1| SENATE FLOOR VERSION |
| March 1, 2023 |
2| |
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3|COMMITTEE SUBSTITUTE |
|FOR |
4|SENATE BILL NO. 634 By: Montgomery |
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5| |
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6| |
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7| [ Teachers' Retirement System of Oklahoma - |
| retirement benefits - forms - payment - benefit |
8| amount - effective date ] |
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9| |
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10|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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11| SECTION 1. AMENDATORY 70 O.S. 2021, Section 17-105, is |
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12|amended to read as follows: |
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13| Section 17-105. (1) (a) Any member who has attained age |
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14|fifty-five (55) or who has completed thirty (30) years of creditable |
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15|service, as defined in Section 17-101 of this title, or for any |
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16|person who initially became a member prior to July 1, 1992, |
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17|regardless of whether there were breaks in service after July 1, |
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18|1992, whose age and number of years of creditable service total |
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19|eighty (80) may be retired upon proper application for retirement on |
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20|forms established by the Teachers' Retirement System of Oklahoma and |
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21|executing a retirement contract. Such a retirement date will also |
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22|apply to any person who became a member of the sending system as |
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23|defined in this act Section 17-101 et seq. of this title, prior to |
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24|July 1, 1992, regardless of whether there were breaks in service |
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1|after July 1, 1992. Any person who became a member after June 30, |
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2|1992, but prior to November 1, 2011, whose age and number of years |
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3|of creditable service total ninety (90) may be retired upon proper |
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4|application for retirement and executing a retirement contract. Any |
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5|person who becomes a member on or after November 1, 2011, who |
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6|attains the age of sixty-five (65) years or who reaches a normal |
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7|retirement date pursuant to subparagraph (d) of paragraph (24) of |
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8|Section 17-101 of this title having attained a minimum age of sixty |
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9|(60) years may be retired upon proper application for retirement and |
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10|executing a retirement contract. The application shall be filed on |
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11|the form provided by the Board of Trustees for this purpose, not |
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12|less than sixty (60) days before the date of retirement, provided |
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13|that the Executive Director may waive the sixty-day deadline for |
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14|good cause shown as defined by the Board. |
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15| 1. The employer shall provide the System with the |
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16| following information for a retiring member, no later |
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17| than the fifteenth day of the month of retirement: |
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18| last day physically on the job; last day on payroll; |
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19| any regular compensation not already reported to the |
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20| System; and final unused sick leave balance. |
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21| 2. Failure to submit this information by the deadline, |
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22| or errors in submitted information that result in a |
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23| disqualification of retirement eligibility shall be |
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24| the responsibility of the employer. In cases where |
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1| the error results in disqualification of retirement |
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2| eligibility, it is the employer's responsibility to |
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3| reemploy the member, or retain the member on the |
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4| payroll, for the time period required to reach |
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5| eligibility, not exceeding two (2) months. |
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6| (b) An individual who becomes a member of the Teachers' |
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7|Retirement System on or after November 1, 2017, shall be employed by |
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8|the public schools, state colleges or universities of Oklahoma for a |
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9|minimum of seven (7) years and be a contributing member of the |
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10|Teachers' Retirement System of Oklahoma for a minimum of seven (7) |
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11|years to qualify for monthly retirement benefits from the Teachers' |
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12|Retirement System of Oklahoma. |
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13| (c) Any member with seven (7) or more years of Oklahoma |
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14|teaching service and whose accumulated contributions during such |
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15|period have not been withdrawn shall be given an indefinite |
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16|extension of membership beginning with the sixth year following his |
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17|or her last contributing membership and shall become eligible to |
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18|apply for retirement and be retired upon attaining age fifty-five |
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19|(55). |
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20| (2) An unclassified optional member who has retired or who |
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21|retires at sixty-two (62) years of age or older or whose retirement |
