Connecticut § 31-424 - Establishment of rules and procedures. Design features.

§ 31-424. Establishment of rules and procedures. Design features.

Sec. 31-424. Establishment of rules and procedures. Design features. (a) The Comptroller shall adopt regulations, in accordance with the provisions of chapter 54 governing the distribution of funds from the program. Such regulations shall allow for such distributions as may be permitted or required by the program and any applicable provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

(b) The program shall include the following design features prescribed by the Comptroller, provided the Comptroller determines such features to be feasible and cost effective:

(1) A lifetime income investment option intended to provide participants with a source of retirement income for life. Any lifetime income investment for the program shall include spousal rights;

(2) Provide to each participant, one year in advance of the participant's normal retirement age, a disclosure explaining (A) the rights and features of the lifetime income investment; (B) that once the participant reaches normal retirement age, fifty per cent of the participant's account will be invested in the lifetime income investment; and (C) that the participant may elect to invest a higher percentage of his or her account balance in the lifetime income option;

(3) On the date a participant reaches his or her normal retirement age, invest fifty per cent of the participant's account balance, or such higher amount as specified by the participant, in the lifetime income investment;

(4) Permit each participant to elect a date not earlier than his or her normal retirement age on which to begin receiving distributions, provided, in the absence of an election, such distributions shall commence not later than ninety days after the participant reaches his or her normal retirement age; and

(5) Adopt regulations, in accordance with the provisions of chapter 54 whereby each participant may elect to invest a higher percentage of his or her account balance in the lifetime income investment.

(c) The Comptroller shall inform participants about their rights to withdraw funds from the program in accordance with the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time. For participants who elect to withdraw their assets prior to their normal retirement age, the Comptroller shall notify such participants of the potential for tax penalties associated with such withdrawal and the effect of such withdrawal on such participant's expected retirement income.

(P.A. 16-29, S. 9; May Sp. Sess. P.A. 16-3, S. 103, 207; P.A. 22-118, S. 104.)

History: P.A. 16-29 effective May 27, 2016; May Sp. Sess. P.A. 16-3 changed effective date of P.A. 16-29, S. 9, from May 27, 2016, to January 1, 2017, effective June 2, 2016, and made technical changes in Subsecs. (b)(1) and (c), effective January 1, 2017; P.A. 22-118 replaced references to the Connecticut Retirement Security Authority with the Comptroller, replaced “establish rules and procedures” and “establish procedures” with “adopt regulations” and added references to Ch. 54, effective July 1, 2022.