1. A. this section applies to distributions made on or after January 1, 1993. Not withstanding any provision of the System to the contrary that would otherwise limit a Distributee's election hereunder, a Distributee may elect, at the time and in the manner prescribed by the Board, to have a portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

2. B. As used in this section:

   1. 1. "Eligible Rollover Distribution" means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a seris of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or life expectancies) of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten (10) years or more, any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code of 1986, as amended; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).
   2. 2. "Eligible Retirement Plan" means an individual retirement account described in Section 405(a) of the Internal Revenue Code of 1986, as amended, and individual retirement annuity described in Section 405(b) of the Internal Revenue Code of 1986, as amended, or a qualified trust described in Section 401(a) of the Internal Revenue Code of 1986, as amended, that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. An Eligible Retirement Plan does not include a Roth IRA under Section 408(a) of the Internal Revenue Code of 1986, as amended.
   3. 3. "Distributee" means an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, as amended, are Distributees with regard to interest of the spouse or the former spouse.
   4. 4. "Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

3. C. At least thirty (30) days and not more than ninety (90) days before the date of distribution, the Distributee must be provided with a notice of rights which satisfies Code Section 402(f) as to rollover options and tax effects. Such distribution may commence less than thirty (30) days after the notice is given, provided that:

   1. 1. The Board clearly informs the Distributee that the Distributee has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution; and
   2. 2. The Distributee, after receiving the notice, affirmatively elects a distribution.

Laws 1999, HB 1814, c. 257, § 25, emerg. eff. July 1, 1999.