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22|is because of disability shall have his or her minimum retirement |
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23|benefits calculated on an average salary of Five Thousand Three |
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24|Hundred Fifty Dollars ($5,350.00) or, if a larger monthly allowance |
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arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 3
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1|would result, an amount arrived at pursuant to application of the |
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2|formula prescribed herein. |
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3| (3) No member shall receive a lesser retirement benefit than he |
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4|or she would have received under the law in effect at the time he or |
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5|she retired. Any individual under the Teachers' Retirement System, |
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6|who through error in stating the title of the position which he or |
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7|she held, may, at the discretion of the Board of Trustees, be |
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8|changed from the nonclassified optional group to the classified |
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9|group for the purpose of calculating retirement benefits. |
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10| Any individual regardless of residence, who has a minimum of ten |
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11|(10) years of teaching in Oklahoma schools prior to July 1, 1943, or |
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12|who taught in Oklahoma schools prior to 1934 and thereafter taught a |
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13|minimum of ten (10) years and who does not qualify under the present |
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14|retirement System system, or who has a minimum of thirty (30) years |
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15|of teaching in Oklahoma schools and has reached seventy (70) years |
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16|of age prior to July 1, 1984, and is not otherwise eligible to |
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17|receive any benefits from the retirement system shall receive a |
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18|minimum of One Hundred Fifty Dollars ($150.00) per month in |
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19|retirement benefits from the Teachers' Retirement System of Oklahoma |
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20|plus any general increase in benefits for annuitants as may be |
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21|provided hereafter by the Legislature. Each individual must apply |
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22|to the Teachers' Retirement System for such benefit and provide |
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23|evidence to the Teachers' Retirement System that the service was |
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24|actually rendered. The surviving spouse of any person who made |
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1|application for the benefit provided for by this paragraph during |
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2|his or her lifetime but did not receive the benefit may submit an |
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3|application to the System for payment of the benefit for those |
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4|months during the lifetime of the deceased person that he or she was |
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5|eligible for but did not receive the benefit. Upon approval of the |
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6|application by the Board of Trustees, the benefit shall be paid to |
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7|the surviving spouse in one lump sum. |
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8| (4) The value of each year of prior service is the total |
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9|monthly retirement benefit divided by the number of years of |
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10|creditable service. |
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11| (5) Upon application of a member who is actively engaged in |
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12|teaching in Oklahoma or his or her employer, any member who has been |
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13|a contributing member for ten (10) years may be retired by the |
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14|System subsequent to the execution and filing thereof, on a |
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15|disability retirement allowance, provided that it is found by the |
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16|Medical Board after medical examination of such member by a duly |
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17|qualified physician that such member is mentally or physically |
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18|incapacitated for further performance of duty, that such incapacity |
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19|is likely to be permanent, and that such member should be retired. |
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20|The System shall rely on and give full consideration to the |
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21|conclusions and recommendations in the certified written report of |
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22|the Medical Board of the Teachers' Retirement System regarding the |
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23|disability application of such member. If the Medical Board does |
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24|not find that a member applying for disability retirement is |
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1|mentally or physically incapacitated for performance of duty or |
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2|otherwise eligible for a disability retirement, the application |
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3|shall then be considered by the Board of Trustees. If a member is |
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4|determined to be eligible for disability benefits pursuant to the |
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5|Social Security System system, then such determination shall entitle |
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6|the member to the authorized disability retirement allowance |
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7|provided by law. For members who are not eligible for disability |
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8|benefits pursuant to the Social Security System system, the Board of |
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9|Trustees and the Medical Board shall apply the same standard for |
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10|which provision is made in the first two sentences of this |
