Chapter 3307:1-5 Selection and Reselection of Plan of Payment

3307:1-5-01 Selection and reselection of plan of payment for retirees on or before September 1, 1989.

By authority of section 3307.04 and section 3307.60 of the Revised Code, the following rule shall apply to the plans of payment provided in section 3307.58 and 3307.60 of the Revised Code:

(A) The provisions for reselection of a plan of payment set forth in this paragraph shall be applicable to all service retirants granted retirement effective on or before September 1, 1989, except a retirant who elected recalculation of benefits pursuant to section three of Am. H.B. 293 of the 118th General Assembly or a retirant whose application is made on or after September 15, 1989 for retirement effective July 1, 1989 or thereafter, who meet the requirements set forth in division (F) or (G) of section 3307.60 of the Revised Code.

(1) Application for a change of plan of payment must be filed with the state teachers retirement system on a form approved by the retirement board. Payment under a reselected plan of payment shall be effective as follows:

(a) Death of a beneficiary -first of the month following death of beneficiary regardless of when the application is filed, provided such beneficiary was designated at the time of retirement. The reselection of a plan of payment shall be limited to the single lifetime benefit equivalent option, as stipulated in paragraph (A)(2) of this rule.

(b) Divorce, annulment or marriage dissolution — the later of the first of the month following date application is filed with the state teachers retirement system or the first of the month after the divorce, annulment or marriage dissolution, provided:

(i) The spouse was designated as beneficiary under the plan of payment selected at retirement; and

(ii) A spousal consent form provided by the retirement system or court order specifically authorizing the reselection of plan of payment on the basis of the marriage termination is filed with the retirement system; and

(iii) The reselection of a plan of payment shall be limited to the single lifetime benefit equivalent option, as stipulated in paragraph (A)(2) of this rule.

(c) Marriage or remarriage — the later of the first of the month following date of application on a form provided by the retirement system and a copy of the marriage certificate are filed with the state teachers retirement system office or the first of the month after the marriage or remarriage, provided the spouse is selected as beneficiary as set forth in division (A)(3) of section 3307.60 of the Revised Code and calculated as stipulated in paragraph (A)(3) of this rule.

(2) The single lifetime benefit equivalent to which a retirant may elect to return shall be the gross benefit that the retirant would currently be receiving had the retirant selected a single lifetime benefit at retirement.

(3) Option plans shall be based on the single lifetime benefit actuarially reduced based on the ages in effect when such plan is selected and the option factors in effect on the later of January 1, 1983, or the effective date of retirement. All previously granted cost of living adjustments and ad hoc increases shall also be reduced by such option factor.

Replaces: Part of 3307:1-5-01

Effective: 08/01/2005

R.C. 119.032 review dates: 05/01/2010

Promulgated Under: 111.15

Statutory Authority: 3307.04

Rule Amplifies: 3307.58, 3307.60

Prior Effective Dates: 12/23/1976, 10/2/78/ 9/15/89 (Emer.), 11/30/89, 10/29/98 (Emer.), 1/17/99, 7/1/2001 (Emer.), 9/17/01

3307:1-5-02 Selection and reselection of plan of payment for retirees on or after October 1, 1989.

By authority of sections 3307.04 and 3307.60 of the Revised Code, the following rule shall apply to the plans of payment provided in sections 3307.58, 3307.59 and 3307.60 of the Revised Code:

(A) The provisions for reselection of a plan of payment set forth in this paragraph shall be applicable to all service retirants granted retirement effective on or after October 1, 1989, or a retirant who elects recalculation of benefits pursuant to section three of Am. H.B. 293 of the 118th General Assembly, or a retirant whose application is made on or after September 15, 1989 for retirement effective July 1, 1989 or thereafter, and who meet the requirements set forth in division (A)(3) or (G) of section 3307.60 of the Revised Code.

(a) Death of a beneficiary – first of the month following death of beneficiary regardless of when the application is filed, provided such beneficiary was designated at the time of retirement. The reselection of a plan of payment shall be limited to the single lifetime benefit equivalent option, as stipulated in paragraph (A)(2) of this rule.

