies after the date of the
filing of the member's written application to retire, but prior to the
retirement date designated by the member, and, if the member was eligible to
retire on the date of the member's death, the member's designated beneficiary
may elect to receive either:
(1) An allowance that would have been payable if the
member had retired and had elected to receive a retirement allowance under
option B; or
(2) The allowance under the option selected by the
member which would have been payable had the member retired.
The effective date of the member's retirement shall
be the first day of a month, except for the month of December when the
effective date of retirement may be on the first or last day of the month, and
shall be no earlier than the later of thirty days from the date the member's
retirement application was filed or the day following the member's date of
death. The election may not be made if, at the time of the member's death,
there are individuals who are eligible to receive death benefits under section
88-286(c) who have made a claim for the benefits; provided that, if the
designated beneficiary is an individual eligible to receive benefits under
section 88-286(c), the designated beneficiary may receive benefits pursuant to
an election made under this section pending disposition of the claim for
benefits under section 88-286(c). If death benefits are payable under section
88-286(c), the death benefits shall be in lieu of any benefits payable pursuant
to this section.
(g) If the retirant dies within one year after
the date of retirement, the retirant's designated beneficiary may elect to
receive either:
(1) The death benefit under the retirement allowance
option selected by the retirant; or
(2) The death benefit under option B, less the
difference between the benefit that the retirant received and the benefit that
would have been payable to the retirant had the retirant elected to receive a
retirement allowance under option B; provided that if the retirant would not
have been permitted by applicable law or the rules of the board to name the
designated beneficiary as beneficiary under option B, the designated
beneficiary may elect to receive the death benefit under option A, less the
difference between the benefit that the retirant received and the benefit that
would have been payable to the retirant had the retirant elected to receive a
retirement allowance under option A.
(h) The increase in the retirant's benefit
under options A and B upon the death of the retirant's designated beneficiary
shall be effective the first day of the month following the date of death of
the designated beneficiary. The retirant shall notify the system in writing
and provide a certified copy of the beneficiary's death certificate. The
system shall make retroactive benefit payments to the retirant, not to exceed
six months from the date the written notification and the certified copy of the
death certificate are received by the system. The retroactive payments shall
be without interest.
(i) A claim under this section by a retirant's
or member's beneficiary for benefits upon the death of a retirant or member
shall be filed no later than three years from the date of the retirant's or
member's death.
[L 1984, c 108, pt of §8; am L 1987, c 117, §6; am L 1988, c 8,
§2; am L 1993, c 67, §2; am L 2001, c 101, §3; am L 2003, c 182, §2; am L 2004,
c 179, §27; am L 2006, c 169, §29; am L 2007, c 215, §20]
