Sec. 5-165. Optional forms of retirement income.
Sec. 5-165. Optional forms of retirement income. (a) A member may elect one
of the following optional forms for retirement income by filing with the Retirement
Commission a written election on a form provided by the commission. A member who
has been married at least one year shall be presumed to have elected the option provided
in subdivision (1) of this subsection unless a contrary election is made by the member.
All other members will be presumed to elect the option provided in subdivision (4) of
this subsection unless a contrary election is made by the member. Any election or change
of election must be filed before retirement income payments begin. No option shall be
effective until a member has retired, and in the event a member dies prior to the effective
date of commencement of benefits, any election of an option shall be deemed cancelled
except as provided in subsection (c) of section 5-165a. The amount of income that will
be paid under the options will be determined by multiplying the retirement income
otherwise applicable by the actuarially equivalent option factors last adopted by the
Retirement Commission. Beginning with October 1, 1982, but only with regard to benefits payable on behalf of members whose benefits have not yet commenced, such factors
shall not differentiate by sex of the member, or the member's spouse or contingent
annuitant. The initial factors shall employ the interest rate and mortality table assumptions utilized for the December 31, 1980, valuation, with the factors assuming sixty per
cent male and forty per cent female for members, and sixty per cent female and forty
per cent male for spouses and contingent annuitants. The cost-of-living adjustment under
section 5-162d shall be assumed to be three per cent. The factors shall not take into
account the cost of providing the surviving spouse benefit under section 5-165a. The
factors may be periodically adjusted upward or downward by the Retirement Commission to reflect changing interest, mortality or election of option patterns provided that
they shall be reviewed and adjusted by January 1, 1985. Any such changes shall apply
only to members whose benefits commence after the effective date of adoption of such
factors. The retirement income options are as follows:
(1) A reduced amount payable to the member for his lifetime, with the provision
that after his death his spouse, if surviving, shall be entitled to receive a lifetime income
equal to fifty per cent of the reduced monthly amount payable to the member;
(2) A reduced amount payable to the member for his lifetime, with the provision
that after his death, his contingent annuitant shall be entitled to receive a lifetime income
equal to either fifty or one hundred per cent of the reduced amount payable to the
member;
(3) A reduced amount payable to the member for his lifetime, with the provision that
if he shall die within either a ten or twenty-year period following the date his retirement
income commences, whichever is selected by the member, the reduced amount continues to his contingent annuitant for the balance of the ten or twenty-year period; or
(4) An amount payable to the member for his lifetime, with no payments continuing
after the member's death, except for a lump sum death benefit as provided in subsection
(b) of section 5-168.
(b) Notwithstanding the provisions of subsection (a) of this section, a temporary
minimum shall apply whenever the Retirement Commission adopts revised factors
which could result in a smaller benefit to a member than would have been payable under
the previously existing factors. Such minimum shall be determined as follows: (1) The
benefit the member had earned as of the date of the change in factors shall be calculated,
based on his final earnings and service as of that date; (2) any early retirement reduction
in such benefit shall be based upon his age, as determined on the date benefits will
commence, and his type of retirement; and (3) the option factor shall be determined
utilizing the factors in effect prior to such change, but based on appropriate ages as of
the date benefits will commence. If such minimum results in a larger benefit, the larger
benefit shall be payable.
(1949 Rev., S. 384; 1951, S. 153d; 1958 Rev., S. 5-106; 1961, P.A. 234, S. 14; 1963, P.A. 487; 1969, P.A. 661, S. 1,
2; P.A. 83-533, S. 11, 54; P.A. 05-288, S. 31.)
History: 1961 act "restated" state employees retirement act "in a simpler, clearer and more orderly form"; 1963 act
added provision for annual notification to Subsec. (d); 1969 act deleted provision in Subsec. (b) re reduced payments to
spouse if member dies before retirement payments begin and deleted provision in Subsec. (d) requiring annual notification
of employees of right to choose husband and wife option; P.A. 83-533 deleted existing section in its entirety and replaced
with four options enumerated in Subsec. (a); (Revisor's note: In 1993 an obsolete reference in Subsec. (a) to repealed Sec.
5-162e was deleted editorially by the Revisors and the wording adjusted accordingly); P.A. 05-288 made technical changes
in Subsec. (b), effective July 13, 2005.
See Sec. 5-165a re computation of benefits for members who die prior to retirement.