(a)

1. (1) If the marital status of a retiree changes due to the death of the retiree’s spouse or a marriage dissolution, the retiree may choose to:

   1. (A) Cancel his or her designation of the former spouse as a beneficiary; or
   2. (B) Designate a dependent child as a replacement beneficiary if the:

(i) Retiree previously designated the former spouse as his or her Option A or Option B beneficiary; and

1. (ii) Former spouse predeceases the retiree.

2. (2) If the retiree chooses to cancel the designation of his or her former spouse as his or her Option A or Option B beneficiary or chooses to designate a dependent child as a replacement Option A or Option B beneficiary:

   1. (A) The retiree shall file with the Arkansas Teacher Retirement System a change of option beneficiary on a form approved by the system; and
   2. (B) Any change in the benefit amount shall become effective the month after the system receives the approved form.

(b)

1. (1) If a member designates one (1) or more alternative residual beneficiaries in lieu of his or her spouse, the member shall submit the names of each alternative residue beneficiary to the system on a form approved by the system.

2. (2) If a member designates one (1) or more alternative residue beneficiaries in lieu of his or her spouse, each alternative residue beneficiary shall receive an appropriate lump-sum payment of the greater of either:

   1. (A) The member’s residue from the Teacher Deferred Retirement Option Plan (T-DROP); or
   2. (B) The member’s contributions.