(1) In general. This Section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Retirement System to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
(2) Definitions.
(a) 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:
(.1) 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
(.2) for a specified period of ten years or more; or
(.3) any distributions to the extent such distribution is required under Section 401(a)(9) of the Tax Code; or
(.4) the portion of any distribution that is not includible in gross income.
(b) Eligible Retirement Plan. An eligible retirement plan is an individual retirement account described in Section 408(a) of the Tax Code, an individual retirement annuity described in Section 408(b) of the Tax Code, an annuity plan described in Section 403(a) of the Tax Code, an eligible deferred compensation plan as defined under Section 457(b) of the Tax Code, an annuity plan described under Section 403(b) of the Tax Code, or a qualified trust described in Section 401(a) of the Tax Code, that accepts the distributee's eligible rollover distribution. 182
(c) Distributee. A distributee includes a member and a member's spouse or Life Partner. The member's surviving spouse or Life Partner and the member's former spouse or Life Partner who is the alternative payee under an approved domestic relations order, as determined under Section 22-1303, are distributees with regard to the interest of the spouse or Life Partner, or former spouse or Life Partner. 183
(d) Direct Rollover. A direct rollover is a payment by the Retirement System to the eligible retirement plan specified by the distributee.
(e) Distribution. Payment of all or any portion of a person's interest in the Retirement System which is payable under this Title.
(3) Non-spouse Rollovers. Effective January 1, 2007, a non-spouse Beneficiary who is a designated Beneficiary within the meaning of Section 401(a)(9)(E) of the Tax Code may, after the death of the member, make a Direct Rollover of a distribution to an inherited individual retirement account (IRA) established on behalf of the designated Beneficiary; provided that the distributed amount satisfied all the requirements to be an Eligible Rollover Distribution other than the requirement that the distribution be made to the member or the member's spouse. Such Direct Rollovers shall be subject to the terms and conditions of Internal Revenue Service Notice 2007-7 and superseding guidance including, but not limited to, the provisions in Q&A-17 thereof regarding required minimum distributions. Effective January 1, 2010, the distributions described in this Section shall be subject to Sections 401(a)(31), 402(f) and 3405(c) of the Tax Code. 184
Notes
| 182 | |
| 183 | Amended, Bill No. 130224 (approved May 8, 2013). |
| 184 | Added, Bill No. 150235 (approved May 20, 2015). |