(A) Direct rollovers. Notwithstanding any provisions of the plan to the contrary that would otherwise limit a distributee's election under this division a distributee may elect, at the time and in the manner prescribed by the Retirement Board in accordance with applicable regulations, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
(1) A distributee who is entitled to elect a direct rollover with respect to all or any portion of a distribution but who does not make any election shall be deemed to have rejected the direct rollover option.
(2) A distributee who elects a direct rollover with respect to any eligible rollover distribution that is one in a series of installment payments made at least annually over a period of less than ten years shall be deemed to have made the same election with respect to all subsequent eligible rollover distributions in the series unless and until the distributee changes the election. A change of election shall be accomplished by notifying the Retirement Board of the change in the form and manner prescribed by the Retirement Board.
(3) Within a reasonable period of time before an eligible rollover distribution is to be made, the Retirement Board shall provide to the distributee an explanation of the right to elect a direct rollover and the federal tax withholding consequences of failing to elect a direct rollover. A distributee who elects a direct rollover must provide all information that the Retirement Board may require to complete the direct rollover.
(4) For the purposes of this division, the following definitions will apply:
(a) A "DIRECT ROLLOVER" is a payment by the plan to the eligible retirement plan specified by the distributee.
(b) Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified Domestic Relations Order, as defined in Section 414(p) of the Internal Revenue Code, are distributees with regard to the interest of the spouse or former spouse. A distributee also includes the member's nonspouse designated beneficiary under § 31.39(D). In the case of a non-spouse beneficiary, the direct rollover may be made only to an individual retirement account or annuity described in Section 408(a) or Section 408(b) ("IRA") of the Internal Revenue Code that is established on behalf of the designated beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Section 402(c)(ll) of the Internal Revenue Code. Also, in this case, the determination of any required minimum distribution under Section 401(a)(9) of the Internal Revenue Code that is ineligible for rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 I.R.B. 395.
(c) Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan described in Section 403(a) of the Internal Revenue Code, or a qualified trust described in Section 401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. For plan years commencing after December 31, 2001, an eligible retirement plan shall also mean an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Internal Revenue Code. For distributions made after December 31, 2007, a participant or beneficiary may elect to roll over directly an "eligible rollover distribution" to a Roth IRA described in Section 408A(b) of the Internal Revenue Code.
(d) Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities), any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code received after December 31, 1998 and effective for plan years commencing after December 31, 2001, any amount that is distributed on account of hardship. For plan years commencing after December 31, 2001, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includable in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Sections 408(a) or (b) of the Internal Revenue Code, or to a qualified defined contribution plan described in Sections 401(a) or 403(a) of the Internal Revenue Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.
(5) A distribution of less than $200 that would otherwise be an eligible rollover distribution as defined above shall not be an eligible rollover distribution if it is reasonable to expect that all such distributions to the distributee from the plan during the same calendar year will total less than $200.
(B) Rollovers to the plan. In no event shall the plan accept eligible rollovers from any source unless a re-employed member is making a repayment of his/her member contributions in accordance with the provisions of § 31.34(E).
(Ord. 435, passed 3-12-01; Am. Ord. 458, passed 6-3-02; Am. Ord. 666, passed 12-7-15)