(b)

1. (1) A qualifying member may designate one (1) or more alternative beneficiaries, also known as alternative residue beneficiaries, to receive a lump-sum payment of the qualifying member’s residue in lieu of the qualifying member’s surviving spouse by using a beneficiary form provided and approved by the system.
2. (2) A surviving spouse annuity benefit or any other type of monthly benefit shall not be paid to a qualifying member’s surviving spouse if the qualifying member designates one (1) or more alternative residue beneficiaries to receive a lump-sum payment of the qualifying member’s residue in lieu of the qualifying member’s surviving spouse.

3. (3) A surviving spouse may elect Option A – 100% Survivor Annuity benefits if:

   1. (A) The qualifying member:

(i) Designates only the surviving spouse as the primary residue beneficiary; and

1. (ii) Does not designate an alternative residue beneficiary as the primary residue beneficiary; or

   1. (B)

      1. (i) The surviving spouse is ineligible for an annuity solely as a result of the qualifying member designating an alternative residue beneficiary and the alternative residue beneficiary waives his or her right to the residue.
      2. (ii) An alternative residue beneficiary’s waiver of his or her right to the residue is not required if the qualifying member does not have a residue with a payable balance.
      3. (c)

2. (1) A member’s designation of his or her former spouse as the member’s alternative residue beneficiary shall not be honored by the system with regard to the former spouse if the:

   1. (A) Member remarries;
   2. (B) Member’s current spouse would be eligible to receive survivor annuity residue beneficiary; and
   3. (C) System receives proof of the member’s remarriage in the manner required by the system before payment of the residue is issued to the former spouse.

3. (2) A member who remarries and desires to maintain his or her former spouse’s designation as the member’s alternative residue beneficiary shall file with the system a residue beneficiary designation form that:

   1. (A) Designates his or her former spouse as the member’s alternative residue beneficiary; and
   2. (B) Has a signature date of the member that is on or after the date of the member’s remarriage.
4. (3) The system shall not be obligated to recoup or reimburse a member’s current spouse for any residue amount paid to the member’s former spouse in accordance with a law, rule, or policy applicable to the system.