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11|subsection for determining the eligibility of a person for such |
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12|disability benefits in making a determination of eligibility for |
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13|disability benefits as authorized by this subsection. |
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14| (6) (a) A member who at the time of retirement has been found |
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15|to be permanently physically or mentally incapacitated to perform |
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16|the necessary duties to continue in his or her current position |
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17|shall receive a minimum monthly retirement payment for life or until |
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18|such time as the member may be found to be recovered to the point |
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19|where he or she may return to teaching. Any member retired before |
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20|July 1, 1992, shall be eligible to receive the monthly retirement |
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21|allowance herein provided, but such payment shall not begin until |
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22|the first payment due him or her after July 1, 1992, and shall not |
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23|be retroactive. The Board of Trustees is empowered to make such |
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24|rules and regulations as it considers proper to preserve equity in |
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1|retirements under this provision, which shall include a provision to |
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2|protect the rights of the member's spouse. |
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3| (b) A member who has qualified for retirement benefits under |
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4|disability retirement shall have the total monthly payment deducted |
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5|from his or her accumulated contributions plus interest earned and |
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6|any money remaining in the member's account after the above |
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7|deductions at the death of the member shall be paid in a lump sum to |
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8|the beneficiary or to the estate of the member. Provided, if the |
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9|deceased disabled member had thirty (30) years or more of creditable |
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10|service and the death occurred after June 30, 1981, and death |
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11|occurred prior to the disabled member receiving twelve monthly |
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12|retirement payments, a surviving spouse may elect to receive the |
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13|retirement benefit to which the deceased member would have been |
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14|entitled at the time of death under the Option 2 Plan of Retirement |
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15|provided for in subsection (8) of this section in lieu of the death |
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16|benefit provided for in this subsection and in subsection (12) of |
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17|this section. |
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18| (c) Once each year the System may require any disabled |
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19|annuitant who has not yet attained the age of sixty (60) years to |
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20|undergo a medical examination, such examination to be made at the |
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21|place of residence for the disabled annuitant or other place |
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22|mutually agreed upon by a physician or physicians designated by the |
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23|System. Should any disabled annuitant who has not yet attained the |
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24|age of sixty (60) years refuse to submit to at least one medical |
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1|examination in any such year by a physician or physicians designated |
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2|by the System his or her allowance may be discontinued until he or |
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3|she submits to such examination. |
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4| (d) Should the Medical Board report and certify to the Board of |
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5|Trustees that such disabled annuitant is engaged in or is able to |
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6|engage in a gainful occupation paying more than the difference |
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7|between his or her retirement allowance and the average final |
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8|compensation, and should the Board of Trustees concur in such report |
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9|then the amount of his or her pension shall be reduced to an amount |
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10|which, together with his or her retirement allowance and that amount |
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11|earnable by him or her, shall equal the amount of his or her average |
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12|final compensation. Should his or her earning capacity be later |
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13|increased, the amount of his or her pension may be further modified, |
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14|provided the new pension shall not exceed that amount of the pension |
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15|originally granted nor an amount, which when added to the amount |
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16|earnable by the member, together with his or her annuity, equals the |
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17|amount of his or her average final compensation. |
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18| (e) Should a disabled annuitant be restored to active service, |
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19|his or her disability retirement allowance shall cease and he or she |
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20|shall again become a member of the Teachers' Retirement System and |
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21|shall make regular contributions as required under this article. |
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22|The unused portion of his or her accumulated contributions shall be |
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23|reestablished to his or her credit in the Teachers' Savings Fund. |
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24|Any such prior service certificates on the basis of which his or her |
