City of Hagerstown, MD
Washington County
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Table of Contents
Table of Contents

§ 38-39 Death benefits.

Upon a participant's death, those persons designated pursuant to § 38-48 shall receive a lump sum distribution of the participant's refundable contributions benefit, if the participant was entitled to the benefit. The only additional benefits payable under the plan in the event of the death of a participant shall be paid to those persons designated in accordance with this § 38-48 as follows:
A. 
Ordinary death benefit. In the event of the death of a participant prior to his or her benefit commencement date, while not in the line of duty, the participant's beneficiary shall be entitled to receive either the benefits described in Subsection A(1) or those described in Subsection A(2), as applicable:
(1) 
General benefit. The beneficiary shall be entitled to receive:
(a) 
The participant's employee contributions benefit, payable in one or more installments over a period which meets the requirements of § 38-40 and which is designated by the participant, or, if the participant has made no designation, by his or her beneficiary; plus
(b) 
An amount, payable as a single lump sum, equal to the participant's annualized compensation determined as of the date of death; provided, however, that the benefit provided by this Subsection A(1)(b) shall be payable only if the participant had died while a covered employee and after completing at least one year of eligibility service.
(2) 
Surviving spouse annuity benefit.
(a) 
If all of the following conditions are met, then the surviving spouse of a deceased participant shall be entitled to receive a survivor annuity, in lieu of any other plan benefit:
[1] 
The participant is married on the date of death;
[2] 
The participant's death occurs before the participant's benefit commencement date;
[3] 
The participant has designated the participant's surviving spouse as his or her only primary beneficiary;
[4] 
Either the participant would have been eligible to receive early retirement benefits pursuant to § 38-29 had the participant retired the day before his or her death, or the participant has attained age 55 and received credit for at least 20 years of eligibility service;
[5] 
The participant has not died in the line of duty as described in § 38-39B; and
[6] 
The spouse does not elect to receive the benefit provided in Subsection A(1) above.
(b) 
For purposes of this subsection, a "survivor annuity" is a monthly income commencing in the month next following the participant's death, and continuing for the remainder of the spouse's life, in an amount equal to the actuarial equivalent of the benefit the spouse would have received under an immediate joint and survivor annuity pursuant to § 38-42 (with a 100% survivor benefit) had the participant retired on the day before his or her death.
B. 
Line of duty death benefit. In the event of the death of a participant, prior to the participant's benefit commencement date, while in the line of duty (as defined below), the participant's beneficiary shall be entitled to receive the benefits described in Subsection B(1), (2) or (3), as applicable.
(1) 
General benefit. The beneficiary shall be entitled to receive:
(a) 
The participant's employee contributions benefit, payable in one or more installments over a period which meets the requirements of § 38-40 and which is designated by the participant, or, if the participant has made no designation, by his or her beneficiary; plus
(b) 
An amount, payable as a single lump sum, equal to the participant's annualized compensation determined as of the date of death; provided, however, that the benefit provided by this Subsection B(1)(b) shall be payable only if the participant has died while a covered employee.
(2) 
Surviving spouse benefit.
(a) 
If all of the following conditions are met, then the surviving spouse of a deceased participant shall be entitled to receive a survivor benefit, in lieu of any other plan benefit:
[1] 
The participant is married on the date of death;
[2] 
The participant's death occurs before the benefit commencement date;
[3] 
The participant has designated the participant's surviving spouse as his or her beneficiary;
[4] 
The participant has died in the line of duty as described in this § 38-39B; and
[5] 
Upon the death of the participant, the spouse does not elect to receive the benefits provided in § 38-39B(1).
(b) 
Monthly benefit.
[1] 
For purposes of this subsection, the line of duty survivor benefit is a monthly income commencing in the month next following the participant's death and continuing for the remainder of the spouse's life or earlier remarriage in an amount equal to 662/3% of the participant's compensation determined as of the day before the participant's death.
[2] 
In the event of the death or remarriage of the spouse following the death of the participant, a monthly benefit equal to 50% of such compensation shall be paid, in the aggregate, to the participant's surviving children who are named as contingent beneficiaries.
[3] 
The monthly benefits payable to any child of the participant pursuant to this subsection shall continue until the first day of the month preceding the earlier of:
[a] 
The death of the child; or
[b] 
The later of the child's:
[i] 
Attainment of age 18; or
[ii] 
Attainment of age 23, but only so long as the child remains a full-time student.
(3) 
Surviving children's benefit.
(a) 
If all of the following conditions are met, then the surviving children of a deceased participant shall receive a survivor benefit, in lieu of any other plan benefit:
[1] 
The participant's death occurs before the benefit commencement date;
[2] 
The participant has designated one or more of the participant's children as his or her only primary beneficiaries; and
[3] 
The participant has died in the line of duty as described in this § 38-39B.
(b) 
Monthly benefit.
[1] 
For purposes of this subsection, the line of duty survivor children's benefit is a monthly income commencing in the month next following the participant's death in an amount equal to 50% of the participant's compensation determined as of the day before the participant's death and paid, in the aggregate, to the participant's surviving children who are named as primary beneficiaries.
[2] 
The monthly benefits payable to any child of the participant pursuant to this subsection shall continue until the first day of the month preceding the earlier of:
[a] 
The death of the child; or
[b] 
The later of the child's:
[i] 
Attainment of age 18; or
[ii] 
Attainment of age 23, but only so long as the child remains a full-time student.
(4) 
Line of duty definition. For purposes of this section, the term "line of duty" means death from an injury or illness which has been sustained as an active covered employee and which has been ruled compensable under the Workers' Compensation Law of Maryland.
C. 
Benefits payable after benefit commencement date. If a participant dies after the participant's benefit commencement date, the benefits, if any, to which his or her beneficiary shall be entitled shall depend upon the form in which the participant's benefits were payable at the time of death, under the applicable form of benefit described in §§ 38-41 through 38-44.
D. 
Military service death benefit. In the event of the death of a participant while performing qualified military service on or after January 1, 2007, that participant's beneficiary shall be entitled to any death benefits and other benefits that would have been provided under the plan had the participant resumed employment on the day preceding death and been deemed to have terminated employment on account of death on the actual date of death. The term "qualified reservist" means an individual who is a member of a reserve component, as defined in Section 101 of Title 37 of the United States Code, and who is ordered or called to active duty after September 11, 2001, either for a period in excess of 179 days or for an indefinite period; and the term "qualified military service" means military service as used in Section 414(u)(1) of the Internal Revenue Code.
[Added 11-24-2015 by Ord. No. O-15-26[1]]
[1]
Editor's Note: This ordinance also stated that the new provisions set forth in Subsection D have an effective date of 1-1-2007.

