§ 12 — Options on retirement

Section 12. (1)Election of Option.— Any member who is retired for superannuation under the provisions of section five or who applies for a retirement allowance under the provisions of section ten or subdivision (3) of section twenty-six, may elect to have his allowance paid in accordance with the terms of any one of the three options specified in subdivision (2) of this section. Any member who is retired for disability under section 6, or section 7 or who is retired under subdivision (2) of section 26, may elect to have his allowance paid in accordance with the terms of option (a), option (b) or option (c), provided, however, that, in the event that the surviving eligible beneficiary of a member under said option (c) is eligible for a benefit under section 9, the beneficiary shall elect to receive either a benefit pursuant to said option (c) or a benefit pursuant to said section 9 but in no event shall the beneficiary be eligible for both benefits; and provided further, that a full benefit provided under section 9 and a full benefit provided under option (c) shall not be paid to 2 different beneficiaries on account of 1 member. Election of an option shall be made by such member in writing on a prescribed form filed with the board, and once made may be changed from time to time by making a new election in a similar manner; provided, that no election of an option shall be valid unless such election is filed with the board on or before the date of receipt by the board of the written application for the retirement of such member or for a retirement allowance under the provisions of section ten, as the case may be, or unless such election is held with the board not more than fifteen days after the date of receipt by the board of the written application for the retirement of such member in case such application is made by the head of his department, or unless such election is filed with the board on or before the date his allowance becomes effective. Upon receipt of such election by the board, the option elected shall take effect as of the date the retirement allowance of such member becomes effective; provided, that if his death occurs before such date such option shall not take effect and his accumulated total deductions, if any, shall be returned as provided for in subdivision (2) of section eleven. If no election of an option is made or if none is in effect as provided for in this section, the retirement allowance of such member shall be paid in accordance with the terms of option (b) of subdivision (2) of this section.For any member who is married, an election shall not be valid unless it is accompanied by the signature of the member's spouse indicating the member's spouse's knowledge and understanding of the retirement option selected. The retirement board shall provide the member and spouse with detailed information regarding the benefit option selected in order for the member and spouse to make an informed decision regarding said option. If any member who is married files an election which is not so accompanied, the board shall within fifteen days notify the member's spouse by registered mail of the option election and of the spouse's right to sign and return an acknowledgment of receipt and understanding of such information within thirty days after receipt of the acknowledgment. The election shall not take effect until it is accompanied by the signature of the member's spouse; provided, however, that no such signature shall be required if the spouse fails to submit such signed acknowledgment on or before the thirtieth day from receipt of the information from the retirement board. Such election made prior to the spousal notification may be changed in accordance with the spouse's understanding of the retirement allowance selected, or at any later time otherwise permitted under this chapter. Nothing in this paragraph shall be deemed to affect the effective date of any retirement allowance. The provisions of this section relative to the retirement of the member's election being accompanied by the member's spouse shall not apply in the case of a member who is divorced and who has previously filed with the retirement board a domestic relations order which has been entered by the probate court and provides for the option to be elected by the member.(2)Terms of Options.— Any retirement allowance paid in accordance with the terms of any one of the three options specified in this subdivision shall be payable during the lifetime of the member to whom the allowance is granted and shall cease upon his death except as otherwise provided for in the option elected; provided, that the continuance of payments during the lifetime of such member and the amount thereof shall be subject to the provisions of sections eight, fourteen, fifteen and twenty-five.Option (a), Life Annuity.— A full retirement allowance payable to such member which shall consist of—(i) A regular life annuity, the yearly amount of which shall be determined so that the value of such annuity on the date such allowance becomes effective shall be the actuarial equivalent of the value of his accumulated regular deductions, if any, on such date;(ii) A pension, the yearly amount of which shall be equal to the excess of the normal yearly amount of the retirement allowance determined in accordance with the provisions of the section under which such allowance is being granted to such member over the yearly amount of the regular life annuity specified in clause (i) of this option; and(iii) An additional life annuity, the yearly amount of which shall be determined so that the value of such annuity on the date such allowance becomes effective shall be the actuarial equivalent of the value of his accumulated additional deductions, if any, on such date.Option (b), Cash Refund Annuity.