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1|service was computed at the time of his or her retirement shall be |
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2|restored to full force and effect. |
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3| (7) Should a member before retirement under Section 1-101 et |
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4|seq. of this title make application for withdrawal duly filed with |
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5|the System, not earlier than four (4) months after the date of |
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6|termination of such service as a teacher, the contribution standing |
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7|to the credit of his or her individual account in the Teachers' |
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8|Savings Fund shall be paid to him or her or, in the event of his or |
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9|her death before retirement, shall be paid to such person or persons |
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10|as he or she shall have nominated by written designation, duly |
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11|executed and filed with the System; provided, however, if there be |
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12|no designated beneficiary surviving upon such death, such |
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13|contributions shall be paid to his or her administrators, executors, |
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14|or assigns, together with interest as hereinafter provided. |
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15| In lieu of a lump-sum settlement at the death of the member, the |
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16|amount of money the member has on deposit in the Teachers' Savings |
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17|Fund and the money the member has on deposit in the Teachers' |
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18|Deposit Fund may be paid in monthly payments to a designated |
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19|beneficiary, who must be the spouse, under the Maximum or Option 1 |
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20|Plan of Retirement providing the monthly payment shall be not less |
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21|than Twenty-five Dollars ($25.00) per month. The monthly payment |
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22|shall be the actuarial equivalent of the amount becoming due at the |
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23|member's death based on the sex of the spouse and the age the spouse |
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24|has attained at the last birthday prior to the member's death. |
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1|Provided further, if there be no designated beneficiary surviving |
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2|upon such death, and the contributions standing to the credit of |
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3|such member do not exceed Two Hundred Dollars ($200.00), no part of |
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4|such contributions shall be subject to the payment of any expense of |
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5|the last illness or funeral of the deceased member or any expense of |
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6|administration of the estate of such deceased and the System, upon |
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7|satisfactory proof of the death of such member and of the name or |
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8|names of the person or persons who would be entitled to receive such |
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9|contributions under the laws of descent and distribution of the |
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10|state, may authorize the payment of accumulated contributions to |
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11|such person or persons. A member terminating his or her membership |
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12|by withdrawal after June 30, 2003, shall have the interest computed |
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13|at a rate of interest determined by the Board of Trustees and paid |
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14|to him or her subject to the following schedule: |
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15| (a) If termination occurs within sixteen (16) years from the |
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16|date membership began, fifty percent (50%) of such interest |
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17|accumulations shall be paid. |
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18| (b) With at least sixteen (16) but less than twenty-one (21) |
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19|years of membership, sixty percent (60%) of such interest |
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20|accumulations shall be paid. |
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21| (c) With at least twenty-one (21) but less than twenty-six (26) |
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22|years of membership, seventy-five percent (75%) of such interest |
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23|accumulations shall be paid. |
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24| |
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1| (d) With at least twenty-six (26) years of membership, ninety |
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2|percent (90%) of such interest accumulations shall be paid. |
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3| In case of death of an active member, the interest shall be |
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4|calculated and restored to the member's account and paid to his or |
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5|her beneficiary. |
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6| (8) (a) In lieu of his or her retirement allowance payable |
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7|throughout life for such an amount as determined under this section, |
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8|the member may select a retirement allowance for a reduced amount |
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9|payable under any of the following options the present value of |
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10|which is the actuarial equivalent thereof. |
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11| (b) A member may select the option under which he or she |
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12|desires to retire at the end of the school year in which he or she |
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13|attains age seventy (70) and the option shall be binding and cannot |
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14|be changed. Provided further that if a member retires before age |
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15|seventy (70), no election of an option shall be effective in case an |