§ 38-40 Limitations.

[Amended 6-18-2013 by Ord. No. O-13-09[1]]
All death benefits payable pursuant to § 38-39 shall be distributed only in accordance with regulations prescribed by the Internal Revenue Service under Section 401(a)(9) of the Internal Revenue Code. To the extent required thereby, such benefits shall be distributed in full not later than the last day of the calendar year containing the fifth anniversary of the death of the participant, except as follows:
A. 
Distributed over lifetime of beneficiary. Unless the participant or the participant's beneficiary irrevocably elects pursuant to any elective provision which may be then present in the plan (which election must be prior to the earliest date on which distribution would be otherwise required pursuant to this section) to have the aforesaid five-year limit apply, benefits payable to or for the benefit of the participant's beneficiary, and which begin not later than the last day of the calendar year containing the first anniversary of the participant's death, may be distributed over the life of the beneficiary or a period certain not extending beyond the life expectancy of the beneficiary, under a method of distribution which meets the requirements of § 38-43 (but with life expectancy based upon the beneficiary's attained age as of the beneficiary's birthday in the calendar year in which falls the date on which non-annuity benefits are required to commence pursuant to this subsection, or if earlier, the date on which annuity benefits actually commence).
B. 
When annuity benefits commence before participant's death. If annuity benefits meeting the requirements of § 38-43 had commenced prior to the participant's death, then, in either case, the death benefits payable pursuant to §§ 38-39 through 38-40 may be distributed without regard to the aforesaid five-year limit, but must be distributed at least as rapidly as they would have been under the predeath method of distribution.
[1]
Editor’s Note: This ordinance provided that it become effective on 1-1-2013.

§ 38-41 Method of payment.