— A lesser retirement allowance payable to such member which shall consist of—(i) A cash refund life annuity, the yearly amount of which shall be determined so that the value of such annuity on the date such allowance becomes effective shall be the actuarial equivalent of the value of his accumulated total deductions, if any, on such date. Such cash refund life annuity shall provide that, if such member dies before receiving in annuity payments a total amount equal to such value of such accumulated total deductions, the excess of such value over such total amount shall be paid in one sum in accordance with the provisions of subdivision (2) of section eleven to his surviving beneficiary or beneficiaries entitled thereto; and(ii) A pension, the yearly amount of which shall be equal to that specified in clause (ii) of option (a) of this subdivision.Option (c), Joint and Last Survivor Allowance.— A lesser retirement allowance which shall be payable to such member during his lifetime, with the provisions that two-thirds of the yearly amount of such lesser retirement allowance shall be continued during the lifetime of and paid to such surviving eligible beneficiary as such member shall have nominated in his written election of this option; provided, however, that such eligible beneficiary shall receive not less than two-thirds of the retirement allowance such member is receiving at the time of his death; and provided, further, that if such eligible beneficiary dies on or after the date such lesser retirement allowance becomes effective and before the death of such member, such member thereafter shall be paid a full retirement allowance and may not choose another option. Such full retirement allowance shall be determined by multiplying the amount of the lesser retirement allowance at the time of the death of such eligible beneficiary by a fraction the numerator of which is the yearly amount of the full retirement allowance which such member would have received at the time his retirement allowance became effective if he had elected that it be paid in accordance with the terms ofOption (a), and the denominator of which is the yearly amount of the lesser retirement allowance which such member received at the time his retirement allowance first became effective.If such beneficiary dies before the date such retirement allowance becomes effective, this option shall not take effect, and in such case such member, upon his written request on a prescribed form filed with the board prior to such effective date, may make a new election of any one of the first three options specified in this subdivision. The yearly amount of such lesser retirement allowance shall be determined so that the actuarial value of the prospective payments to such member, including those for a full retirement allowance made in accordance with the first paragraph of this option, and to such eligible beneficiary shall, on the date such allowance becomes effective, be the actuarial equivalent of the value on such date of the full retirement allowance specified inOption (a). Any such lesser retirement allowance payable under this option shall be divided between annuity and pension in the same proportion as the corresponding full retirement allowance specified in saidOption (a)is so divided, and any such full retirement allowance payable under this option shall be divided between annuity and pension in the same proportion as the lesser retirement allowance which it replaces.No person shall be eligible for nomination as beneficiary under this option unless such person is the spouse former spouse who has not remarried, child, father, mother, sister or brother of such member.If a spouse receiving an allowance as beneficiary under this option dies leaving any children of the deceased member and of such spouse who are under age eighteen, such amount as would have been paid to such spouse shall be divided into such number of equal shares as there are such children, and each such share shall be paid to a guardian for the benefit of each such child until the child reaches age eighteen.Option (d), Member Survivor Allowance.— At any time a member, upon his written notice on a prescribed form filed with the board prior to his death, may nominate an eligible beneficiary as set forth under option (c) of this section, who if such member dies before being retired shall receive the yearly amount of the option (c) allowance to which such member would have been entitled had his retirement taken place on the date of his death.If such member dies before attaining age 55 and before being retired, such nominated eligible beneficiary shall receive the Option (c) allowance to which such member would have been entitled had the member attained age 55 at the time of the member's death and had the member's retirement taken place on the date of the member's death. Notwithstanding the previous sentence, if a member of Group 1 who became such a member on or after April 2, 2012 dies before attaining age 60 and before being retired, such nominated eligible beneficiary shall receive the Option (c) allowance to which such member would have been entitled had the member attained age 60 at the time of the member's death and had the member's retirement taken place on the date of the member's death.A member may at any time cancel the appointment of a beneficiary nominated under this option by a written notice filed with the board prior to his death.If a member dies before being retired without an eligible beneficiary other than the spouse of such member nominated under this option, or, notwithstanding the provisions of paragraph (a) of subdivision (2) of section thirteen, if a member in service as described in subparagraph (i) of paragraph (a) of subdivision (1) of section three who has not less than two years of creditable service dies and leaves a spouse to whom such member had been married for not less than one year, or if a member dies within thirty days following the date the retirement of such member became effective without an eligible beneficiary nominated under Option (c) of this section, an election may be made by such spouse to receive the member-survivor allowance under this option; provided, that said spouse and the deceased member were living together at the time of death of such member, or that the board finds that they had been living apart for justifiable cause other than desertion or moral turpitude on the part of the spouse.If the spouse eligible to elect the member-survivor allowance provided for in this option fails, as provided for in this option, to elect said allowance, the accumulated total