104.1027. Options for election of annuity reduction--spouse's benefits.
Options for election of annuity reduction--spouse's benefits.
104.1027. 1. Prior to the last business day of the month before theannuity starting date, a member or a vested former member shall electwhether or not to have such member's or such vested former member's lifeannuity reduced, but not any temporary annuity which may be payable, anddesignate a beneficiary, as provided by the options set forth in thissection; provided that if such election has not been made within such time,annuity payments due beginning on and after the month of the annuitystarting date shall be made the month following the receipt by theappropriate system of such election and any other information required bythe year 2000 plan created by sections 104.1003 to 104.1093, and furtherprovided, that if such person dies after the annuity starting date butbefore making such election and providing such other information, nobenefits shall be paid except as required pursuant to section 104.1030:
Option 1. A retiree's life annuity shall be reduced to a certainpercent of the annuity otherwise payable. Such percent shall be ninetypercent adjusted as follows: if the retiree's age on the annuity startingdate is younger than sixty-two years, an increase of three-tenths of onepercent for each year the retiree's age is younger than age sixty-twoyears; and if the beneficiary's age is younger than the retiree's age onthe annuity starting date, a decrease of three-tenths of one percent foreach year of age difference; and if the retiree's age is younger than thebeneficiary's age on the annuity starting date, an increase of three-tenthsof one percent for each year of age difference; provided, after alladjustments the option 1 percent cannot exceed ninety-five percent. Uponthe retiree's death, fifty percent of the retiree's reduced annuity shallbe paid to such beneficiary who was the retiree's spouse on the annuitystarting date or as otherwise provided by subsection 5 of this section.
Option 2. A retiree's life annuity shall be reduced to a certainpercent of the annuity otherwise payable. Such percent shall beeighty-three percent adjusted as follows: if the retiree's age on theannuity starting date is younger than sixty-two years, an increase offour-tenths of one percent for each year the retiree's age is younger thansixty-two years; and if the beneficiary's age is younger than the retiree'sage on the annuity starting date, a decrease of five-tenths of one percentfor each year of age difference; and if the retiree's age is younger thanthe beneficiary's age on the annuity starting date, an increase offive-tenths of one percent for each year of age difference; provided, afterall adjustments the option 2 percent cannot exceed ninety percent. Uponthe retiree's death one hundred percent of the retiree's reduced annuityshall be paid to such beneficiary who was the retiree's spouse on theannuity starting date or as otherwise provided by subsection 5 of thissection.
Option 3. A retiree's life annuity shall be reduced to ninety-fivepercent of the annuity otherwise payable. If the retiree dies beforehaving received one hundred twenty monthly payments, the reduced annuityshall be continued for the remainder of the one hundred twenty-month periodto the retiree's designated beneficiary provided that if there is nobeneficiary surviving the retiree, the present value of the remainingannuity payments shall be paid as provided under subsection 3 of section104.620. If the beneficiary survives the retiree but dies before receivingthe remainder of such one hundred twenty monthly payments, the presentvalue of the remaining annuity payments shall be paid as provided undersubsection 3 of section 104.620.
Option 4. A retiree's life annuity shall be reduced to ninety percentof the annuity otherwise payable. If the retiree dies before havingreceived one hundred eighty monthly payments, the reduced annuity shall becontinued for the remainder of the one hundred eighty-month period to theretiree's designated beneficiary provided that if there is no beneficiarysurviving the retiree, the present value of the remaining annuity paymentsshall be paid as provided under subsection 3 of section 104.620. If thebeneficiary survives the retiree but dies before receiving the remainder ofsuch one hundred eighty monthly payments, the present value of theremaining annuity payments shall be paid as provided under subsection 3 ofsection 104.620.
2. If a member is married as of the annuity starting date, themember's annuity shall be paid under the provisions of either option 1 oroption 2 as set forth in subsection 1 of this section, at the member'schoice, with the spouse as the member's designated beneficiary unless thespouse consents in writing to the member electing another available form ofpayment.
3. If a member has elected at the annuity starting date option 1 or 2pursuant to this section and if the member's spouse or eligible formerspouse dies after the annuity starting date but before the member dies,then the member may cancel the member's election and return to the lifeannuity form of payment and annuity amount, effective the first of themonth following the date of such spouse's or eligible former spouse'sdeath. If a member dies prior to notifying the system of the spouse'sdeath, the benefit will not revert to a life annuity and no retroactivepayments shall be made.
4. If a member designates a spouse as a beneficiary pursuant to thissection and subsequently that marriage ends as a result of a dissolution ofmarriage, such dissolution shall not affect the option election pursuant tothis section and the former spouse shall continue to be eligible to receivesurvivor benefits upon the death of the member.
5. Effective July 1, 2000, a member may make an election under option1 or 2 after the annuity starting date as described in this section if themember makes such election within one year from the date of marriage orJuly 1, 2000, whichever is later, pursuant to any of the followingcircumstances:
(1) The member elected to receive a life annuity and was not eligibleto elect option 1 or 2 on the annuity starting date; or
(2) The member's annuity reverted to a normal or early retirementannuity pursuant to subsection 3 of this section, and the member remarried.
6. Effective September 1, 2001, the retirement application of anymember who fails to make an election pursuant to subsection 1 of thissection within ninety days of the annuity starting date contained in suchretirement application shall be nullified. Any member whose retirementapplication is nullified shall not receive retirement benefits until themember files a new application for retirement pursuant to section 104.1024and makes the election pursuant to subsection 1 of this section. In noevent shall any retroactive retirement benefits be paid.
7. A member may change a member's election made under this section atany time prior to the system mailing or electronically transferring thefirst annuity payment to such member.
(L. 1999 S.B. 308 & 314, A.L. 2000 H.B. 1808, A.L. 2001 S.B. 371, A.L. 2007 S.B. 406)