A. 
All benefit distributions shall be in cash (or in annuity contracts as provided herein).
B. 
The City shall determine, in its discretion, whether the distribution shall be funded through periodic payments made directly from the trust, or through the purchase of annuity contracts, or whether a combination of such methods of distribution shall be used, and the City shall give to the Trustees such directions and information as may be necessary for the Trustees to carry out the decision of the City.
C. 
If the City shall determine that the whole or any part of the distribution is to be funded through the purchase of an annuity contract for a participant, the City shall select such form of contract (including a variable annuity) to be so purchased and shall direct the Trustees to pay the premium of such contract to the issuing company.
D. 
The City shall direct that all right, title and interest in such contract shall remain in the Trustees under the terms of the plan and the participant shall have no right, title or interest therein except to receive the payments therefrom as provided therein, and to change the beneficiary from time to time.
E. 
Alternatively, the City may direct that the contract shall be purchased in the name of the participant and distributed to the participant free and clear of the trust, in which case:
(1) 
The contract shall be issued so as to be nontransferable;
(2) 
It shall not contain a death benefit in excess of the greater of the reserve or the total premiums paid for annuity benefits; and
(3) 
It shall not contain provisions that expand upon, change or eliminate any plan provisions applicable to distributions in annuity form.

§ 38-42 Optional forms of benefit.

A participant, subject to the conditions hereinafter set forth, may elect to receive, in lieu of the normal monthly form of retirement income described in § 38-28, a benefit, which is its actuarial equivalent, payable in any of the following forms and in the form described in § 38-44:
A. 
Joint and survivor option.
(1) 
The joint and survivor option is a monthly income payable during the participant's lifetime and continuing after the participant's death at the rate of either 50% or 100% (as elected by the participant) to his or her beneficiary for the remainder of such beneficiary's life.
(2) 
If the participant's beneficiary dies before the date on which the participant's benefits commenced (whether before or after his or her termination date), the election shall thereupon become void.
(3) 
If the participant's beneficiary dies after the date on which the participant's benefits have commenced, or the participant becomes divorced from the beneficiary, but before the death of the participant, the election shall remain effective and the participant shall continue to receive the reduced retirement income payable to him or her in accordance with the option.
B. 
Pop-up option.
(1) 
The pop-up option is a monthly income payable during the participant's lifetime and continuing after the participant's death at the rate of either 50% or 100% (as elected by the participant) to his or her beneficiary for the remainder of the beneficiary's life.
(2) 
If the participant's beneficiary dies before the date on which the participant's benefits commenced (whether before or after his or her termination date), the election shall thereupon become void.
(3) 
If the participant's beneficiary dies, or if the participant becomes divorced from the beneficiary, after the date on which the participant's benefits have commenced, but before the death of the participant, the election shall likewise become void, and the participant shall receive, commencing on the first day of the month following the beneficiary's death (or divorce), the monthly benefit which the participant would have received had his or her benefits originally been payable as a life only option, as described in § 38-42C; and such benefit shall thereafter be payable as a life only option.
C. 
Life only option. The life only option, which is the normal form of benefit under the plan, is a monthly income payable during the participant's lifetime, with no payments to be made after the last payment prior to the participant's death.
D. 
Lump sum option. The lump sum option is a cash-out of the participant's employee contributions benefit in lieu of all other benefits under the plan, as described in §§ 38-26 and 38-27.
E. 
Single life annuity with refund. The single life annuity with refund option is a monthly income payable during the participant's lifetime, and, upon the participant's death, the participant's beneficiary will receive a lump sum payment of an amount which is the unpaid balance of the present value of the participant's employee contributions benefit or accrued benefit (as elected by the participant).
F. 
Social security leveling option. The social security leveling option is a monthly income payable for the participant's lifetime which is greater prior to the commencement of payment to the participant of social security retirement benefits and is less after the commencement of such benefits so that the participant receives substantially equal monthly payments.

§ 38-43 General provisions applicable to options.

