Mo. Code Regs. tit. 16 § 50-2.035
Current through Register Vol. 49, No.12, June 17, 2024
Section 16 CSR 50-2.035 - Payment of BenefitsPURPOSE: This amendment revises the benefit application and election procedures for members of the County Employees' Retirement Fund.
(1) Method of Payment. Prior to his or her annuity starting date, each Participantst 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- (A) Joint and One Hundred Percent (100%) Survivor Annuity. An annuity whereby a monthly installment shall be paid to the Participantst 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 Participantst or his or her survivor annuitant shall have lived the entire preceding calendar month;(B) Joint and Seventy-Five Percent (75%) Survivor Annuity. An annuity whereby a monthly installment shall be paid to the Participantst 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 Participantst or his or her survivor annuitant shall have lived the entire preceding calendar month;(C) Joint and Fifty Percent (50%) Survivor Annuity. An annuity, whereby a monthly installment shall be paid to the Participantst 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 Participantst or his or her survivor annuitant shall have lived the entire preceding calendar month;(D) Ten (10)-Year Certain and Life Annuity. An annuity whereby a monthly installment shall be paid to the Participantst during his or her lifetime. If the Participantst dies after receiving one hundred twenty (120) monthly payments, the annuity shall end with the calendar month immediately following the Participantst's death. If the Participantst dies before one hundred twenty (120) monthly payments have been made, then the remaining payments under the form shall be made to the Participantst's beneficiary (if surviving), or in a single sum to the Participantst's estate, if the beneficiary predeceases the Participantst. Alternatively, in the event the Participantst's beneficiary dies before one hundred twenty (120) monthly payments have been made, the Participantst 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 Participantst, but dies before one hundred twenty (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 Participantst 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 Participantst's estate;(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 Participantst 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 Participantst reaches age sixty-two (62) and ii) the monthly Social Security benefit payable to the Participantst at age sixty-two (62); or(F) Level Income Option-Joint and Survivor. 1. An annuity, whereby a monthly installment shall be paid to the Participantst 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 Participantst, to his or her survivor annuitant during his or her lifetime, on the first day of each calendar month in which the Participantst 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 Participantst 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 Participantst reaches age sixty-two (62) and ii) the monthly Social Security benefit payable to the Participantst at age sixty-two (62). If the Participantst 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 Participantst would have reached age sixty-two (62) in the manner that the Participantst's annuity would have been adjusted on such date.2. Notwithstanding anything in the preceding paragraph to the contrary, if the monthly benefit payable to the Participantst under this form beginning with the month after the Participantst'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 Participantst attains age sixty-two (62) shall be a period-certain annuity, commencing on the Participantst's annuity starting date, and ending on the date immediately before the first day of the month after the Participantst attains (or would have attained) age sixty-two (62). If the Participantst dies before attaining age sixty-two (62), then the remaining payments under the form shall be made to the Participantst's survivor annuitant (if surviving), or in a single sum to the Participantst's estate, if the survivor annuitant predeceases the Participantst. Alternatively, in the event the Participantst's survivor annuitant dies before the Participantst (and the monthly benefit payable under this form beginning with the month after the Participantst's sixty-second birthday is zero (0)), the Participantst 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 Participantst, but dies before the Participantst'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 Participantst die simultaneously before the Participantst's sixty-second birthday, then the remaining payments under the form shall be made in a single sum to the Participantst's estate.(2) Election of Payment Method. A payment option shall be elected, changed, or revoked by the Participantst, 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-(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 Participantst 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;(B) A Participantst 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 Participantst's required beginning date.(3) Election Process and Period. Generally, a participant must complete a two- (2-) step election process before he or she will receive benefits. A participant must complete an initial 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. After the board receives the initial application, the board or its designee will provide the participant with a final benefit calculation. The participant must elect a payment option in accordance with section (2) above within ninety (90) days after such final benefit calculation is sent to the participant. 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, or a payment option election form no later than ninety (90) days after the final benefit calculation is sent to the participant, the payments will not be retroactive to the date of separation from service. Once a participant has submitted the initial 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 both the application and the payment option election form have been completely processed. The payments will, however, be retroactive to the annuity starting date designated by the participant in his or her application, provided that the payment option election form is received within ninety (90) days after the final benefit calculation is sent to the participant. If a participant fails to complete the two- (2-) step election process within ninety (90) days after the final benefit calculation is sent to the participant, the participant's application shall be canceled and deemed void and the first benefit payment will not be paid on or retroactive to the annuity starting date designated by the participant in such application. Such a participant will be required to submit a new initial 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 and a payment option election form in the time and manner described in this section, as though such participant had never submitted an initial application previously. 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 the submission and complete processing of an initial application and payment option election form as described in this section, but in no event later than the participant's required beginning date.