1. (a)

   1. (1) A participant in the Teacher Deferred Retirement Option Plan may designate one (1) or more alternative residue beneficiaries to receive a lump-sum payment of his or her T-DROP benefits in lieu of his or her surviving spouse.
   2. (2) A T-DROP plan benefit, surviving spouse annuity benefit, or any other type of monthly benefit shall not be paid to a plan participant’s surviving spouse if the plan participant designates one (1) or more alternative residue beneficiaries to receive a lump-sum payment of his or her T-DROP benefits in lieu of his or her surviving spouse.

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

      1. (A) The plan participant:

2. (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 plan participant 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 right to the residue is not required if the plan participant does not have a residue with a payable balance.

3. (b) A plan participant’s T-DROP residue that otherwise would have been paid pursuant to Arkansas Code § 24-7-709 shall be calculated as the greater of either of the following:

   1. (1) The accumulated contributions and regular interest credited to the retirement reserve account as of the member’s effective retirement date reduced by the total amount of regular annuities paid, further reduced by amounts received from the T-DROP account in the form of a lump-sum or annuity benefit payments; or
   2. (2) The T-DROP account as of the member’s effective retirement date reduced by amounts received from the T-DROP account in the form of a lump-sum or annuity benefit payments.

Codification Notes: “T-DROP” means Teacher Deferred Retirement Option Plan.