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16|annuitant dies before the first payment due under such option has |
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17|been received. |
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18| (c) The first payment of any benefit selected shall be made on |
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19|the first day of the month following approval of the retirement by |
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20|the System. If the named designated joint annuitant under Option 2 |
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21|or 3 Plan of Retirement dies at any time after the member's |
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22|retirement date, but before the death of the member, the member |
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23|shall return to the retirement benefit, including any post |
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24|retirement postretirement benefit increases the member would have |
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1|received had the member not selected Option 2 or 3 Plan of |
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2|Retirement of this subsection. The benefit shall be determined at |
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3|the date of death of the designated joint annuitant. This increase |
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4|shall become effective the first day of the month following the date |
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5|of death of the designated joint annuitant, and shall be payable for |
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6|the member's remaining lifetime. The member shall notify the |
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7|Teachers' Retirement System of Oklahoma of the death of the |
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8|designated joint annuitant in writing. In the absence of the |
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9|written notice being filed by the member notifying the Teachers' |
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10|Retirement System of Oklahoma of the death of the designated joint |
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11|annuitant within six (6) months of the date of death, nothing in |
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12|this subsection shall require the Teachers' Retirement System of |
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13|Oklahoma to pay more than six (6) months of retrospective benefits |
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14|increase. |
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15| Option 1. If he or she dies before he or she has received in |
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16|annuity payments the present value of his or her annuity as it was |
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17|at the time of his or her retirement, the balance shall be paid to |
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18|his or her legal representatives or to such person as he or she |
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19|shall nominate by written designation duly acknowledged and filed |
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20|with the System at the time of his or her retirement; or |
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21| Option 2. A member takes a reduced retirement allowance for |
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22|life. Upon the death of the member the payments shall continue to |
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23|the member's designated joint annuitant for the life of the joint |
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24|annuitant. The written designation of the joint annuitant must be |
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1|duly acknowledged and filed with the System at the time of the |
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2|member's retirement and, except as provided in paragraph (e) of this |
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3|subsection, cannot be changed after the effective date of the |
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4|member's retirement; or |
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5| Option 3. A member receives a reduced retirement allowance for |
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6|life. Upon the death of the member one-half (1/2) of the retirement |
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7|allowance paid the member shall be continued throughout the life of |
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8|the designated joint annuitant. A written designation of a joint |
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9|annuitant must be duly acknowledged and filed with the System at the |
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10|time of the member's retirement and, except as provided in paragraph |
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11|(e) of this subsection, cannot be changed after the effective date |
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12|of the member's retirement; or |
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13| Option 4. Some other benefit or benefits shall be paid either |
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14|to the member or to such joint annuitant as he or she shall |
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15|nominate, provided such other benefit or benefits, together with the |
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16|reduced retirement allowance, shall be certified by the actuary to |
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17|be of equivalent actuarial value to his or her retirement allowance |
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18|and shall be approved by the System. |
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19| (d) Provided that Option 2 Plan of Retirement and Option 3 Plan |
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20|of Retirement shall not be available if the member's expected |
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21|benefit is less than fifty percent (50%) of the lump-sum actuarial |
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22|equivalent and the designated joint annuitant is not the spouse of |
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23|the member. |
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24| |
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1| (e) A member who chose the maximum retirement benefit plan at |
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2|the time of retirement may make a one-time election to choose either |
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3|Option 2 or 3 Plan of Retirement and name the member's spouse as |
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4|designated joint annuitant if the member marries after making the |
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5|initial election. Such an election shall be made within one (1) |
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6|year of the date of marriage. The member shall provide proof of a |
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7|member's good health before the System will permit a change to |
