§1532. Direct rollover of eligible rollover distributions

A. Notwithstanding any provision of this pension 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 board of trustees, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

B. For purposes of this Section:

(1) "Direct rollover" means a payment by the plan to the eligible retirement plan specified by the distributee.

(2)(a) "Distributee" means a member or former member.

(b) In addition, the member's or former member's surviving spouse or the member's or former member's spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code, hereinafter referred to in this Section as "the Code", is a "distributee" with regard to the interest of the spouse or former spouse.

(c) The member's or former member's non-spouse beneficiary is also a distributee.

(3)(a) "Eligible retirement plan" means an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, a qualified trust described in Section 401(a) of the Code, or, for a distribution elected by a non-spouse beneficiary, an inherited individual retirement account described in Section 402(c)(11) of the Code, that accepts the distributee's eligible rollover distribution.

(b) In the case of an eligible rollover distribution to a surviving spouse, however, an "eligible retirement plan" is only an individual retirement account or individual retirement annuity.

(c) In the case of an eligible rollover distribution to a non-spouse beneficiary, an "eligible retirement plan" is only an inherited individual retirement account established for that non-spouse beneficiary in accordance with Section 402(c)(11) of the Code.

(4) "Eligible rollover distribution" means any distribution made on or after December 1, 1994, of all or any portion of the balance to the credit of the distributee, except that an "eligible rollover distribution" does not include: any 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 Code; and the portion of any distribution that is not includable in gross income.

C.(1) The fund shall, within a reasonable period of time before making an eligible rollover distribution as provided for in Subsection A of this Section, provide a written explanation of the following to the recipient of such distribution:

(a) The provisions under which the recipient may have the distribution directly transferred to an eligible retirement plan and that the automatic distribution by direct transfer applies to certain distributions in accordance with Section 401(a)(31)(B) of the Code.

(b) The provision which requires the withholding of tax on the distribution if it is not directly transferred to an eligible retirement plan.

(c) The provisions under which the distribution will not be subject to tax if transferred to an eligible retirement plan within sixty days after the date on which the recipient received the distribution.

(d) The provisions under which distributions from the eligible retirement plan receiving the distribution may be subject to restrictions and tax consequences that are different from those applicable to distributions from the plan making such distribution.

(2) For the purposes of this Subsection, the term "reasonable period of time" shall have the meaning assigned to it by Section 401(a)(31) of the Code and the regulations thereunder.

Acts 1999, No. 34, §1; Acts 2012, No. 481, §1, eff. June 5, 2012; Acts 2018, No. 344, §1, eff. June 30, 2018.