(b) Divorce, annulment or marriage dissolution – the later of the first of the month following date application is filed with the state teachers retirement system or the first of the month after the divorce, annulment or marriage dissolution, provided:

(i) The spouse was designated as beneficiary under the plan of payment selected at retirement; and

(iii) The reselection of a plan of payment shall be limited to the single lifetime benefit equivalent option, as stipulated in paragraph (A)(2) of this rule.

(c) Marriage or remarriage – the later of the first of the month following date of application on a form provided by the retirement system and a copy of the marriage certificate are filed with the state teachers retirement system office or the first of the month after the marriage or remarriage, provided the spouse is selected as beneficiary under division (A)(1), (A)(2), (A)(3) or (A)(5) of section 3307.60 of the Revised Code and calculated as stipulated in paragraph (A)(3) of this rule.

(d) For those retirants whose benefit is commenced under a single lifetime benefit in accordance with section 401(a)(9) of the Internal Revenue Code and the regulations thereunder, not later than one year after the effective date of the benefit described in this paragraph, a retirant who was married on the effective date of the benefit may elect a plan of payment under division (A)(1), (A)(2), (A)(3), or (A)(5) of section 3307.60 of the Revised Code and calculated as stipulated in paragraph (A)(3) of this rule provided the spouse is named as the beneficiary. The election shall be made on a form approved by the retirement system and shall be effective on the effective date of the benefit paid under a single life annuity. Any benefit overpayment may be recovered as provided in section 3307.47 of the Revised Code.

(2) The single lifetime benefit equivalent to which a retirant who elected a plan of payment under division (A)(3) of section 3307.60 of the Revised Code or a plan of payment consisting of both a lump sum payment under division (B)(1) of section 3307.60 of the Revised Code and a benefit payable to a beneficiary under division (A)(3) of section 3307.60 of the Revised Code may elect to return shall be the gross benefit that the retirant would currently be receiving had the retirant selected a single lifetime benefit at retirement less any reductions, if applicable, for a lump-sum payment made under division (B)(1) of section 3307.60 of the Revised Code.

(3) Optional plans of payment shall be based on the single lifetime benefit less any reductions, if applicable, for a lump-sum payment made under division (B)(1) of section 3307.60 of the Revised Code actuarially reduced based on the ages in effect when such plan is selected and the option factors in effect on the effective date of retirement. All previously granted cost of living adjustments and ad hoc increases shall also be reduced by such option factor.

(B) Pursuant to division (H)(1) of section 3307.60 of the Revised Code, a retirant married on the effective date of service retirement effective on or after October 1, 1989, a retirant married at the time of an election for recalculation of benefits pursuant to section three of Amended House Bill No. 293 of the 118th General Assembly, or a retirant who applies on or after September 15, 1989 for retirement effective July 1, 1989 or thereafter who is married at the time of such application, shall be deemed to have elected the plan of payment under option 2 as provided under division (A)(2) or (A)(3) of section 3307.60 of the Revised Code with half of the retirant’s benefit continuing for the lifetime of the spouse, unless:

(1) The applicant elects a plan of payment which provides more than fifty per cent of the benefit payable during the lifetime of the retirant will continue after the retirant’s death to the spouse.

(2) The spouse consents on a form provided by the state teachers retirement system to the retirant’s election of a single life annuity or payment pursuant to an optional plan under which, after the death of the retirant, the spouse will receive less than fifty per cent of the benefit payable during the lifetime of the retirant.

(3) The state teachers retirement board waives the deemed election of option 2 after receipt of one of the following:

(a) If the retirement system receives the written statement of a physician certifying that the spouse is medically incapable of acknowledging the plan of payment elected by the applicant, and receives consent by and through a duly appointed guardian, as specified by rule 3307-7-01 of the Administrative Code, or

(b) If the affidavits of the applicant and at least two other persons, one of whom must be unrelated to the applicant, are received attesting that the whereabouts of the spouse is unknown.