A. 
Minimum distribution requirements. Notwithstanding any other provision in the plan to the contrary, distribution shall be made only in accordance with regulations published by the Internal Revenue Service under Section 401(a)(9) of the Internal Revenue Code. To the extent required thereby, distribution of benefits shall comply with the following limitations:
[Amended 1-27-2009 by Ord. No. O-08-29]
(1) 
Start; duration.
(a) 
Except as otherwise provided below, distribution shall begin not later than the calendar year (hereinafter referred to as the "commencement year") in which the participant reaches age 70 1/2 or in which he or she subsequently retires.
(b) 
Distribution shall be made:
[1] 
Over the life of the participant or the lives of the participant and the participant's beneficiary; and/or
[2] 
Over a period certain not extending beyond the life expectancy of the participant or the joint life and last survivor expectancy of the participant and his or her beneficiary, or, if shorter, the alternate period all as described in Treasury Regulation Section 401(a)(9)-6.
(2) 
A required distribution shall be deemed to have been made during the commencement year if actually made by the following April 1, but such delayed distribution shall not change the amount of such distribution, and the distribution otherwise required during the subsequent calendar year shall be calculated as if the first distribution had been made on the last day of the commencement year.
(3) 
Benefits paid prior to the commencement year shall reduce the aggregate amount subject to (but shall not otherwise negate) the minimum distribution requirements described herein.
(4) 
Nothing contained in this subsection shall prevent distribution of annuity benefits providing for non-increasing [except as otherwise permitted in Treasury Regulation 401(a)(9)-6] payments beginning not later than the commencement year [except as provided in Subsection A(3) above] and payable at least annually over a period permitted by this subsection (for which purpose, if benefit commencement under the annuity precedes the commencement year, each relevant life expectancy shall be based on the individual's attained age as of his or her birthday occurring in the calendar year in which benefit commencement occurs). Any benefits accruing after the commencement year shall be treated as a separate identifiable component distributable in accordance with this subsection beginning in the payment year following the year of accrual.
(5) 
If the provisions of this subsection require the commencement of benefits to a participant who has not yet terminated employment, distribution shall be made or commenced in accordance with §§ 38-41 through 38-44 as if the participant had retired on the last day of the commencement year. However, notwithstanding the commencement of benefits pursuant to this subsection, all other aspects of the participant's plan participation shall continue in accordance with the remaining provisions of the plan. The actuarial equivalent of any additional benefits which may accrue to the participant pursuant to § 38-30 after the participant's benefits have been paid or commenced by reason of this subsection shall increase the amount of periodic benefit payments being received by the participant under the plan.
B. 
Election procedures. An election of any optional form of benefit described in § 38-42, or any revocation or change of such election, must be made by a participant in writing, on a form supplied by or acceptable to the City.
[Amended 1-27-2009 by Ord. No. O-08-29]
C. 
Effect of death. In the event of the death of a participant prior to the date on which the participant's benefits are due to commence under the terms of the plan, no benefits shall be payable to the participant's spouse or other beneficiary except as provided in §§ 38-39 and 40, regardless of whether or not the participant has elected an optional form of benefit pursuant to §§ 38-41 through 38-44.
[Amended 1-27-2009 by Ord. No. O-08-29]
D. 
Timing of benefit commencement. Notwithstanding any other plan provision to the contrary, in no event (unless the participant otherwise elects pursuant to any elective provision which may be then present in the plan) shall benefits begin later than the 60th day after the close of the plan year in which occurs the latest of:
[Amended 1-27-2009 by Ord. No. O-08-29]
(1) 
The date on which the participant attains age 62 (or any earlier normal retirement age which may be then specified in the plan); or
(2) 
The termination of the participant's employment with the City.
E. 
Minimum distributions. With respect to distributions under the plan on or after January 1, 2001, for calendar years being on or after January 1, 2001, the plan will apply the minimum distribution requirements of Section 401(a)(9) of the Internal Revenue Code in accordance with the regulations under Section 401(a)(9) of the Internal Revenue Code that were proposed on January 17, 2001 (the “2001 Proposed Regulations”), notwithstanding any provisions of the plan to the contrary. If the total amount of required minimum distributions made to a participant for 2001 prior to January 1, 2001, are equal to or greater than the amount of required minimum distributions determined under the 2001 Proposed Regulations, then no additional distributions are required for such participant for 2001 on or after such date. If the total amount of required minimum distributions made to a participant for 2001 prior to January 1, 2001, are less than the amount determined under the 2001 Proposed Regulations, then the amount of required minimum distributions for 2001 on or after such date will be determined so that the total amount of required minimum distributions for 2001 is the amount determined under the 2001 Proposed Regulations. This amendment shall continue in effect until the last calendar year beginning before the effective date of the final regulations under Section 401(a)(9) of the Internal Revenue Code or such other date as may be published by the Internal Revenue section.
[Added 8-27-2002 by 2002-22]
F. 
Minimum distribution requirements: final regulations.
[Added 11-28-2006 by Ord. No. O-06-30]
(1) 
General.
(a) 
Precedence. The requirements of this Subsection F will take precedence over any inconsistent provisions of the plan.
(b) 
Requirements of treasury regulations incorporated. All distributions under this § 38-43 will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Internal Revenue Code.
(2) 
Time and manner of distribution.
(a) 
Required beginning date. The participant's entire interest will be distributed, or begin to be distributed, to the participant no later than the participant's required beginning date.
