Alabama § 45-37-123.101 - Postretirement Joint Survivorship Pension.

§ 45-37-123.101. Postretirement Joint Survivorship Pension.

(a) Election of postretirement joint survivorship pension. In lieu of a benefit under subsections (a) to (c), inclusive, of Section 45-37-123.100, superannuation retirement benefit, early retirement benefit, or deferred retirement benefit, respectively, a member may elect to receive a postretirement joint survivorship pension.

(1) PERCENTAGE ELECTION. In the event that a member desires to elect pursuant to this subsection to receive a postretirement joint survivorship pension, he or she shall elect one of the following percentages, which election shall be the actuarial equivalent of the monthly pension benefit provided in subsections (a) to (c), inclusive, of Section 45-37-123.100, as applicable:

a. Reduced monthly benefit payable over the life of the member and the life of the member’s designated beneficiary, 50 percent postretirement joint survivorship pension.

b. Reduced monthly benefit payable over the life of the member and the life of the member’s designated beneficiary, 66 and two-thirds percent postretirement joint survivorship pension.

c. Reduced monthly benefit payable over the life of the member and the life of the member’s designated beneficiary, 75 percent postretirement joint survivorship pension.

d. Reduced monthly benefit payable over the life of the member and the life of the member’s designated beneficiary, 100 percent postretirement joint survivorship pension.

(2) FORM OF POSTRETIREMENT JOINT SURVIVORSHIP PENSION. In addition to electing a percentage under subdivision (1), a member who desires to elect to receive a postretirement joint survivorship pension shall elect one of the following two forms:

a. Pop-up Form. Under the pop-up form, if the member’s designated beneficiary predeceases the retired member, then in the month following the designated beneficiary’s death, the member’s monthly pension benefit shall pop-up to the amount that would have been payable to the member under subsections (a) to (c), inclusive, of Section 45-37-123.100, as applicable, as if the member had never elected a postretirement joint survivorship pension; the cost of a pop-up form is more than the cost of the regular form described in paragraph b.

b. Regular Form. Under the regular form, if the member’s designated beneficiary predeceases the retired member, then the member shall continue to receive the same amount that he or she was receiving prior to the designated beneficiary’s death. The amount of the benefit payment shall not change.

(b) Timing of election. Except as provided in the immediately following sentence, in the event that a member desires to elect a postretirement joint survivorship pension, he or she shall do so in writing, on a form provided by the pension board, no later than the member’s last day of employment. In the event that a member previously elected a deferred retirement benefit and desires to elect a postretirement joint survivorship pension, he or she shall do so in writing, on a form provided by the pension board, no later than the day before the member’s sixtieth birthday.

(c) Timing of payments. Payment to the member commences on the day after the member terminates employment and shall continue to be paid each month thereafter until the member’s death. If the member’s designated beneficiary survives after the death of the member, the postretirement joint survivorship pension payments shall be made monthly to the designated beneficiary, beginning on the first day of the month following the member’s death, provided that the pension board is notified of the death in a timely manner and the designated beneficiary has completed all forms required by the pension board. Payments shall terminate with the first monthly payment preceding the second to die of the member and the designated beneficiary. In the event that a refund is to be paid pursuant to Section 45-37-123.104(4)c., the payment shall be made as soon as administratively feasible following the member’s/designated beneficiary’s deaths.

(d) Cost of postretirement joint survivorship pension. To the extent that a member elects payment of a postretirement joint survivorship pension for his or her designated beneficiary, the benefit otherwise payable to the member shall be actuarially reduced to reflect the election of a postretirement joint survivorship pension.

(e) Changes in election. At any time before termination of employment, the member may cancel his or her election to have payment in such form by completing a form provided by the pension board. Except as otherwise stated herein, the member’s election of a postretirement joint survivorship pension shall be irrevocable once the member terminates employment.

(1) DEATH. a. Death of Member Prior to Actual Retirement. In the event that a member dies prior to his or her actual retirement, any postretirement joint survivorship pension election he or she made shall be deemed void.

b. Death of Designated Beneficiary Before Payments Commence. In the event that a member elects a postretirement joint survivorship pension and his or her designated beneficiary dies before payments commence, then upon the designated beneficiary’s death, the member’s election of the postretirement joint survivorship pension shall be automatically canceled, and the member’s right to receive payments in accordance with subsections (a) to (c), inclusive, of Section 45-37-123.100, as applicable, shall be reinstated.

c. Death of Both Member and Designated Beneficiary-Refund. Except as provided in the immediately following sentence, in the event that a payment begins to the member, no refund of employee contributions shall be paid thereafter. Notwithstanding the foregoing sentence, in the event that the member and his or her designated beneficiary die, a refund shall be made in accordance with Section 45-37-123.104(4)c.

(2) DIVORCE. In the event that a married member names his or her spouse as designated beneficiary, a subsequent divorce of the member and the designated beneficiary shall not cancel an election of a postretirement joint survivorship pension. However, in the event that a member or designated beneficiary presents to the pension board what the pension board believes to be a valid divorce decree, settlement agreement, or domestic relations order, collectively, a DRO, that provides for a waiver or forfeiture of the postretirement joint survivorship pension, then the waiver or forfeiture shall be recognized by the pension board, and, accordingly, the postretirement joint survivorship pension shall be deemed void, and the member’s monthly pension benefit shall thereafter pop-up to the amount that would have been payable to the member under subsections (a) to (c) of Section 45-37-123.100, as applicable, as if the member had never elected a postretirement joint survivorship pension. The pop-up shall occur in the month following the pension board’s receipt and approval of the DRO. The member shall not be allowed to elect another joint survivorship pension. See also Section 45-37-123.194(a) for additional rules relating to certain DROs.

(f) Designated beneficiary designation. Any beneficiary designation made by a member for a preretirement joint survivorship pension shall automatically lapse upon the member’s retirement or other termination of employment, and the member shall complete new forms, to be provided by the pension board, to designate a beneficiary of any postretirement joint survivorship pension, in accordance with this section.

(g) Proof of death and marriage. The pension board may require proper proof of death or marriage in accordance with Section 45-37-123.103(f).