(4) Payments after Death of Survivor Annuitant. In the event a Participantst has chosen an optional form of payment which provides for a continuing payment to a survivor annuitant after the death of the Participantst in which the Participantst received a reduced annuity during his or her lifetime and the Participantst's survivor annuitant precedes the Participantst in death, the Participantst's benefit shall revert, effective the next month following the death of the Participantst'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 Participantst may have received prior to the survivor annuitant's death. Notwithstanding the preceding sentence, if the Participantst elected the Level Income Option-Joint and Survivor, pursuant to which the monthly benefit payable to the Participantst under this form beginning with the month after the Participantst's sixty-second birthday is greater than zero (0), and the Participantst's survivor annuitant precedes the Participantst in death, the Participantst'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 Participantst's duty to inform the board or its designee of the death of such a survivor annuitant.(5) 401(a)(9) Requirements. Notwithstanding anything to the contrary contained in the plan, the entire interest of a Participantst 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 Participantst'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. (A) If the Participantst dies before distributions begin, the Participantst's entire interest will be distributed, or begin to be distributed, no later than as follows: 1. If the Participantst's surviving spouse is the Participantst'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 Participantst died, or by December 31 of the calendar year in which the Participantst would have attained age seventy and one-half (70 1/2), if later;2. If the Participantst's surviving spouse is not the Participantst'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 Participantst died;3. If there is no designated beneficiary as of September 30 of the year following the year of the Participantst's death, the Participantst's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participantst's death;4. If the Participantst's surviving spouse is the Participantst's sole designated beneficiary and the surviving spouse dies after the Participantst but before distributions to the surviving spouse begin, this subsection (5)(A), other than paragraph (5)(A)1., will apply as if the surviving spouse were the Participantst. For purposes of this subsection and subsection (E), unless paragraph (5)(A)4. applies, distributions are considered to begin on the Participantst'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 Participantst before the Participantst's required beginning date (or to the Participantst'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.(B) Unless the Participantst'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 Participantst'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 Participantst'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.(C) If the Participantst's interest is paid in the form of annuity distributions under the plan, payments under the annuity will satisfy the following requirements: 1. The annuity distributions will be paid in periodic payments made at intervals not longer than one (1) year;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);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;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 Participantst'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 Participantst'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 Participantst's death; or iv) to pay increased benefits that result from a plan amendment; and5. The amount that must be distributed on or before the Participantst's required beginning date (or, if the Participantst 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 Participantst'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 Participantst's required beginning date. Any additional benefits accruing to the Participantst 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.(D) If the Participantst's interest is being distributed in the form of a joint and survivor annuity for the joint lives of the Participantst and a nonspouse beneficiary, annuity payments to be made on or after the Participantst's required beginning date to the designated beneficiary after the Participantst'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 Participantst 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 Participantst 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 Participantst'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 Participantst's lifetime may not exceed the applicable distribution period for the Participantst 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 Participantst reaches age seventy (70), the applicable distribution period for the Participantst 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 Participantst as of the Participantst's birthday in the year that contains the annuity starting date. If the Participantst's spouse is the Participantst'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 Participantst's applicable distribution period, as determined under this section, or the joint life and last survivor expectancy of the Participantst and the Participantst'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 Participantst's and spouse's attained ages as of the Participantst's and spouse's birthdays in the calendar year that contains the annuity starting date.(E) If the Participantst dies before the date distribution of his or her interest begins and there is a designated beneficiary, the Participantst'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. 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 Participantst's death; or2. 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 Participantst dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participantst's death, distribution of the Participantst's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participantst's death. If the Participantst dies before the date distribution of his or her interest begins, the Participantst's surviving spouse is the Participantst'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 Participantst, except that the time by which distributions must begin will be determined without regard to subsection (5)(A).(F) The following definitions shall apply for purposes of this section: 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.2. A distribution calendar year is a calendar year for which a minimum distribution is required. For distributions beginning before the Participantst's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participantst's required beginning date. For distributions beginning after the Participantst's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to subsection (5)(A).3. Life expectancy means an individual'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 Su-port. A Participantst'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.(7) Return of Mistaken Payments. Notwithstanding anything to the contrary, a Participantst 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 Participantst 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.(8) Correction of Underpayments. Should any error result in any Participantst or beneficiary receiving less than he or she should have been entitled, then such error shall be corrected by paying the Participantst or beneficiary a lump-sum amount equal to the underpayment, without interest.(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%) buy-back 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. Amended by Missouri Register December 15, 2016/Volume 41, Number 24, effective 1/29/2017*Original authority: 50.1032, RSMo 1995.