(b) 
Death of participant before distributions begin.
[1] 
If the participant dies before distributions begin, the participant's entire interest will be distributed, or begin to be distributed, no later than as follows:
[a] 
If the participant's surviving spouse is the participant's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the participant died, or by December 31 of the calendar year in which the participant would have attained age 70 1/2, if later.
[b] 
If the participant's surviving spouse is not the participant's sole designated beneficiary, then, except as provided in the adoption agreement, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the participant died.
[c] 
If there is no designated beneficiary as of September 30 of the year following the year of the participant's death, the participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant's death.
[d] 
If the participant's surviving spouse is the participant's sole designated beneficiary and the surviving spouse dies after the participant but before distributions to the surviving spouse begin this Subsection F(2)(b), other than Subsection F(2)(b)[1], will apply as if the surviving spouse were the participant.
[2] 
For purposes of this Subsection F(2)(b) and Subsection F(4), unless Subsection F(2)(b)[1][d] applies, distributions are considered to begin on the participant's required beginning date. If Subsection F(2)(b)[1][d] applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Subsection F(2)(b)[1]. If distributions under an annuity purchased from an insurance company irrevocably commence to the participant before the participant's required beginning date (or to the participant's surviving spouse before the date distributions are required to begin to the surviving spouse under Subsection F(2)(b)[1], the date distributions are considered to begin is the date distributions actually commence.
(c) 
Forms of distributions. Unless the participant'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 Subsection F(3) and (4). If the participant'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 Section 401(a)(9) of the Internal Revenue Code and the Treasury regulations.
(3) 
Required minimum distributions during participant's lifetime.
(a) 
Amount of required minimum distribution for each distribution calendar year. During the participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of:
[1] 
The quotient obtained by dividing the participant's account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the participant's age as of the participant's birthday in the distribution calendar year; or
[2] 
If the participant's sole designated beneficiary for the distribution calendar year is the participant's spouse, the quotient obtained by dividing the participant's account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the participant's and spouse's attained ages as of the participant's and spouse's birthdays in the distribution calendar year.
(b) 
Lifetime required minimum distributions continue through year of participant's death. Required minimum distributions will be determined under this Subsection F(3) beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the participant's date of death.
(4) 
Required minimum distributions after participant's death.
(a) 
Death on or after date distributions begin.
[1] 
Participant's survived by designated beneficiary. If the participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the participant's death is the quotient obtained by dividing the participant's account balance by the longer of the remaining life expectancy of the participant or the remaining life expectancy of the participant's designated beneficiary, determined as follows:
[a] 
The participant's remaining life expectancy is calculated using the age of the participant in the year of death, reduced by one for each subsequent year.
[b] 
If the participant's surviving spouse is the participant's sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year.
[c] 
If the participant's surviving spouse is not the participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the participant's death, reduced by one for each subsequent year.
[2] 
No designated beneficiary. If the participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the participant's death is the quotient obtained by dividing the participant's account balance by the participant's remaining life expectancy calculated using the age of the participant in the year of the death, reduced by one for each subsequent year.
(b) 
Death before date distributions begin.
[1] 
Participant survived by designated beneficiary. If the participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the participant's death is the quotient obtained by dividing the participant's account balance by the remaining life expectancy of the participant's designated beneficiary, determined as provided in Subsection F(4)(a).
[2] 
No designated beneficiary. If the participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the participant's death, distribution of the participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the participant's death.
[3] 
Death of surviving spouse before distributions to surviving spouse are required to begin. If the participant dies before the date distributions begin, the participant's surviving spouse is the participant's sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Subsection F(2)(b)[1], this Subsection F(4)(b) will apply as if the surviving spouse were the participant.
(5) 
Definitions. As used in this chapter, the following terms shall have the meanings indicated:
DESIGNATED BENEFICIARY
The individual who is designated as the beneficiary under § 38-48 of the plan and is the designated beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
DISTRIBUTION CALENDAR YEAR
A calendar year for which a minimum distribution is required. For distributions beginning before the participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant's required beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Subsection F(2)(b). The required minimum distribution for the participant's first distribution calendar year will be made on or before the participant's required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the participant's required beginning date occurs, will be made on or before December 31 of that distribution calendar year.
LIFE EXPECTANCY
Life expectancy as computed by the use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.
PARTICIPANT'S ACCOUNT BALANCE
The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of the dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.
REQUIRED BEGINNING DATE
The date specified in § 38-43A(1) of the plan.

