§ 5-1-232. ROLLOVER AND DISTRIBUTION RULES.

(a)

(1)

In this section the following words have the meanings indicated.

(2)

"Direct rollover" means a payment by the retirement system to the eligible retirement plan specified by the distributee.

(3)

"Distributee" means a member or former member, the surviving spouse of a member or former member, or the former spouse of a member or former member, which former spouse is an alternate payee under a qualified domestic relations order as defined in § 414(p) of the Internal Revenue Code with respect to the interest of the payee.

(4)

"Eligible retirement plan" means any of the following types of plans that accept the distributee's eligible rollover distribution:

(i)

A qualified plan described in § 401(a) of the Internal Revenue Code;

(ii)

An annuity plan described in § 403(a) of the Internal Revenue Code; and

(iii)

An individual retirement account or individual retirement annuity described in § 408(a) or § 408(b) of the Internal Revenue Code;

(iv)

Effective January 1, 2002, an annuity contract described in § 403(b) of the Internal Revenue Code;

(v)

Effective January 1, 2002, an eligible plan under § 457(b) of the Internal Revenue Code that 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 that agrees to separately account for amounts transferred into such plan from the retirement system; and

(vi)

Effective January 1, 2008, a Roth IRA described in § 408A of the Internal Revenue Code.

(5)

(i)

"Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee.

(ii)

"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 ten (10) years or more;

2.

Any distribution to the extent that such distribution is required under § 401(a)(9) of the Internal Revenue Code;

3.

After tax amounts unless such amount is rolled over or transferred (i.e., directly rolled) to an individual retirement account or individual retirement annuity described in § 408(a) or § 408(b) of the Internal Revenue Code, transferred to a defined contribution plan qualified under § 401(a) of the Internal Revenue Code or, effective for distributions made on or after January 1, 2007, to any qualified plan described in § 401(a) of the Internal Revenue Code or to an annuity plan described in § 403(b) of the Internal Revenue Code, provided any such plan described in this item agrees to separately account for such after-tax amount and earnings thereon; and

4.

Effective on or after January 1, 2002, any in-service withdrawal that is made on account of hardship.

(b)

Effective for distributions made on or after January 1, 1993, and notwithstanding any provision of this title to the contrary that would otherwise limit a distributee's election under this title, 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.

(c)

Notwithstanding any provision of this title to the contrary, effective January 1, 2010, a non-spouse beneficiary of a deceased member may elect, at the time and in the manner prescribed by the Board of Trustees, to directly roll over any portion of a distribution that would constitute an eligible rollover distribution if it were made to a member, surviving spouse, or alternate payee, provided such direct rollover is made to an individual retirement account described in § 408(a) of the Internal Revenue Code, an individual retirement annuity described in § 408(b) of the Internal Revenue Code, or a Roth IRA described in § 408A of the Internal Revenue Code that is established on behalf of the non-spouse beneficiary and that will be treated as an inherited IRA in accordance with the provisions of § 408(d)(3)(C) of the Internal Revenue Code.

(d)

Notwithstanding any other provision of this title, all distributions from the retirement system shall be made in accordance with Board of Trustees' good faith interpretation of the provisions of § 401(a)(9) of the Internal Revenue Code and such good faith interpretation shall override any provision of this title that is inconsistent with such interpretation.

(Bill No. 30-10, § 5, 7-1-2010; Bill No. 36-18 , § 1, 7-1-2018)