(a)(1) On or before the 15th day of the calendar month in which the first payment on account of a retirement allowance becomes normally due, but not later than the date on which the payment becomes normally due, each member shall elect to receive the member’s retirement allowance in accordance with one of the following forms of payment:
(A)Option 1. A retirement allowance payable during the member’s life computed pursuant to section 1937 or 1938 of this title, whichever is applicable.
(B)Option 2. 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 his or her accumulated contributions at the time of his or her retirement and the sum of the annuity payments actually made to him
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(a)(1) On or before the 15th day of the calendar month in which the first payment on account of a retirement allowance becomes normally due, but not later than the date on which the payment becomes normally due, each member shall elect to receive the member’s retirement allowance in accordance with one of the following forms of payment:
(A) Option 1. A retirement allowance payable during the member’s life computed pursuant to section 1937 or 1938 of this title, whichever is applicable.
(B) Option 2. 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 his or her accumulated contributions at the time of his or her retirement and the sum of the annuity payments actually made to him or her during his or her lifetime shall be paid to the person, if any, as he or she has nominated by written designation duly acknowledged and filed with the Board; or in the absence of a written designation of beneficiary, or in the event 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:
(i) In the case of an open estate, to the administrator or executor.
(ii) 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.
(iii) In the absence of an open estate or Probate Division of the Superior Court decree of distribution, and when 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. § 314.
(iv) 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.
(C) Option 3. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death at one-half the rate paid to him or her and be paid for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.
(D) Option 4. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death at three-fourths of the rate paid to him or her and be paid for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.
(E) Option 5. A reduced retirement allowance payable during the member’s life, with the provision that it shall continue after his or her death for the life of the beneficiary nominated by him or her by written designation duly acknowledged and filed with the Board at the time of retirement, should the beneficiary survive him or her.
(2) The benefits payable under options 2, 3, 4, and 5 shall be determined as actuarial equivalents of the retirement allowance under option 1. Any member who elects to receive a retirement allowance under the provisions of options 3, 4, or 5 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 his or her nominated beneficiary, the retirement allowance that would have been payable under option 1 shall be paid to the retired member during the remainder of his or her 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 under the provisions of option 1.
(b)(1) A retirement allowance shall be payable to the eligible surviving beneficiary, if any, following the death of a:
(A) Group A member who had attained age 60 or had completed 30 years of creditable service; or had not attained age 60 and had completed 10 years (but less than 30 years) of creditable service and was in service at the time of the member’s death.
(B) Group C member who had attained age 55 and completed five years of creditable service; or had not attained age 55 and completed 10 years of creditable service and was in service at the time of the member’s death.
(2) In order to be eligible to receive the retirement allowance, the surviving beneficiary must be nominated by the member by written designation duly acknowledged and filed with the Board, and if the beneficiary is other than the spouse of the member, the beneficiary must be dependent upon the member at the time of the member’s death, provided that no person entitled to a pension under subsection 1940(b) of this title may be eligible for a retirement allowance under this section. The Board shall from time to time adopt uniform rules for determining whether a designated beneficiary was dependent upon a member; if, in the judgment of the Board, a surviving beneficiary in receipt of a retirement allowance would have ceased to be dependent upon the member had the member survived, the Board may discontinue the retirement allowance payable to such surviving beneficiary. The retirement allowance payable to the surviving beneficiary shall be equal to the benefit that would have been payable had the member elected option 5 and retired on the member’s date of death, computed in the case of a member who has not attained normal retirement age on the basis of a disability retirement allowance or an early retirement allowance, as provided in subsection 1937(c) of this title; without regard to whether the member has completed the eligibility requirements for early retirement, whichever provides the greater benefit to the surviving beneficiary. Such retirement allowance to the surviving beneficiary shall be in lieu of the payment of the member’s accumulated contributions provided under subsection 1940(b) of this title; provided, however, that the surviving beneficiary may elect to receive payment of the member’s accumulated contributions in lieu of such retirement allowance or may elect to convert the retirement allowance otherwise payable to the member into an actuarial equivalent under the provisions of option 2 of this section. Failing an eligible surviving beneficiary, the member’s accumulated contributions shall be payable in accordance with the provisions of subsection 1940(b) of this title.
(c) [Repealed.] (Amended 1959, No. 182, § 1; 1967, No. 269 (Adj. Sess.), § 1, eff. July 1, 1967; 1973, No. 141 (Adj. Sess.), § 6; 1975, No. 175 (Adj. Sess.), § 1; 1981, No. 41, § 29; 1989, No. 169 (Adj. Sess.), § 6; 1999, No. 53, § 6; 2001, No. 29, § 5; 2007, No. 13, § 29; 2007, No. 137 (Adj. Sess.), § 5; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2015, No. 23, § 38; 2017, No. 165 (Adj. Sess.), § 14.)