deductions of the member shall be paid to the surviving beneficiary or beneficiaries of record, if any, nominated under the provisions of paragraph (c) of subdivision (2) of section eleven, and if there is no such surviving beneficiary or beneficiaries of record said accumulated total deductions shall be paid to such spouse in one sum as a cash refund under subdivision (2) of said section eleven.Upon the receipt of the notice of death of any member, the board shall notify the spouse or the person who may act for a child or children as to what information must be furnished in order that the board may determine the eligibility of any person to receive benefits provided for the survivors of a deceased member; and, after it has received the necessary information, the board shall notify such spouse or such other person of the right of election, if any, provided by this option and of the approximate amount of the allowance which will be payable and of the payments due on account of a child or children, if any, provided by section 12B; and of the manner of settlement of the account of the member, including the amount of any cash refund that is payable if the spouse or person who may act for a child or children fails to elect to receive the member-survivor allowance provided herein, or the payments for a child or children provided under Section 12B.No election of the form of settlement permitted under this option shall be valid unless it is made on a prescribed form filed with the board within ninety days following the date that such notice regarding the right of election is mailed to the spouse.Any eligible beneficiary or spouse having a right under this option may, within ninety days from the date that the board mailed notice regarding the right of election to the spouse or eligible beneficiary, make any make-up payments which at the time of death the member had a right to make for the purpose of obtaining credit for service rendered by the member prior to his last becoming a member.If any such member as is described in this option dies as a result of a personal injury sustained or hazard undergone while in the performance of the duties of such member, with a resultant death benefit as provided for in section nine or section one hundred of chapter thirty-two, such sections shall govern.The normal monthly member-survivor allowance provided for under this option to a spouse of a deceased member shall not be less than $250 or $500 a month, whichever is applicable to such spouse, subject to the provisions of paragraph (e) of section one hundred and two; provided, however that the deceased member was a member in service as described in subparagraph (i) of paragraph (a) of subdivision (1) of section three on the date of death and that the member had not less than two full years of creditable service and had been married to such spouse for not less than one year; and provided, further, that such member and such spouse were living together on the date of death of the member, or that the board finds that they were living apart for justifiable cause other than desertion or moral turpitude on the part of such spouse.Beginning April 2, 2012, the normal monthly member-survivor allowance provided for under this option to a spouse of a deceased member shall not be less than $500 for members of the state teachers' and state employees' retirement system. This paragraph shall take effect for the members of a retirement system of any other political subdivision by a majority vote of the board of such system and by the local legislative body. For the purpose of this paragraph, a vote of the legislative body shall take place in the following manner: in a city, by a vote of the city council subject to its charter; in a town, by a vote at a town meeting; in a county, by a vote of the county retirement board advisory council; in a region, by a vote of the regional retirement board advisory council; in a district, by a vote of the district members; and for an authority, by a vote of its governing body. Acceptance shall be deemed to have occurred upon the filing of a certification of such vote with the commission.The total annual allowance derived from and payable under the provisions of this option, together with any allowance payable under the provisions of section twelve B, shall at no time be greater than the annual rate of regular compensation, payable to such member on the date of death of such member.(3)Notification by Board.— In case any member in service is to be retired at the maximum age for his group, the board shall notify the head of his department of such fact in writing not less than thirty days nor more than four months prior to the date such member will attain such maximum age. The board shall also so notify any member whose allowance is to become effective at the maximum age for his group of such fact and at the same time shall furnish him with a brief statement of the options available to him, together with a statement of the conditions under which an option may be elected.(4) Any person who retired under chapter 32 between July 1, 2004 and December 27, 2004, inclusive, or the surviving spouse of any such person who is deceased, who elected Option (a) or Option (b) of subdivision (2) may change such selection to Option (b) or Option (c) of said subdivision (2). In paying the retirement allowance under the new election, the board may make appropriate adjustments, or arrange for appropriate repayments, upon such terms and condition as the board may prescribe, so as to recover any overpayments resulting from the prior election; provided, however, that any lump sum distribution paid under Option (b) shall be repaid to the retirement system in 1 lump sum on terms and conditions as the board may prescribe. The change of election under this subdivision shall be made on or before July 1, 2006, and shall be retroactive to the date of retirement. The one time election to change retirement options under this subdivision shall be in a manner prescribed by the retirement board; provided, however, that the retirement board shall have 180 days after the submission of an application to change the retirement option filed under this subdivision to implement said change.