§ 38-44 Eligible rollover distributions.

Notwithstanding any provision of the plan 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 Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
A. 
Definitions. As used in this section, the following terms shall have the meanings indicated:
DIRECT ROLLOVER
A payment by the plan to the eligible retirement plan specified by the distributee.
DISTRIBUTEE
Includes a participant or former participant. In addition, the participant's or former participant's surviving spouse and the participant's or former participant'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. Notwithstanding anything to the contrary in the plan, in any case where the participant or former participant is married to a person of the same sex, that participant's spouse shall not be treated as a distributee under this definition but shall be treated as a nonspouse beneficiary under § 38-45. However, the preceding sentence shall not apply and a same-sex spouse shall be treated as a distributee under this section to the extent permitted under Section 402(c)(11) of the Internal Revenue Code and administrative guidance thereunder.
[Amended 6-18-2013 by Ord. No. O-13-09[1]]
[Amended 8-27-2002 by Ord. No. 2002-22; 1-27-2009 by Ord. No. O-08-29]
(1) 
An "eligible retirement plan" is:
(a) 
An individual retirement account described in Section 408(a) of the Internal Revenue Code;
(b) 
An individual retirement annuity described in Section 408(b) of the Internal Revenue Code; or
(c) 
A qualified trust described in Section 401(a) of the Internal Revenue Code or an annuity plan described in Section 403(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution.
(2) 
With respect to distributions made after December 31, 2001, an "eligible retirement plan" shall also mean an annuity contract described in Section 403(b) of the Internal Revenue Code and an eligible plan under Section 457(b) of the Code 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.
(3) 
With respect to distributions made after December 31, 2007, an "eligible retirement plan" shall also mean a Roth IRA described in Section 408A of the Internal Revenue Code.
(4) 
With respect to distributions made after December 31, 2001, 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 relations order, as defined in Section 414(p) of the Internal Revenue Code.
ELIGIBLE ROLLOVER DISTRIBUTIONS
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:
(1) 
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 10 years or more;
(2) 
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).
[1]
Editor's Note: This ordinance provided that it become effective on 1-1-2013.

§ 38-45 Distribution to nonspouse beneficiaries.

[Added 1-27-2009 by Ord. No. O-08-29; 6-18-2013 by Ord. No. O-13-09]
This section applies to distributions made on or after February 26, 2009. Notwithstanding any provision of the plan to the contrary that would otherwise limit the options of the beneficiary of a deceased participant who is not a distributee [within the meaning of § 38-44A(3)], the Administrator shall, upon the request of such a beneficiary, transfer a lump sum distribution to the trustee of an individual retirement account established under Section 408 of the Internal Revenue Code in accordance with the provisions of Section 402(c)(11). Notwithstanding anything to the contrary in the plan, in any case where the participant or former participant is married to a person of the same sex, that participant's spouse shall be treated as a nonspouse beneficiary under this section. However, the preceding sentence shall not apply and a same-sex spouse shall be treated as a distributee under this section to the extent permitted under Section 402(c)(11) of the Internal Revenue Code and administrative guidance thereunder.

§ 38-46 (Reserved)

§ 38-47 (Reserved)