Colorado § 31-31.5-504 - Distribution of money purchase component accounts.

§ 31-31.5-504. Distribution of money purchase component accounts.

(1) A member's vested account balance becomes eligible for distribution upon the member's death, permanent occupational or total disability pursuant to part 8 of article 31 of this title 31, normal, vested, or early retirement, or termination of employment.

(2) Upon becoming eligible for distribution and upon approval of the board, a member, or the designated beneficiary if the member dies before distribution of the member's individual account, may elect to receive the vested portion of balance of the member's individual account by one of the following methods:

(a) The member or designated beneficiary may choose a lump sum payment of all or a portion of the member's individual account.

(b) The member or designated beneficiary may elect to have the value of all or a portion of the individual account used to purchase an annuity contract, with a term and in a form as the member elects. If there is an elected distribution in the form of an annuity, any benefit payable as a result of the member's or beneficiary's death must be determined solely under the terms of the annuity contract.

(c) The member may elect to have all or a portion of the member's individual account distributed in substantially equal monthly payments over the member's life expectancy or a period not to exceed the joint life expectancy of the member and a spouse, if the spouse is the sole beneficiary, or until the account is exhausted. If the member dies prior to the member's required beginning date, the designated beneficiary may elect to have all or a portion of the member's individual account distributed in substantially equal monthly payments over a period not to exceed the life expectancy of the designated beneficiary.

(d) A member who is vested in both member and employer contributions to the money purchase component of the plan and has attained age fifty-five may elect to transfer all or part of the member's individual account balance within the plan from the money purchase component account to the lifetime benefits account to purchase a monthly benefit, which is considered a portion of the pension under part 4 of this article 31.5. At retirement, a member may make a one-time irrevocable election to purchase the monthly benefit in a single lump sum, which must be transferred prior to the receipt of benefits from the lifetime benefit components. Funds may not be transferred from outside the statewide retirement plan to purchase a monthly benefit. Any transferred or rollover funds, except those funds transferred by a department as part of an affiliation or reentry process, held within the member's individual account are not eligible for purchase of a monthly benefit and remain in the account until otherwise distributed.

(3) A member who terminates employment and has taken a refund of the member's contributions to the lifetime benefit components is not required to withdraw the money purchase component account, which shall be maintained and shall continue to receive allocations for earnings and expenses until the assets of the account are distributed.

(4) The board may establish by rule a minimum value for an individual account and may require distribution if an account falls below the required minimum value without receipt of a request for distribution.

(5) Upon a member's death with no designated beneficiary, the member's individual account must be distributed to the member's estate. Upon the death of a designated beneficiary who succeeded the member in death, the member's individual account must be distributed to the designated beneficiary's estate.

(6) To the extent allowed under the federal "Internal Revenue Code of 1986", as amended, the board may, but is not required to, provide by rule for loans or disaster distributions to members and for in-service distributions.

Source: L. 2022: Entire article added, (HB 22-1034), ch. 61, p. 297, § 1, effective August 10.

PART 6

AMENDMENT OF THE PLAN