§2224. Optional allowances

A. With the provision that no optional selection shall be effective in case a retiree dies within thirty days after retirement, and that such a retiree shall be considered as an active member at the time of death; until the first payment on account of any benefit becomes normally due, any member may elect to receive his benefit in an equal monthly retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent at the time of his retirement in a reduced equal monthly retirement allowance payable throughout life with the provisions that:

Option 1. If he dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to his legal representatives or to any person he shall designate in a written instrument acknowledged and filed with the board of trustees; or

Option 2. Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to any person he shall designate in a written instrument acknowledged and filed with the board of trustees at the time of his retirement; or

Option 3. Upon his death, one-half of his reduced retirement allowance shall be continued throughout the life of and paid to any person he shall designate in a written instrument acknowledged and filed with the board of trustees at the time of his retirement; or

Option 4. Upon his death, some other benefit in equal monthly payments designated by him at the time of his retirement shall be paid throughout the life of and to any person he shall designate in a written instrument acknowledged and filed with the board of trustees at the time of his retirement, provided, such other benefit, together with the reduced monthly retirement allowance, shall be certified by the actuary to be of equivalent actuarial value to his retirement allowance, and approved by the board of trustees.

B. Provided further, that if the beneficiary of the retiree is not the spouse of said retiree and the retiree dies with an eligible surviving minor child or children, the selection of the optional beneficiary shall be void and the minor child or children shall receive the benefits under R.S. 11:2220(B)(2).

C. If an option other than Option 1 as provided in Subsection A of this Section was selected, and the retiree's spouse was designated as the beneficiary, and a judgment of divorce is rendered with respect to the retiree and the spouse, and, in connection therewith, the spouse, irrevocably, by court order, relinquishes the spouse's survivorship rights under the option originally selected by the retiree, the originally selected option shall be considered revoked and the retiree shall be considered as retired under the maximum benefit, subject to reduction as hereinafter set forth. The benefits payable to the retiree shall be increased to the amount the retiree would have received had the retiree selected the maximum benefit, adjusted for any cost-of-living increase granted to the retiree, less any amount required as a result of such change in retirement status to render the new benefit to be the actuarial equivalent of the maximum benefit. The retiree or member who is or has participated in the Deferred Retirement Option Plan may select an option other than Option 1 as provided in Subsection A of this Section based upon the new benefit. The retiree shall be required to reimburse the system, by way of a one-time deduction from the retiree's next benefit check, the reasonable cost incurred by the system to have these calculations made. The retiree shall be required to contractually hold the system harmless in the event that the former spouse ever successfully asserts a property right relative hereto which has any adverse effect upon the system. It shall be the responsibility of the retiree to notify the system of these circumstances, to present satisfactory evidence of same, and to request the recomputation of benefits. Adjustment of benefits under this Subsection shall not be retroactive, and shall be effective on the first day of the next month following official approval of the application for recomputation of benefits.

D. No change in the option elected by the member, other than as provided by Subsection C of this Section, shall be permitted after the effective date of retirement.

E. A retiree cannot change the designation of beneficiary after the effective date of retirement unless the retirement was approved under Option 1, other than as provided by Subsection C of this Section.

F. Initial benefit option. (1) The initial benefit option provided in this Subsection is available to a member who has not participated in the Deferred Retirement Option Plan provided in this Chapter and who selects the maximum benefit provided in Subsection A(introductory paragraph) of this Section, or Option 2, 3, or 4 thereof and, if this initial benefit option is selected, the person shall thereafter be ineligible to participate in the Deferred Retirement Option Plan under this Chapter.

(2) If a member selects the initial benefit option provided in this Subsection, the member may receive an initial benefit plus a reduced monthly retirement allowance, provided the initial benefit together with the reduced monthly retirement allowance shall equal the actuarially equivalent amount of his maximum retirement allowance.

(3) The initial benefit, as determined by the member, shall not exceed an amount equal to thirty-six payments of the member's maximum retirement allowance.

(4) At the option of the member, the initial benefit shall be paid as a lump-sum payment or shall be placed in an account called an "initial benefit account", established in accordance with the same procedures set forth in R.S. 11:2221, with interest credited thereto and monthly payments made from the account in accordance therewith.

(5) The monthly retirement benefit received by the retiree and the beneficiary or survivor shall be based on the amount otherwise payable under the retirement option selected by the member, which shall be actuarially reduced by a prorated amount calculated to offset the cost of the initial benefit payment.

(6) If a change in option selection is allowed under the provisions of Subsection C of this Section, the monthly benefit payable under those provisions shall be actuarially reduced by a prorated amount calculated to offset the cost of the initial benefit payment.

(7) A person who retires under the provisions of disability retirement may not select the initial benefit option.

(8) Cost-of-living adjustments granted by the board of trustees to retirees who select the initial benefit option shall be computed on the basis of each retiree's regular monthly retirement benefit or on the basis of each beneficiary or survivor's benefit based on the option selected as reduced and shall not be computed on the initial benefit received either as a lump sum or paid pursuant to R.S. 11:2221.

Acts 1973, No. 189, §1; Acts 1979, No. 105, §1; Acts 1982, No. 271, §1; Redesignated from R.S. 33:2377 by Acts 1991, No. 74, §3, eff. June 25, 1991; Amended by Acts 1992, No. 550, §1, eff. July 1, 1992; Acts 1993, No. 312, §1, eff. June 3, 1993; Acts 1995, No. 1123, §1; Acts 1997, No. 106, §1; Acts 1999, No. 354, §1, eff. June 16, 1999.