104.1027.  Options for election of annuity reduction — spouse's benefits — dissolution of marriage, cancellation of election, when. — 1.  Prior to the last business day of the month before the annuity starting date, a member or a vested former member shall elect whether or not to have such member's or such vested former member's life annuity reduced, but not any temporary annuity which may be payable, and designate a beneficiary, as provided by the options set forth in this section; provided that if such election has not been made within such time, annuity payments due beginning on and after the month of the annuity starting date shall be made the month following the receipt by the appropriate system of such election and any other information required by the year 2000 plan created by sections 104.1003 to 104.1093, and further provided, that if such person dies after the annuity starting date but before making such election and providing such other information, no benefits shall be paid except as required pursuant to section 104.1030:

Option 1.

A retiree's life annuity shall be reduced to a certain percent of the annuity otherwise payable.  Such percent shall be ninety percent adjusted as follows:  if the retiree's age on the annuity starting date is younger than sixty-two years, an increase of three-tenths of one percent for each year the retiree's age is younger than age sixty-two years; and if the beneficiary's age is younger than the retiree's age on the annuity starting date, a decrease of three-tenths of one percent for each year of age difference; and if the retiree's age is younger than the beneficiary's age on the annuity starting date, an increase of three-tenths of one percent for each year of age difference; provided, after all adjustments the option 1 percent cannot exceed ninety-five percent.  Upon the retiree's death, fifty percent of the retiree's reduced annuity shall be paid to such beneficiary who was the retiree's spouse on the annuity starting date or as otherwise provided by subsection 5 of this section.

Option 2.

A retiree's life annuity shall be reduced to a certain percent of the annuity otherwise payable.  Such percent shall be eighty-three percent adjusted as follows: if the retiree's age on the annuity starting date is younger than sixty-two years, an increase of four-tenths of one percent for each year the retiree's age is younger than sixty-two years; and if the beneficiary's age is younger than the retiree's age on the annuity starting date, a decrease of five-tenths of one percent for each year of age difference; and if the retiree's age is younger than the beneficiary's age on the annuity starting date, an increase of five-tenths of one percent for each year of age difference; provided, after all adjustments the option 2 percent cannot exceed ninety percent.  Upon the retiree's death one hundred percent of the retiree's reduced annuity shall be paid to such beneficiary who was the retiree's spouse on the annuity starting date or as otherwise provided by subsection 5 of this section.

Option 3.

A retiree's life annuity shall be reduced to ninety-five percent of the annuity otherwise payable.  If the retiree dies before having received one hundred twenty monthly payments, the reduced annuity shall be continued for the remainder of the one hundred twenty-month period to the retiree's designated beneficiary provided that if there is no beneficiary surviving the retiree, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.  If the beneficiary survives the retiree but dies before receiving the remainder of such one hundred twenty monthly payments, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

Option 4.

A retiree's life annuity shall be reduced to ninety percent of the annuity otherwise payable.  If the retiree dies before having received one hundred eighty monthly payments, the reduced annuity shall be continued for the remainder of the one hundred eighty-month period to the retiree's designated beneficiary provided that if there is no beneficiary surviving the retiree, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.  If the beneficiary survives the retiree but dies before receiving the remainder of such one hundred eighty monthly payments, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

  2.  If a member is married as of the annuity starting date, the member's annuity shall be paid under the provisions of either option 1 or option 2 as set forth in subsection 1 of this section, at the member's choice, with the spouse as the member's designated beneficiary unless the spouse consents in writing to the member electing another available form of payment.

  3.  If a member has elected at the annuity starting date option 1 or 2 pursuant to this section and if the member's spouse or eligible former spouse dies after the annuity starting date but before the member dies, then the member may cancel the member's election and return to the life annuity form of payment and annuity amount, effective the first of the month following the date of such spouse's or eligible former spouse's death.  If a member dies prior to notifying the system of the spouse's death, the benefit will not revert to a life annuity and no retroactive payments shall be made.

  4.  If a member designates a spouse as a beneficiary pursuant to option 1 or option 2 of subsection 1 of this section and subsequently that marriage ends as a result of a dissolution of marriage, such dissolution shall not affect the option election pursuant to this section and the former spouse shall continue to be eligible to receive survivor benefits upon the death of the member, except a member may cancel his or her election if:

  (1)  The dissolution of marriage of the member and former spouse occurred on or after January 1, 2021, and the dissolution decree provides for sole retention by the member of all rights in the annuity and provides that the former spouse shall not be entitled to any survivor benefits pursuant to this chapter; or

  (2)  The dissolution of marriage of the member and former spouse occurred prior to January 1, 2021, and:

  (a)  The dissolution decree provided for the sole retention by the member of all rights in the annuity pursuant to this chapter, and the parties obtained an amended or modified dissolution decree after January 1, 2021, providing for immediate removal of the former spouse as the beneficiary entitled to survivor benefits to the satisfaction of the system; or

  (b)  The dissolution decree does not provide for the sole retention by the member of all rights in the annuity and the parties obtained an amended or modified dissolution decree after January 1, 2021, which provides for the sole retention by the member of all rights in the annuity and provides that the former spouse shall not be entitled to any survivor benefits pursuant to this chapter.

­­

­

Upon meeting the requirements of subdivision (1) or (2) of this subsection, the monthly benefit payable for the lifetime of the member shall be the actuarial equivalent of the annuity payable pursuant to the provisions of option 1 or option 2 of subsection 1 of this section, as adjusted for early retirement if applicable.  In no event shall the monthly benefit payable for the lifetime of the member be greater than the amount that would have been payable to the member under subsection 3 of this section, whichever is applicable, had the former spouse died on the date of the dissolution of marriage.  Any increase in the annuity amount pursuant to this subsection shall be prospective and effective the first of the month following the date of receipt by the system of a certified copy of the dissolution decree that meets the requirements of this subsection.  For purposes of this subsection, "actuarial equivalent" shall mean a benefit which, when computed upon the basis of specified actuarial assumptions approved by the board, is equal in value to a certain amount or other benefit.

  5.  Effective July 1, 2000, a member may make an election under option 1 or 2 after the annuity starting date as described in this section if the member makes such election within one year from the date of marriage or July 1, 2000, whichever is later, pursuant to any of the following circumstances:

  (1)  The member elected to receive a life annuity and was not eligible to elect option 1 or 2 on the annuity starting date; or

  (2)  The member's annuity reverted to a normal or early retirement annuity pursuant to subsection 3 or 4 of this section, and the member remarried.

  6.  Effective September 1, 2001, the retirement application of any member who fails to make an election pursuant to subsection 1 of this section within ninety days of the annuity starting date contained in such retirement application shall be nullified.  Any member whose retirement application is nullified shall not receive retirement benefits until the member files a new application for retirement pursuant to section 104.1024 and makes the election pursuant to subsection 1 of this section.  In no event shall any retroactive retirement benefits be paid.

  7.  A member may change a member's election made under this section at any time prior to the system mailing or electronically transferring the first annuity payment to such member.