PURPOSE: This rule clarifies options of benefit payments available to members of the County Employees’ Retirement Fund, the procedure for selecting such options, and the timing of benefit payments.

1. (1) Method of Payment. Prior to his or her annuity starting date, each participant shall be offered the following optional methods of payment, in addition to the normal form of benefit. Any benefits payable under such optional methods of payment shall be the actuarial equivalent of the normal form of benefit—

   1. (A) Joint and One Hundred Percent (100%) Survivor Annuity. An annuity whereby a monthly installment shall be paid to the participant during his or her lifetime and thereafter in the same monthly amount to his or her survivor annuitant during his or her lifetime, on the first day of each calendar month in which the participant or his or her survivor annuitant shall have lived the entire preceding calendar month;
   2. (B) Joint and Seventy-Five Percent (75%) Survivor Annuity. An annuity whereby a monthly installment shall be paid to the participant during his or her lifetime and thereafter in three-quarters (3/4) of such monthly amount to his or her survivor annuitant during his or her lifetime, on the first day of each calendar month in which the participant or his or her survivor annuitant shall have lived the entire preceding calendar month;
   3. (C) Joint and Fifty Percent (50%) Survivor Annuity. An annuity, whereby a monthly installment shall be paid to the participant during his or her lifetime and thereafter in one-half (1/2) of such monthly amount to his or her survivor annuitant during his or her lifetime, on the first day of each calendar month in which the participant or his or her survivor annuitant shall have lived the entire preceding calendar month;
   4. (D) Ten (10)-Year Certain and Life Annuity. An annuity whereby a monthly installment shall be paid to the participant during his or her lifetime. If the participant dies after receiving one hundred twenty (120) monthly payments, the annuity shall end with the calendar month immediately following the participant’s death. If the participant dies before one hundred twenty (120) monthly payments have been made, then the remaining payments under the form shall be made to the participant’s beneficiary (if surviving), or in a single sum to the participant’s estate, if the beneficiary predeceases the participant. Alternatively, in the event the participant’s beneficiary dies before one hundred twenty
2. (120) monthly payments have been made, the participant may complete a new beneficiary designation form which shall apply to the remaining benefits which may become payable under this subsection (1)(D). If the designated beneficiary survives the participant, but dies before one hundred twenty

3. (120) monthly payments have been made, then the remaining payments under the form shall be made to the beneficiary’s estate in a single sum. In the case where the beneficiary and the participant die simultaneously before one hundred twenty (120) monthly payments have been made, then the remaining payments under the form shall be made in a single sum to the participant’s estate;

   1. (E) Level Income Option—Life Only. An annuity that is adjusted so that the monthly annuity payable for the months ending immediately before the first day of the month after the date the participant attains age sixty-two

4. (62) is approximately equal to the sum of i) the monthly adjusted annuity payable for the month subsequent to the month in which the participant reaches age sixty-two (62) and ii) the monthly Social Security benefit payable to the participant at age sixty-two (62); or

   1. (F) Level Income Option—Joint and Survivor.

      1. 1. An annuity, whereby a monthly

installment shall be paid to the participant during his or her lifetime and thereafter in the percentage (either fifty (50), seventy-five (75), or one hundred (100)) of such monthly amount, as elected by the participant, to his or her survivor annuitant during his or her lifetime, on the first day of each calendar month in which the participant or his or her survivor annuitant shall have lived the entire preceding calendar month. The annuity shall be adjusted so that the monthly annuity payable for the months ending immediately before the first day of the month after the date the participant attains age sixty-two (62) is approximately equal to the sum of i) the monthly adjusted annuity payable for the month subsequent to the month in which the participant reaches age sixty-two (62) and ii) the monthly Social Security benefit payable to the participant at age sixty-two (62). If the participant dies before he or she reaches age sixty-two (62), the survivor annuitant’s benefit shall be adjusted on the first day of the month after the date on which the participant would have reached age sixty-two (62) in the manner that the participant’s annuity would have been adjusted on such date.

