§ 468. Optional benefits

(a) Until the first payment on account of a retirement allowance becomes normally due, any member may elect to convert the retirement allowance otherwise payable to the member after retirement into a retirement allowance that is its actuarial equivalent, in accordance with one of the optional forms described in this section.

(1) Option 1. A reduced retirement allowance payable during the member's life, with the provision that at the member's death a lump sum equal in amount to the difference between the member's accumulated contributions at the time of retirement and the sum of the annuity payments actually made to the member during his or her lifetime shall be paid to such person, if any, as the member has nominated by written designation duly acknowledged and filed with the Retirement Board; or, in the absence of a written designation of beneficiary or when the designated beneficiary is deceased, the residual amount payable as a result of the death of the member after retirement shall be payable as follows

(2) [Deleted.]

(A) In the case of an open estate, to the administrator or executor.

(B) In the case of a closed estate and the deceased member's account is valued at less than $1,000.00, in accordance with the Probate Division of the Superior Court decree of distribution.

(C) In the absence of an open estate or Probate Division of the Superior Court decree of distribution, and the deceased member's account is valued at less than $1,000.00 to the surviving spouse of the deceased owner, or, if there is no surviving spouse, then to the next of kin according to 14 V.S.A. § 551.

(D) In all other cases, a probate estate shall be opened by the claimant, or other interested party, in order to determine the appropriate distribution of the proceeds of the deceased member's account. When an estate is opened solely to distribute the proceeds of a deceased member's account under this section, the Probate Division of the Superior Court may waive any filing fees; or

(3) Option 3. A reduced retirement allowance payable during the member's life, with the provision that it shall continue after the member's death for the life of the beneficiary nominated by the member by written designation duly acknowledged and filed with the Retirement Board at the time of retirement should such beneficiary survive the member; or

(4) Option 4. A reduced retirement allowance payable during the member's life, with the provision that it shall continue after the member's death at one-half the rate paid to the member and be paid for the life of the beneficiary nominated by the member by written designation duly acknowledged and filed with the Retirement Board at the time of retirement should such beneficiary survive the member.

(b) Any member who elects to receive a retirement allowance under the provisions of option 3 or 4 may elect to receive a benefit further reduced actuarially as prescribed by the Board with the added provision that on the basis of stipulations contained in a plan-approved domestic relations order or if the retired member survives the member's nominated beneficiary, the retirement allowance which would have been payable during the member's life computed pursuant to section 459, 460, or 461 of this title, whichever is applicable, shall be paid to the retired member during the remainder of the member's lifetime. If a member does not make an election as to the form of his or her retirement allowance, the member shall receive his or her retirement allowance computed pursuant to section 459, 460, or 461 of this title, whichever is applicable. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1999, No. 53, § 4; 2007, No. 13, § 7; 2009, No. 24, § 2; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)