1. (A) Until the first payment on account of a retirement allowance becomes normally due, any member or beneficiary may elect, by filing with the system, to convert the retirement allowance otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value under one of the optional forms named below, the retirement allowance under the option selected being due and payable on the date of retirement:

   Option 1. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death to and for the life of the beneficiary, or the trustee of the beneficiary nominated by him by written designation duly acknowledged and filed with the board at the time of retirement if the person survives him. Any retirement allowance payable under this option, except an allowance for disability retirement pursuant to Section 9-9-65, shall be subject to the incidental death benefit limitation upon the payment of survivorship benefits to a nonspouse beneficiary under Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401(a)(9)-6, Q&A-2

   Option 2. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death at one-half the rate paid to him to and for the life of the beneficiary or the trustee of the beneficiary nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

   Option 3. A member may elect either Option 1 or 2 with the added provision that, if the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death must be equal to the retirement allowance which would have been payable had the member not elected the option;

   Option 4. A member may elect Option 1 or 2 with the added provision that the reduced retirement allowance after his death is payable in equal shares to and for the life of each of two or more beneficiaries, or to the trustee or trustees of the beneficiaries, for so long as each beneficiary survives him. The benefit reduction factor must be based on the average age of the beneficiaries.

2. (B) A member having elected Option 1, 2, or 3 and nominated his spouse to receive a retirement allowance upon the member's death may revoke the prior nomination and elect a new option only after the death of his spouse, a divorce, or other change in the member's marital status. This change may be accomplished only by filing with the system:

   1. (1) the form prescribed by the system, appropriately completed, signed by the member and notarized, that simultaneously both revokes the prior nomination and elects a new option and contains such other information as the system requires; or
   2. (2) a writing signed by the member and notarized that makes the same revocation and election and contains the identical information required by the prescribed form. The revocation and election of a new option is effective on the first day of the month in which the new option is elected. The retirement allowance payable following the election of a new option allowed by this paragraph must be computed upon the actuarial equivalent of the retirement allowance in effect immediately before the effective date of the new option. The revocation of the prior nomination and the election of a new option after the death of the member's spouse must be made before the first anniversary of the death of the spouse.
3. (C) A member may, upon occurrence of a change in his marital status after the date of retirement, revoke the form of payment elected and elect a new option effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.
4. (D) The board may approve a five-year pay-out plan developed by the actuary on the basis of the total retirement allowance for surviving beneficiaries, other than a spouse.
5. (E) Except as provided in this section, a retired member may not change the form of his monthly payment after the first payment of a retirement allowance is due.

HISTORY: 1962 Code Section 61-277; 1966 (54) 2081; 1982 Act No. 369, Section 2; 1984 Act No. 381, Section 2; 1986 Act No. 540, Part II, Section 23B, effective June 18, 1986, and became law without the Governor's signature; 1990 Act No. 412, Section 2, eff January 1, 1991; 1992 Act No. 336, Section 3, eff May 4, 1992; 1996 Act No; 458, Part II, Section 47B, eff June 19, 1996; 2008 Act No. 311, Sections 43, 52, eff June 4, 2008.

Effect of Amendment

The 1986 amendment inserted a second and third paragraph relative to revocation of nomination or form of payment and election of a new option in the event of divorce or in the event of a change in marital status after retirement.

The 1990 amendment revised this section.

The 1992 amendment revised the second paragraph, relating to retirement options.

The 1996 amendment revised the second undesignated paragraph.

The 2008 amendment designated subsections (A) to (D); in subsection (A), in Option 1 added the second sentence relating to the incidental death benefit limitation upon the payment of survivorship benefits to a nonspouse beneficiary; and added subsection (E) relating to form of allowance.