§88-83  Electionof retirement allowance option.  (a)  Upon retirement, any member may electto receive the maximum retirement allowance to which the member is entitledcomputed in accordance with section 88-74, 88-76, or 88-80, and in the event ofthe retirant's death, there shall be paid to the retirant's designatedbeneficiary, or otherwise to the retirant's estate the difference between:

(1)  The balance of themember's accumulated contributions at the time of the member's retirement; and

(2)  The retirementallowance and, if the retirant retired after November 30, 2004, the postretirement allowances paid or payable to the retirant prior to death.

In lieu of thismaximum allowance, the member may elect to receive the member's retirementallowance under any one of the optional plans described below, which shall beactuarially equivalent to the maximum allowance.

Option 1:  Themember may elect to receive a lesser retirement allowance during the member'slifetime.  At the member's retirement, there shall be established an amount ofinitial insurance that shall be computed on the basis of actuarial factorsadopted by the board.  Upon the death of the retirant, there shall be paid tothe retirant's designated beneficiary, otherwise to the retirant's estate:  anybalance remaining in the initial insurance reserve, after deducting theretirement allowance and, if the retirant retired after November 30, 2004, thepost retirement allowances paid to the retirant prior to death.  In lieu of thelump sum balance, the beneficiary may, if the beneficiary is a natural person,elect to receive an allowance for life based on the value of the balance;provided that the allowance is not less than $100 per month.  If thebeneficiary of the retirant who:

(1)  Retired after November30, 2004, and

(2)  Dies after June 30,2007,

elects to receive theallowance in lieu of the lump sum balance, there shall also be payable to thebeneficiary an additional allowance calculated and payable in the same manneras a post retirement allowance under section 88-90.  The additional allowanceshall be based on the original amount of the allowance in lieu of the lump sumbalance, and shall commence on the first day of July following the calendaryear in which payment of the allowance in lieu of the lump sum balance iseffective.

Option 2:  Themember may elect to receive a lesser retirement allowance during the member'slifetime and have those allowances, including cumulative post retirementallowances, if applicable, continued after the member's death to the member'sbeneficiary designated at the time of the member's retirement, for the life ofthe beneficiary.  If the beneficiary dies prior to the retirant, all furtherpayments shall cease upon the death of the retirant; provided that for membersretiring after November 30, 2004, if the retirant's designated beneficiary diesat any time after the retirant retired, but before the death of the retirant,the retirant, upon the death of the retirant's designated beneficiary, shallreceive a retirement allowance, including cumulative post retirementallowances, calculated as if the retirant had selected the maximum retirementallowance to which the retirant is entitled.  Only one beneficiary shall bedesignated under this option.  The beneficiary designated under this optionshall be a natural person, and benefits under this option shall only be paid toa natural person.

Option 3:  Themember may elect to receive a lesser retirement allowance during the member'slifetime and have one-half of the allowance, including fifty per cent of allcumulative post retirement allowances, if applicable, continued after themember's death to the member's beneficiary designated at the time of themember's retirement, for the life of the beneficiary.  If the beneficiary diesprior to the retirant, all further payments shall cease upon the death of theretirant; provided that for members retiring after November 30, 2004, if theretirant's designated beneficiary dies at any time after the retirant retired,but before the death of the retirant, the retirant, upon the death of theretirant's designated beneficiary, shall receive a retirement allowance,including cumulative post retirement allowances, calculated as if the retiranthad selected the maximum retirement allowance to which the retirant isentitled.  Only one beneficiary shall be designated under this option.  Thebeneficiary designated under this option shall be a natural person, andbenefits under this option shall only be paid to a natural person.

Option 4:  Themember may elect to receive a lesser retirement allowance during the member'slifetime and provide some other benefit to the member's beneficiary inaccordance with the member's own specification; provided that this electionshall be certified by the actuary to be the actuarial equivalent of themember's retirement allowance and shall be approved by the board.

Option 5:  Themember may elect to receive the balance of the member's accumulatedcontributions at the time of retirement in a lump sum and, during the member'slifetime, a retirement allowance equal to the maximum retirement allowancereduced by the actuarial equivalent of these contributions.  Upon the death ofthe retirant, all further payments shall cease.  Only a member retiring fromservice having at least ten years of credited service or for disability mayelect this retirement allowance option.

To receive benefits,the beneficiary must have been designated by the member in the form and mannerprescribed by the board.

