[§88-22.5]  Federal tax qualification
requirements.  (a)  The system shall be administered in accordance with the
requirements of section 401(a)(1), (2), (8), (9), (25), and (31) of the
Internal Revenue Code of 1986, as amended.  Without limiting the generality of
the foregoing and notwithstanding any provision of chapter 88 to the contrary:



(1)  Prior to the satisfaction of all liabilities with
respect to members and their beneficiaries, no part of the corpus or income of
the system shall be used for or diverted to purposes other than for the
exclusive benefit of members and their beneficiaries.  The payment of
reasonable expenses from the expense fund  for the administration of the system
in accordance with section 88-116 shall be deemed to be for the benefit of
members and their beneficiaries;



(2)  Benefits forfeited by a member for any reason
shall not be applied to increase the benefits a member or beneficiary would
otherwise receive under the system;



(3)  In accordance with rules adopted by the board of
trustees, the entire interest of a member shall be distributed or distribution
shall begin no later than the member's "required beginning date", as
defined in section 401(a)(9) of the Internal Revenue Code of 1986, as amended;



(4)  In accordance with rules adopted by the board of
trustees, a member or beneficiary may elect, at the time and in the manner
prescribed by the board of trustees, to have any portion of an "eligible
rollover distribution" paid in a "direct rollover" to an "eligible
retirement plan", as such terms are defined in section 401(a)(31) of the
Internal Revenue Code of 1986, as amended; and



(5)  In the event of the termination of or complete
discontinuance of employer contributions to the system, the rights of all
members to benefits accrued as of the date of such termination or
discontinuance, to the extent then funded, shall be nonforfeitable.



(b)  The board of trustees shall adopt rules
necessary for the purposes of this section.  Rules adopted for the purposes of
this section shall be exempt from the public notice, public hearing, and
gubernatorial approval requirements of chapter 91; provided that the rules
shall be adopted at a public meeting subject to the requirements of part I of
chapter 92 and a copy of the proposed rules shall be available for public
inspection at the office of the system at least six calendar days before the
meeting. [L 2004, c 182, §1]