Current through Register Vol. XLI, No. 24, June 14, 2024
Section 162-3-7 - Distribution of Benefits7.1. Method of distribution of vested member annuity account. A terminated member shall elect in writing to receive a distribution of the vested portion of his or her annuity account in one of the following forms, to the extent not inconsistent with the applicable provisions of the Internal Revenue Code or W. Va. Code § 18-7B-12a: (1) a lump-sum distribution; (2) periodic payments as selected by the member over a period of no less than three (3) years; (4) any other annuity forms approved by the Board.7.2. Time of distribution. The following provisions applicable to the timing of distributions are subject to the provisions of W. Va. Code § 18-7B-12a. 7.2.1. If the member dies, terminates his or her employment with a participating employer, or has been certified to be permanently and totally disabled, in accordance with the provisions of the System, then the Board shall make the first periodic or lump-sum payment upon written election of the member or beneficiary, on a form approved by the Board, of the intention to receive a distribution of benefits.7.2.2. Distribution shall commence by the first day of April following the later of: (1) the calendar year in which the member attains the age of seventy and one-half (70 !/4), or (2) the calendar year in which the member retires or otherwise ceases employment with the participating employer.7.2.3. If the member dies after distributions to him or her has begun but before his or her entire accrued benefit has been distributed to him or her, the Board shall distribute the remaining portion of his or her accrued benefit from the Teachers' Defined Contribution Retirement System at least as rapidly as under the method of distribution previously established for him or her, if that method is irrevocable at the time of his or her death.7.2.4. If the member dies before full distribution of his or her interest commences, then distributions of the member's remaining accrued benefit shall be completed by the end of the fifth (5th) calendar year following the year of his or her death. However, installment distributions to a designated beneficiary which begin not later than the end of the calendar year following the death of the member comply with this five (5) year distribution requirement (even though the installment payments are not completed within five (5) years of the member's death) if the distributions are made at a rate which is not longer than that calculated (by using the rules set forth in the United States Internal Revenue Code Section 401 (a)(9) and the corresponding Treasury Regulations §1.401(a)(9)) to provide payment of all member's accrued benefit during the anticipated life expectancy of the designated beneficiary. Provided that if the designated beneficiary is the surviving spouse of the deceased member, the distributions can begin as long after the member's death as the date on which the deceased member would have attained the age of seventy and one-half (70 Vt). If the surviving spouse dies before distributions to the surviving spouse have begun, the Teachers' Defined Contribution Retirement System may make distributions to the beneficiary at the times as described in this Section as it would have if the surviving spouse had been a deceased member.7.2.5. For purposes of this Section, any amount paid to a child of a member will be treated as if it had been paid to the surviving spouse of the member if the remaining amount becomes payable to the surviving spouse when the child reaches the age of majority.7.3. Distribution after death of beneficiary. In the event of the death of a beneficiary (or a contingent beneficiary, if applicable) prior to the completion of payments of benefits due the beneficiary from the plan, the full amount of the unpaid benefits shall immediately vest in and become the property of the estate of the beneficiary.7.4. Suspense account for terminated members. If a member has terminated his or her employment but his or her employer account is not one hundred percent (100%) vested, all non-vested funds in his or her employer account shall be held in suspense until the happening of the earliest of the following: (1) the Teachers' Defined Contribution Retirement System is notified the member returns to employment with a participating employer; or(2) the member fails to return to employment with a participating employer within five (5) years of the date of termination. At that time the member's employer account shall cease to be held in suspense. If a member has returned to employment with a participating employer within five (5) years of the date of termination, and providing any distribution has been repaid, his or her employer account which has been held in suspense shall be restored to his or her credit. If the member does not return to employment with a participating employer within five (5) years, the non-vested portion of the employer account held in suspense shall be irrevocably forfeited and reallocated in accordance with W. Va. Code § 18-7B-11 for the plan year in which the forfeiture occurs. The suspension account shall share in any appreciation, depreciation or net income or loss as if it were not in suspense.7.4.1. The Board may permit or require any participating employer who owes outstanding employer contributions, delinquency fees or correction of error interest to the Teachers' Defined Contribution Retirement System to use irrevocably forfeited amounts from the participating employer's suspense account to offset the delinquent or owed amounts. Using irrevocably forfeited amounts pursuant to the authority of this subsection will reduce the employer contributions in future years as required by W. Va. Code § 18-7B-11.7.5. Unable to locate member or beneficiary. If the Board is unable to locate the member or beneficiary to whom benefits are to be distributed and the Board staff has exercised due diligence to find him or her, including sending notification by certified or registered mail to his or her last known address, the Board shall allocate the member's accrued benefits to the default fund. All the funds shall be held in the default fund for distribution to the member or beneficiary when located.7.6. Repayment of cash-out. If a member receives a cash-out distribution from the plan as a result of ceasing to be an employee, he or she may repay to the plan the cash-out distribution he or she has received from it, in full.