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8|either Option 2 or 3 Plan of Retirement and the naming of a |
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9|designated joint annuitant. A medical examination conducted by a |
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10|licensed physician is required for purposes of determining good |
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11|health. Such examination must be approved by the Medical Board. |
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12|The member shall be required to provide proof of age for the new |
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13|joint annuitant. The System shall adjust the monthly benefit to the |
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14|actuarially equivalent amount based on the new designated joint |
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15|annuitant's age. The Board of Trustees shall promulgate rules to |
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16|implement the provisions of this subsection. |
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17| (f) A member who retires after the effective date of this act |
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18|July 1, 2010, and has selected a retirement allowance for a reduced |
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19|amount payable under one of the options provided for in this |
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20|subsection may make a one-time irrevocable election to select a |
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21|different option within sixty (60) days of the member's retirement |
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22|date. The beneficiary or joint annuitant designated by the member |
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23|at the time of retirement shall not be changed if the member makes |
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24|the election provided for in this paragraph. |
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1| (g) Any individual who is eligible to be a beneficiary or joint |
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2|annuitant of a member under this subsection, and who is also a |
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3|beneficiary of a trust created under the Oklahoma Discretionary and |
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4|Special Needs Trust Act, Section 175.81 et seq. of Title 60 of the |
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5|Oklahoma Statutes, or a comparable Trust Act created under the laws |
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6|of another state, hereinafter collectively referred to as "Trust |
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7|Acts", may be a beneficiary or joint annuitant under this subsection |
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8|by having the trustee of the trust established for the benefit of |
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9|that individual named as the legal beneficiary or joint annuitant |
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10|under this subsection. The age of that beneficiary shall be used |
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11|for calculating any benefit payable to the trust under this |
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12|subsection. The beneficiary of such a trust shall be treated as the |
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13|beneficiary or joint annuitant under this subsection except that |
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14|payments of any benefits due under this subsection shall be payable |
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15|to the lawfully appointed trustee of the trust. The obligation of |
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16|the System to pay the beneficiary or joint annuitant under this |
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17|subsection shall be satisfied by payment to the trustee whom the |
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18|System, in good faith, believes to be the lawfully appointed |
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19|trustee. Any conflict between the statutes creating and governing |
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20|the Teachers' Retirement System in Section 17-101 et seq. of this |
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21|title and the provisions of any Trust Act referred to above shall be |
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22|resolved in favor of the statutes governing the System. If an |
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23|eligible beneficiary or joint annuitant is named at the time of |
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24|retirement, and becomes a beneficiary of a trust under one of the |
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1|Trust Acts described herein after that time, the System will |
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2|acknowledge the trust as the beneficiary upon the submission of |
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3|adequate documentation of the existence of the trust. All other |
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4|provisions of this subsection shall apply to these subsequently |
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5|created trusts. |
| |
6| (h) The Board of Trustees of the System may recognize other |
| |
7|trusts set up for the benefit of individuals otherwise eligible to |
| |
8|be named as a beneficiary or joint annuitant under this subsection |
| |
9|by administrative rule if it can be done without undue additional |
| |
10|administrative expense of the System. |
| |
11| (9) The governing board of any "public school", as that term is |
| |
12|defined in Section 17-101 of this title, is hereby authorized and |
| |
13|empowered to pay additional retirement allowances or compensation to |
| |
14|any person who was in the employ of such public school for not less |
| |
15|than seven (7) school years preceding the date of his or her |
| |
16|retirement. Payments so made shall be a proper charge against the |
| |
17|current appropriation or appropriations of any such public school |
| |
18|for salaries for the fiscal year in which such payments are made. |
| |
19|Such payments shall be made in regular monthly installments in such |
| |
20|amounts as the governing board of any such public school, in its |
| |
21|judgment, shall determine to be reasonable and appropriate in view |
| |
22|of the length and type of service rendered by any such person to |
| |
23|such public school by which such person was employed at the time of |
| |
24|retirement. All such additional payments shall be uniform, based |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 16
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1|upon the length of service and the type of services performed, to |
| |
2|persons formerly employed by such public school who have retired or |
| |
3|been retired in accordance with the provisions of Section 17-101 et |
| |
4|seq. of this title. |
| |
5| The governing board of any such public school may adopt rules |
| |
6|and regulations of general application outlining the terms and |
