Section 86.665

Title VII CITIES, TOWNS AND VILLAGES

Chapter 86

Effective - 28 Aug 2003, 2 histories, see footnote   (history) 

  86.665.  Lump-sum option plan distribution, procedure — void, when. — 1. Any member entitled to commence a pension under and pursuant to either section 86.650 or 86.660 may elect an optional distribution under the partial lump-sum option plan provided in this section if such member:

  (1) Notifies the retirement system in writing of such member's retirement date at least ninety days in advance thereof and requests an explanation of such member's rights under and pursuant to this section; and

  (2) Notifies the retirement system of the member's election hereunder at least thirty days in advance of the retirement date.

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Following receipt of an initial notice of a member's retirement date and request for an explanation hereunder, the retirement system shall, at least sixty days in advance of such retirement date, provide such member a written explanation of such member's rights under and pursuant to this section and an estimate of the amount by which such member's regular monthly base pension would be reduced in the event of the member's election of any of the options available to such member under and pursuant to this section.

  2. (1) A member entitled to make an election under and pursuant to this section may elect to receive a lump-sum distribution with such member's initial monthly pension payment under and pursuant to section 86.650 or 86.660, subject to all the terms of this section. The member may elect the amount of the member's lump-sum distribution from one, but not more than one, of the following options for which such member qualifies:

  (a) A member having one or more years of creditable service after such member's eligible retirement date may elect a lump-sum amount equal to twelve times the initial monthly base pension the member would receive if no election were made under and pursuant to this section;

  (b) A member having two or more years of creditable service after such member's eligible retirement date may elect a lump-sum amount equal to twenty-four times the initial monthly base pension the member would receive if no election were made under and pursuant to this section; or

  (c) A member having three or more years of creditable service after such member's eligible retirement date may elect a lump-sum amount equal to thirty-six times the initial monthly base pension the member would receive if no election were made under and pursuant to this section.

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For purposes of this section, "eligible retirement date" for a member shall mean the earliest date on which the member could elect to retire and be entitled to receive a pension under and pursuant to either section 86.650 or 86.660.

  (2) When a member makes an election to receive a lump-sum distribution under and pursuant to this section, the base pension that the member would have received in the absence of an election shall be reduced on an actuarially equivalent basis to reflect the payment of the lump-sum distribution, and the reduced base pension shall be the member's base pension thereafter for all purposes relating to base pension amounts under and pursuant to sections 86.600 to 86.790.

  (3) If a member electing a lump-sum distribution under and pursuant to this section has elected the optional annuity described in section 86.650, the calculation of such member's pension shall be made in the following order:

  (a) The amount of the member's normal pension under and pursuant to section 86.650 shall be reduced if applicable by any reductions required under and pursuant to section 86.660;

  (b) The amount of the normal pension as determined under and pursuant to paragraph (a) of this subdivision shall be reduced to the actuarially equivalent amount to produce the optional form of annuity described in subsection 2 of section 86.650;

  (c) The amount of reduced pension as determined under and pursuant to paragraph (b) of this subdivision shall be further reduced as required to produce an actuarially equivalent benefit in the form of the lump-sum distribution option elected under and pursuant to this section and a remaining monthly annuity which shall be paid on the basis that the annuity for the member's spouse if such spouse survives the member shall be the same amount as the annuity paid the member and shall be paid to such surviving spouse for the lifetime of such spouse without regard to remarriage.

  3. An election under and pursuant to this section to receive a lump- sum distribution and reduced monthly base pension shall be void if the member dies before retirement, and amounts due a surviving spouse or other beneficiary of the member shall be determined without regard to such election.

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(L. 2003 H.B. 152 & 180 merged with S.B. 212 & 220)