1. 2. Notwithstanding anything in the pre-

ceding paragraph to the contrary, if the monthly benefit payable to the participant under this form beginning with the month after the participant’s sixty-second birthday is zero (0), then the provisions of this paragraph shall apply and the monthly adjusted annuity with respect to months ending immediately before the first day of the month after the date the participant attains age sixty-two (62) shall be a period-certain annuity, commencing on the participant’s annuity starting date, and ending on the date immediately before the first day of the month after the participant attains (or would have attained) age sixty-two (62). If the participant dies before attaining age sixty-two (62), then the remaining payments under the form shall be made to the participant’s survivor annuitant (if surviving), or in a single sum to the participant’s estate, if the survivor annuitant predeceases the participant. Alternatively, in the event the participant’s survivor annuitant dies before the participant (and the monthly benefit payable under this form beginning with the month after the participant’s sixty-second birthday is zero (0)), the participant may complete a new beneficiary designation form which shall apply to the remaining benefit which may become payable under this paragraph. If the survivor annuitant survives the participant, but dies before the participant’s sixty-second birthday, then the remaining payments under the form shall be made to the survivor annuitant’s estate in a single sum. In the case where the survivor annuitant and the participant die simultaneously before the participant’s sixty-second birthday, then the remaining payments under the form shall be made in a single sum to the participant’s estate.

1. (2) Election of Payment Method. A payment option shall be elected, changed, or revoked by the participant, his or her guardian, or attorney-in-fact, by written notice filed with the board during the election period specified in section (3) below; provided, however—

   1. (A) A survivor annuitant under an option may not be changed after an election has been received by the board (or by its designee), provided that a participant may complete a new beneficiary designation form changing an annuitant or beneficiary with respect to a period-certain form to the extent provided in subsection (1)(D) and paragraph (1)(F)2., in accordance with the form and manner specified by the board or its designee for such purpose;
   2. (B) A participant shall be deemed to have elected the normal form of benefit unless he or she makes an affirmative election not to take such an annuity in accordance with this section. Such annuity shall commence as soon as administratively feasible following the participant’s required beginning date.
2. (3) Election Period. Generally, a participant must complete an application for benefits at least thirty (30), but not more than ninety (90), days prior to the date he or she wishes benefits to commence. The annuity starting date for such a participant shall be the first of the month coincident with or following the date specified by the participant, or, if earlier, the participant’s required beginning date. If the participant does not submit an application at least thirty (30) days prior to his or her separation from service, the payments will not be retroactive to the date of separation from service. Once a participant has submitted an application, if supporting documentation has been requested but has not been obtained by the annuity starting date selected by the participant and the application has not been completely processed, the participant will not receive the first benefit payment until the additional documentation has been received and the application has been completely processed. The payments will, however, be retroactive to the annuity starting date designated by the participant in his or her application. If a participant has not submitted an application upon his or her separation from service, his or her benefits will start on the first of the month following a thirty (30)- day period from the date of the application.
3. (4) Payments after Death of Survivor Annuitant. In the event a participant has chosen an optional form of payment which provides for a continuing payment to a survivor annuitant after the death of the participant in which the participant received a reduced annuity during his or her lifetime and the participant’s survivor annuitant precedes the participant in death, the participant’s benefit shall revert, effective the next month following the death of the participant’s survivor annuitant, to an amount equal to his or her normal annuity at the time of the annuity starting date plus any cost-of-living or other increases that the participant may have received prior to the survivor annuitant’s death. Notwithstanding the preceding sentence, if the participant elected the Level Income Option—Joint and Survivor, pursuant to which the monthly benefit payable to the participant under this form beginning with the month after the participant’s sixty-second birthday is greater than zero (0), and the participant’s survivor annuitant precedes the participant in death, the participant’s benefit shall revert to the benefit he or she would have received had he or she elected the Level Income Option—Life Only. It shall be the participant’s duty to inform the board or its designee of the death of such a survivor annuitant.

4. (5) 401(a)(9) Requirements. Notwithstanding anything to the contrary contained in the plan, the entire interest of a participant will be distributed in accordance with a reasonable and good faith interpretation of U.S. Code section 401(a)(9) and the regulations thereunder beginning no later than the participant’s required beginning date. The provisions of this section will apply for purposes of determining required minimum distributions in accordance with a reasonable and good faith interpretation.