| |
7|conditions under which such additional retirement benefits shall be |
| |
8|paid, and all decisions of such board shall be final. |
| |
9| (10) In addition to the teachers' retirement herein provided, |
| |
10|teachers may voluntarily avail themselves of the Federal federal |
| |
11|Social Security Program program upon a district basis. |
| |
12| (11) Upon the death of an in-service member, the System shall |
| |
13|pay to the designated beneficiary of the member or, if there is no |
| |
14|designated beneficiary or if the designated beneficiary predeceases |
| |
15|the member, to the estate of the member, the sum of Eighteen |
| |
16|Thousand Dollars ($18,000.00) as a death benefit. Provided, if the |
| |
17|deceased member had ten (10) years or more of creditable service, |
| |
18|the member's designated beneficiary may elect to receive the |
| |
19|retirement benefit to which the deceased member would have been |
| |
20|entitled at the time of death under the Option 2 plan of retirement |
| |
21|Plan of Retirement in lieu of the death benefit provided for in this |
| |
22|subsection. Provided further, the option provided in this |
| |
23|subsection is only available when the member has designated one |
| |
24|individual as the designated beneficiary. The beneficiary or |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 17
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1|beneficiaries of death benefits in the amount not to exceed Eighteen |
| |
2|Thousand Dollars ($18,000.00), but exclusive of any retirement |
| |
3|benefit received by an electing beneficiary based upon creditable |
| |
4|service performed by the deceased member, which are provided |
| |
5|pursuant to this subsection may elect to disclaim such death |
| |
6|benefits in which case such benefits will be transferred to a person |
| |
7|licensed as a funeral director or to a lawfully recognized business |
| |
8|entity licensed as required by law to provide funeral services for |
| |
9|the deceased member. The qualified disclaimer must be in writing |
| |
10|and will be an irrevocable and an unqualified refusal to accept all |
| |
11|or a portion of the death benefit. It must shall be received by the |
| |
12|transferor no more than nine (9) months one (1) month after the |
| |
13|later of the day the transfer creating the interest in the |
| |
14|disclaiming person is made or the day the disclaiming person attains |
| |
15|age twenty-one (21). The interest in the death benefits must pass |
| |
16|without direction by the disclaiming person to another person. |
| |
17|Death benefits under this subsection shall be paid to the |
| |
18|beneficiary or beneficiaries of the deceased member not later than |
| |
19|one (1) month from the date of receipt of the death certificate |
| |
20|certifying the member's death. Upon notice of the death of a |
| |
21|member, the System shall send any required forms or applications |
| |
22|necessary for payment of the death benefit not later than one (1) |
| |
23|week from the date of the member's death, and all forms and |
| |
24|applications shall be available on a publicly accessible website. |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 18
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1| (12) Upon the death of a retired member who has contributed to |
| |
2|the System, the retirement system shall pay to the designated |
| |
3|beneficiary of the member or, if there is no designated beneficiary |
| |
4|or if the designated beneficiary predeceases the member, to the |
| |
5|estate of the member, the sum of Five Thousand Dollars ($5,000.00) |
| |
6|as a death benefit. The beneficiary or beneficiaries of benefits |
| |
7|provided pursuant to this subsection may elect to disclaim such |
| |
8|death benefits in which case such benefits will be transferred to a |
| |
9|person licensed as a funeral director or to a lawfully recognized |
| |
10|business entity licensed as required by law to provide funeral |
| |
11|services for the deceased member. The qualified disclaimer must be |
| |
12|in writing and will be an irrevocable and an unqualified refusal to |
| |
13|accept all or a portion of the death benefit. It must shall be |
| |
14|received by the transferor no more than nine (9) months one (1) |
| |
15|month after the later of the day the transfer creating the interest |
| |
16|in the disclaiming person is made or the day the disclaiming person |
| |
17|attains age twenty-one (21). The interest in the death benefits |
| |
18|must pass without direction by the disclaiming person to another |
| |
19|person. All death benefits under this subsection shall be paid to |
| |
20|the beneficiary or beneficiaries of the deceased member not later |
| |
21|than one (1) month from the date of the member's death. Upon |
| |
22|receipt of a certified death certificate certifying the death of a |
| |
23|member, the System shall send any forms or applications necessary |
| |
24|for payment of the death benefit not later than one (1) week from |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 19
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1|the date of receipt of the certified death certificate, and all |
| |
2|required forms and applications shall be available on a publicly |
| |
3|accessible website. The benefit payable pursuant to this subsection |
| |
4|shall be deemed, for purposes of federal income taxation, as life |
| |
5|insurance proceeds and not as a death benefit if the Internal |
| |
6|Revenue Service approves this provision pursuant to a private letter |
| |
7|ruling request which shall be submitted by the Board of Trustees of |
| |
8|the System for that purpose. |
| |
9| (13) Upon the death of a member who dies leaving no living |
| |
10|beneficiary or having designated his or her estate as beneficiary, |
| |
11|the System may pay any applicable death benefit, unpaid |
| |
12|contributions, or unpaid benefit which may be subject to probate, in |
| |
13|an amount of Twenty-five Thousand Dollars ($25,000.00) or less, |
| |
14|without the intervention of the probate court or probate procedure |
| |
15|pursuant to Section 1 et seq. of Title 58 of the Oklahoma Statutes. |
| |
16| (a) Before any applicable probate procedure may be waived, the |
| |
17|System must be in receipt of the member's proof of death and the |
| |
18|following documents from those persons claiming to be the legal |
| |
19|heirs of the deceased member: |
| |
20| 1. The member's valid last will and testament, trust |
| |
21| documents or affidavit that a will does not exist; |
| |
22| 2. An affidavit or affidavits of heirship which must |
| |
23| state: |
| |
24| |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 20
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1| a. the names and signatures of all claiming heirs to |
| |
2| the deceased member's estate including the |
| |
3| claiming heirs' names, relationship to the |
| |
4| deceased, current addresses, tax I.D. numbers if |
| |
5| known and current telephone numbers, |
| |
6| b. a statement or statements by the claiming heirs |
| |
7| that no application or petition for the |
| |
8| appointment of a personal representative is |
| |
9| pending or has been granted in any jurisdiction, |
| |
10| c. a description of the personal property claimed, |
| |
11| (i.e., death benefit or unpaid contributions or |
| |
12| both) together with a statement that such |
| |
13| personal property is subject to probate, |