(1) The member is required to elect a plan of payment pursuant to a court order issued under section 3105.171 or 3105.65 of the Revised Code or the laws of another state regarding the division of marital property and the member designates the member’s current spouse as a beneficiary under that plan, or

(2) The amount specified pursuant to a court order or orders under section 3105.171 or 3105.65 of the Revised Code or the laws of another state regarding the division of marital property is the maximum amount payable to a joint and survivor beneficiary or beneficiaries.

(3) The state teachers retirement system is required to commence a benefit in accordance with section 401(a)(9) of the Internal Revenue Code and the regulations thereunder.

(D) A member’s current spouse must consent to the election of a plan of payment described in division (A)(4) of section 3307.60 of the Revised Code if either of the following apply:

(1) The member selects a plan of payment described in division (A)(4) of section 3307.60 of the Revised Code, but the member is not subject to a court order issued under section 3105.171 or 3105.65 of the Revised Code or the laws of another state regarding the division of marital property that requires the member to make such election;

(2) The member is ordered to designate a former spouse as beneficiary of a specified portion of the benefit, but also designates a beneficiary or beneficiaries other than the member’s current spouse under that plan of payment.

Effective: 07/16/2009

R.C. 119.032 review dates: 05/01/2010

Promulgated Under: 111.15

Statutory Authority: 3307.04

Rule Amplifies: 3307.58, 3307.59, 3307.60

Prior Effective Dates: 12/23/1976, 10/2/1978, 9/15/1989 (Emer), 11/30/1989, 10/29/1998 (Emer.), 1/17/1999, 7/1/01 (Emer.), 9/17/01, 8/1/05, 10/27/06, 1/22/09 (Emer)

3307:1-5-03 Court orders.

(A) All retirants subject to division (H)(1)(b) of section 3307.60 of the Revised Code shall indicate such requirement on their applications for service retirement benefits filed with the state teachers retirement system and shall provide a copy of the court order or court orders when making application for benefits pursuant to sections 3307.57, 3307.58 or 3307.59 of the Revised Code. Copies of court orders shall not be retained by the state teachers retirement system before an application for benefits is filed with the system.

(B) At any time, before or after monthly benefits begin, a former spouse may waive his or her rights to any part of a lump-sum payment paid before or after the member’s death or any portion of a continuing benefit payable after the retirant’s death as required by a court order issued under section 3105.171 or 3105.65 of the Revised Code or the laws of another state regarding division of marital property. Such waiver shall be effective upon receipt of a notarized statement prepared by the state teachers retirement system and signed by the affected former spouse. Such waiver shall be a full discharge and release to the board from any future claim for such payment.

(C) For purposes of determining the priority of court orders issued under section 3105.171 or 3105.65 of the Revised Code or the laws of another state regarding the division of marital property that require a member to elect the plan of payment set forth in division (A)(4) of section 3307.60 of the Revised Code and designate a former spouse as a beneficiary, the state teachers retirement system shall process such court orders in the order in which they were filed with the clerk of courts.

Effective: 10/27/2006

R.C. 119.032 review dates: 05/01/2010

Promulgated Under: 111.15

Statutory Authority: 3307.04

Rule Amplifies: 3307.60

3307:1-5-04 Amounts due and unpaid at death of benefit recipient.

(A) Amounts due to a retirant receiving retirement benefits under a plan described in division division (B) of section 3307.60 of the Revised Code and unpaid at death shall be paid to the retirant’s surviving beneficiary or beneficiaries under the plan on a prorated basis. The amount payable to each surviving beneficiary shall be determined by multiplying the amount due the retirant by a fraction whose numerator is the gross monthly amount the beneficiary will be paid and whose denominator is the total gross monthly amount all beneficiaries will be paid.

Effective: 10/27/2006

R.C. 119.032 review dates: 05/01/2010

Promulgated Under: 111.15

Statutory Authority: 3307.04

Rule Amplifies: 3307.60, 3307.562