   1. (A) If the participant dies before distributions begin, the participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

      1. 1. If the participant’s surviving spouse is

the participant’s sole designated beneficiary, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the participant died, or by December 31 of the calendar year in which the participant would have attained age seventy and one-half (70 1/2), if later;

1. 2. If the participant’s surviving spouse is

not the participant’s sole designated beneficiary, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the participant died;

1. 3. If there is no designated beneficiary

as of September 30 of the year following the year of the participant’s death, the participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant’s death;

1. 4. If the participant’s surviving spouse is

the participant’s sole designated beneficiary and the surviving spouse dies after the participant but before distributions to the surviving spouse begin, this subsection (5)(A), 16 CSR 50-2

other than paragraph (5)(A)1., will apply as if the surviving spouse were the participant. For purposes of this subsection and subsection (E), unless paragraph (5)(A)4. applies, distributions are considered to begin on the participant’s required beginning date. If paragraph (5)(A)4. applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under paragraph (5)(A)1. If annuity payments irrevocably commence to the participant before the participant’s required beginning date (or to the participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under paragraph (5)(A)1.), the date distributions are considered to begin is the date distributions actually commence.

1. (B) Unless the participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with subsections (5)(C), (D), and (E). If the participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code section 401(a)(9) and the Treasury regulations. Any part of the participant’s interest which is in the form of an individual account described in Code section 414(k) will be distributed in a manner satisfying the requirements of Code section 401(a)(9) and the Treasury regulations that apply to individual accounts.

2. (C) If the participant’s interest is paid in the form of annuity distributions under the plan, payments under the annuity will satisfy the following requirements:

   1. 1. The annuity distributions will be paid

in periodic payments made at intervals not longer than one (1) year;

1. 2. The distribution period will be over a

life (or lives) or over a period certain not longer than the period described in subsections (5)(D) and (E);

1. 3. Once payments have begun over a

period certain, the period certain will not be changed even if the period certain is shorter than the maximum permitted;

1. 4. Payments will either be nonincreasing

or increase only i) by an annual percentage increase that does not exceed the annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics; ii) to the extent of the reduction in the amount of the participant’s payments to provide for a survivor benefit upon death, but only if the beneficiary whose life was being used to determine the distribution period described in subsection (5)(D) dies or is no longer the participant’s beneficiary pursuant to a qualified domestic relations order within the meaning of section 414(p); iii) to provide cash refunds of employee contributions upon the participant’s death; or iv) to pay increased benefits that result from a plan amendment; and

1. 5. The amount that must be distributed

on or before the participant’s required beginning date (or, if the participant dies before distributions begin, the date distributions are required to begin under subsection (5)(A)) is the payment that is required for one (1) payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received, e.g., bi-monthly, monthly, semi-annually, or annually. All of the participant’s benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the participant’s required beginning date. Any additional benefits accruing to the participant in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.

1. (D) If the participant’s interest is being distributed in the form of a joint and survivor annuity for the joint lives of the participant and a nonspouse beneficiary, annuity payments to be made on or after the participant’s required beginning date to the designated beneficiary after the participant’s death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the participant using the table set forth in Q&A-2 of section 1.401(a)(9)-6 of the Treasury regulations. If the form of distribution combines a joint and survivor annuity for the joint lives of the participant and a nonspouse beneficiary and a period certain annuity, the requirement in the preceding sentence will apply to annuity payments to be made to the designated beneficiary after the expiration of the period certain. Unless the participant’s spouse is the sole designated beneficiary and the form of distribution is a period certain and no live annuity, the period certain for an annuity distribution commencing during the participant’s lifetime may not exceed the applicable distribution period for the participant under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the participant reaches age seventy (70), the applicable distribution period for the participant is the distribution period for age seventy (70) under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the excess of seventy (70) over the age of the participant as of the participant’s birthday in the year that contains the annuity starting date. If the participant’s spouse is the participant’s sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the participant’s applicable distribution period, as determined under this section, or the joint life and last survivor expectancy of the participant and the participant’s spouse as determined under the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the participant’s and spouse’s attained ages as of the participant’s and spouse’s birthdays in the calendar year that contains the annuity starting date.