| |
14| d. a statement by each individual claiming heir |
| |
15| identifying the amount of personal property that |
| |
16| the heir is claiming from the System, and that |
| |
17| the heir has been notified of, is aware of and |
| |
18| consents to the identified claims of all the |
| |
19| other claiming heirs of the deceased member |
| |
20| pending with the System; |
| |
21| 3. A written agreement or agreements signed by all |
| |
22| claiming heirs of the deceased member which provides |
| |
23| that the claiming heirs release, discharge and hold |
| |
24| harmless the System from any and all liability, |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 21
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1| obligations and costs which it may incur as a result |
| |
2| of making a payment to any of the deceased member's |
| |
3| heirs; |
| |
4| 4. A corroborating affidavit from an individual other |
| |
5| than a claiming heir, who was familiar with the |
| |
6| affairs of the deceased member; |
| |
7| 5. Proof that all debts of the deceased member, including |
| |
8| payment of last sickness, hospital, medical, death, |
| |
9| funeral and burial expenses have been paid or provided |
| |
10| for. |
| |
11| (b) The Executive Director of the System shall retain complete |
| |
12|discretion in determining which requests for probate waiver may be |
| |
13|granted or denied, for any reason. Should the System have any |
| |
14|question as to the validity of any document presented by the |
| |
15|claiming heirs, or as to any statement or assertion contained |
| |
16|therein, the probate requirement provided for in Section 1 et seq. |
| |
17|of Title 58 of the Oklahoma Statutes shall not be waived. |
| |
18| (c) After paying any death benefits or unpaid contributions to |
| |
19|any claiming heirs as provided pursuant to this subsection, the |
| |
20|System is discharged and released from any and all liability, |
| |
21|obligation and costs to the same extent as if the System had dealt |
| |
22|with a personal representative of the deceased member. The System |
| |
23|is not required to inquire into the truth of any matter specified in |
| |
24|this subsection or into the payment of any estate tax liability. |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 22
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1| (14) Upon the death of a retired member, the benefit payment |
| |
2|for the month in which the retired member died, if not previously |
| |
3|paid, shall be made to the joint annuitant if still living, to the |
| |
4|beneficiary of the member if the joint annuitant is deceased, or to |
| |
5|the member's estate if there is no surviving joint annuitant or |
| |
6|beneficiary. Such benefit payment shall be made in an amount equal |
| |
7|to a full monthly benefit payment regardless of the day of the month |
| |
8|in which the retired member died. |
| |
9| SECTION 2. AMENDATORY 70 O.S. 2021, Section 17-105.2, is |
| |
10|amended to read as follows: |
| |
11| Section 17-105.2. A. 1. A member of the Teachers' Retirement |
| |
12|System of Oklahoma who is eligible to retire with at least thirty |
| |
13|(30) years of creditable service may elect to receive a partial |
| |
14|lump-sum payment on the date of retirement and a reduced annuity. |
| |
15| 2. On and after the effective date of this act, a member who is |
| |
16|eligible to retire with at least twenty (20) years of creditable |
| |
17|service may elect to receive a partial lump-sum payment on the date |
| |
18|of retirement and a reduced annuity. |
| |
19| B. 1. The partial lump-sum payment shall be an amount equal to |
| |
20|the unreduced retirement benefit, which shall be referred to as the |
| |
21|"Maximum Retirement Allowance" for purposes of this section, which |
| |
22|would have been paid over a period of twelve (12), twenty-four (24), |
| |
23|or thirty-six (36) months, had the lump-sum option not been elected. |
| |
24| |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 23
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1| 2. The partial lump-sum payment made pursuant to paragraph 2 of |
| |
2|subsection A of this section shall be an amount equal to one-half |
| |
3|(1/2) of the unreduced retirement benefit, which would have been |
| |
4|paid over a period of twelve (12), twenty-four (24), or thirty-six |
| |
5|(36) months, had the lump-sum option not been elected. |
| |
6| C. Once the payout amount is elected, a reduced Maximum |
| |
7|Retirement Allowance is then calculated using factors adopted by the |
| |
8|Board of Trustees based upon the System's actuarial expected rate of |
| |
9|return and the member's age at retirement and the payout option |
| |
10|(twelve (12), twenty-four (24), or thirty-six (36) months) elected. |
| |
11|This reduced Maximum Retirement Allowance shall also be reduced in |
| |
12|accordance with any retirement options the member has elected |
| |
13|pursuant to Section 17-105 of Title 70 of the Oklahoma Statutes this |
| |
14|title. |
| |
15| B. D. The partial lump-sum payment, pursuant to this section, |
| |
16|shall be paid in a check separate from the regular monthly |
| |
17|retirement benefit. The total amount of the partial lump-sum |
| |
18|payment shall be deducted from the member's account balance |
| |
19|consisting of the employee contributions plus interest for purposes |
| |
20|of determining unused contributions remaining in the account. The |
| |
21|member may elect to rollover the taxable portion of the partial |
| |
22|lump-sum payment to an eligible retirement plan or individual |
| |
23|retirement account (IRA). The nontaxable portion of the partial |
| |
24|lump-sum payment can be rolled over to an IRA or another qualified |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 24
___________________________________________________________________________
1|retirement plan as allowed by the Internal Revenue Code and |
| |
2|regulations. This partial lump-sum payment shall be subject to |
| |
3|federal income tax in accordance with the Internal Revenue Code |
| |
4|Section 72 and other such Internal Revenue Code sections and |
| |
5|regulations as may be applicable. This partial lump-sum benefit is |
| |
6|subject to the same restrictions for assignment and attachment as |
| |
7|all other retirement benefits. The appropriate portion of the |
| |
8|partial lump-sum distribution will be reported to the Internal |
| |
9|Revenue Service (IRS) as taxable income and appropriate tax |
| |
10|withholdings will be withheld unless the member elects to make a |
| |
11|direct rollover of the taxable portion of the funds. Should the |
| |
12|member have after-tax contributions, a portion of such after-tax |
| |
13|contributions will be allocated to the partial lump-sum payment and |
| |
14|to the remaining annuity on a prorata pro rata basis. |
| |
15| C. E. The partial lump-sum option under this section may be |
| |
16|elected only once by a member and may not be elected by a retiree. |
| |
17| D. F. The board of trustees Board of Trustees shall promulgate |
| |
18|any rules necessary for the implementation of this section. |
| |
19| SECTION 3. This act shall become effective November 1, 2023. |
| |
20|COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS |
|March 1, 2023 - DO PASS AS AMENDED BY CS |
21| |
| |
22| |
| |
23| |
| |
24| |
| |
arsid12585128 SENATE FLOOR VERSION - SB634 SFLR Page 25