(b)  In the event ofthe death of a member after the date of the filing of the member's writtenapplication to retire but prior to the retirement date designated by themember, and, if the member was eligible to retire on the date of the member'sdeath, the member's designated beneficiary, or otherwise the personalrepresentative of the member's estate, may elect to receive either the deathbenefit under section 88-84 or the allowance under the option selected by themember that would have been payable had the member retired.  The effective dateof the member's retirement shall be the first day of a month, except for themonth of December when the effective date of retirement may be on the first orlast day of the month, and shall be no earlier than the later of thirty days fromthe date the member's retirement application was filed or the day following themember's date of death.  The election may not be made if, at the time of themember's death, there are individuals who are eligible to receive deathbenefits under section 88-85 who have made a claim for the benefits; providedthat, if the designated beneficiary is an individual eligible to receivebenefits under section 88-85, the designated beneficiary may receive benefitspursuant to an election made under this section pending disposition of theclaim for benefits under section 88-85.  If death benefits are payable undersection 88-85, the death benefits shall be in lieu of any benefits payablepursuant to this section.

(c)  No election bya member under this section shall take effect unless:

(1)  The spouse orreciprocal beneficiary of the member is furnished written notification that:

(A)  Specifies theretirement date, the benefit option selected, and the beneficiary designated bythe member;

(B)  Providesinformation indicating the effect of the election; and

(C)  Is determinedadequate by rules adopted by the board in accordance with chapter 91;

(2)  The member selectsoption 2 or option 3 and designates the spouse or reciprocal beneficiary as thebeneficiary; or

(3)  It is established tothe satisfaction of the board that the notice required under paragraph (1)cannot be provided because:

(A)  There is nospouse or reciprocal beneficiary;

(B)  The spouse orreciprocal beneficiary cannot be located;

(C)  The member hasfailed to notify the system that the member has a spouse or reciprocalbeneficiary, or has failed to provide the system with the name and address ofthe member's spouse or reciprocal beneficiary; or

(D)  Of otherreasons, as established by board rules adopted in accordance with chapter 91.

Any notice provided toa spouse or reciprocal beneficiary, or determination that the notification of aspouse or reciprocal beneficiary cannot be provided, shall be effective onlywith respect to that spouse or reciprocal beneficiary.  The system will relyupon the representations made by a member as to whether the member has a spouseor reciprocal beneficiary and the name and address of the member's spouse orreciprocal beneficiary.

(d)  Each member,within a reasonable period of time before the member's retirement date, shallbe provided a written explanation of:

(1)  The terms andconditions of the various benefit options;

(2)  The rights of themember's spouse or reciprocal beneficiary under subsection (c) to be notifiedof the member's election of a benefit option; and

(3)  The member's right tomake, and the effect of, a revocation of an election of a benefit option.

(e)  The systemshall not be liable for any false statements made to the system by the memberor by the member's employer.

(f)  In the event ofthe death of the retirant within one year after the date of retirement, theretirant's designated beneficiary may elect to receive either the death benefitunder the retirement allowance option selected by the retirant, or the benefitthat would have been paid under section 88-84 had the retirant died immediatelyprior to retirement, less any payments received by the retirant; provided thatthe designated beneficiary may not elect to receive benefits under option 2 ofthis section if the retirant would not have been permitted by applicable law orby the rules of the board to name the designated beneficiary as beneficiaryunder option 2.

(g)  The increase inthe retirant's benefit under options 2, 3, and, if applicable, 4 upon the deathof the retirant's designated beneficiary shall be effective the first day ofthe month following the date of death of the designated beneficiary. Theretirant shall notify the system in writing and provide a certified copy of thebeneficiary's death certificate.  The system shall make retroactive benefitpayments to the retirant, not to exceed six months from the date the writtennotification and the certified copy of the death certificate are received bythe system.  The retroactive payments shall be without interest.

(h)  Upon a member'sretirement:

(1)  The member's electionof a retirement allowance option shall be irrevocable; and

(2)  The member'sdesignation of a beneficiary shall be irrevocable if the retirement allowanceoption elected by the member is:

(A)  Option 2 or 3;

(B)  An option thatincludes option 2 or 3 in combination with some other form of benefit payment;or

(C)  Any otheroption for which the actuarial equivalent of the option to the maximum retirementallowance is determined at the time of the member's retirement based in wholeor in part on the age of the member's designated beneficiary.

(i)  A claim underthis section by a retirant's or member's beneficiary for benefits upon thedeath of a retirant or member shall be filed no later than three years from thedate of the retirant's or member's death. [L 1925, c 55, §6(11); RL 1935, pt of§7925; RL 1945, §708, subs 11; am L 1951, c 127, §2; am L 1955, c 270, §3; RL1955, §6-50; am L 1959, c 157, §1; am L 1963, c 127, §11; am L 1964, c 62, §§6,8; am L 1965, c 222, §§6, 9; Supp, §6-42.5; HRS §§88-74, 75; am L 1969, c 110,pt of §1; am L 1972, c 22, §1; am L 1977, c 82, §1; am L 1982, c 115, §3; gench 1985; am L 1988, c 8, §1; am L 1998, c 151, §9; am L 2003, c 182, §1; am L2004, c 179, §12; am L 2006, c 169, §13; am L 2007, c 215, §13]

 

Attorney General Opinions

 

  Change to "unisex" option factor tables valid. Att. Gen. Op. 82-3.