2. (E) If the participant dies before the date distribution of his or her interest begins and there is a designated beneficiary, the participant’s entire interest will be distributed, beginning no later than the time described in subsection (5)(A) over the life of the designated beneficiary or over a period certain not exceeding:

   1. 1. Unless the annuity starting date is

before the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar year immediately following the calendar year of the participant’s death; or

1. 2. If the annuity starting date is before

the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar year that contains the annuity starting date. If the participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the participant’s death, distribution of the participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the participant’s death. If the participant dies before the date distribution of his or her interest begins, the participant’s surviving spouse is the participant’s sole designated beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this subsection will apply as if the surviving spouse were the participant, except that the time by which distributions must begin will be determined without regard to subsection (5)(A).

1. (F) The following definitions shall apply for purposes of this section:

   1. 1. Designated beneficiary shall mean the

individual who is designated as the beneficiary under the terms of the plan and is the designated beneficiary under Code section 401(a)(9) and section 1.401(a)(9)-1, Q&A-4 of the Treasury regulations.

1. 2. A distribution calendar year is a cal-

endar year for which a minimum distribution is required. For distributions beginning before the participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant’s required beginning date. For distributions beginning after the participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to subsection (5)(A).

1. 3. Life expectancy means an individ-

ual’s life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations. (6) Non-Assignability of Benefits/Child Suport. A participant’s right to an annuity or other benefits under the plan shall not be subject to execution, garnishment, attachment, writ of sequestration, the operation of bankruptcy or insolvency laws, a qualified domestic relations order (as defined in 26 U.S.C. section 414(p) or 29 U.S.C. section 1056(d)), or to any other claim or process of law whatsoever, and shall be unassignable, except that any payment from the plan shall be subject to the collection of child support.

1. (7) Return of Mistaken Payments. Notwithstanding anything to the contrary, a participant or beneficiary is entitled to only those benefits provided by the plan and promptly shall return any payment, or portion thereof, made by mistake of fact or law. The board may offset the future benefits of any recipient who refuses to return an erroneous payment, in addition to pursuing any other remedies provided by law. Without limiting the generality of the foregoing, in the event any payment is made to or on behalf of a deceased member after such member’s death by mistake of fact or law, the recipient of or other person benefiting from such payment shall promptly return any such payment to the plan, and the board may offset the future benefits of any participant or beneficiary otherwise entitled to a benefit under the plan who received or benefited from any such mistaken payment made to or on behalf of a deceased member by such amount as the board deems appropriate, including by the amount of the mistaken payment and interest on such amount.
2. (8) Correction of Underpayments. Should any error result in any participant or beneficiary receiving less than he or she should have been entitled, then such error shall be corrected by paying the participant or beneficiary a lumpsum amount equal to the underpayment, without interest.
3. (9) In the case of special consultants, as provided for in section 50.1090.2, RSMo, who do not return buyback invoices or requested supporting documentation, the benefit will begin on the first of the month following payment of the initial fifty percent (50%) buyback amount.

AUTHORITY: section 50.1032, RSMo 2000.* Original rule filed July 29, 1997, effective Jan. 30, 1998. Rescinded and readopted: Filed Sept. 29, 2000, effective March 30, 2001. Amended: Filed April 23, 2003, effective Oct. 30, 2003. Amended: Filed July 6, 2005, effective Jan. 30, 2006. Amended: Filed Nov. 10, 2005, effective May 30, 2006. Amended: Filed Feb. 21, 2006, effective Sept. 30, 2006. Amended: Filed Aug. 31, 2009, effective March 30, 2010. Amended: Filed Jan. 25, 2010, effective July 30, 2010. Amended: Filed Aug. 24, 2011, effective March 30, 2012.

*Original authority: 50.1032, RSMo 1995.