SEC. 16.75. OPTIONAL MODIFICATIONS OF ALLOWANCES.

Until the first payment on account of any retirement allowance is made, a member or a retired person, except persons who are members under Section 8.565 of the Charter, may elect to receive the actuarial equivalent of their retirement allowance payable throughout their life with the provision that:

Option 1. If the member dies before receiving in lesser annuity payments the amount of their accumulated contributions as it was at their retirement, the balance of such accumulated contributions shall be paid to the member’s estate or to such person, or Special Needs Trust, as the member shall nominate by written designation duly executed and filed with the Retirement Board at the time of their election; or

Option 2. Upon the member’s death, their lesser retirement allowance shall be continued throughout the life of and paid to such person, or Special Needs Trust, as the member shall nominate by written designation duly executed and filed with the Retirement Board at the time of their election; or

Option 3. Upon the member’s death, one-half of their lesser retirement allowance shall be continued throughout the life of and paid to such person, or Special Needs Trust, as the member shall nominate by written designation duly executed and filed with the Retirement Board at the time of their election.

Said election of option shall be made by signing and filing with the Retirement Board a notarized election of option on a form provided by the Retirement Board; provided, however, that if a retired person shall die before the first payment on account of their retirement allowance is made, such election of option shall be considered void and of no effect and the member’s death shall be considered as that of a member before retirement, unless:

(a) Such retired person has elected Option 2 or 3; or

(b) Such person was retired on or after April 1, 1966, as a member under Section A8.507 or A8.509 of the Charter and such person has elected Option 1 and an allowance as provided in subsection (d) of Section 16.80 of this Code is otherwise payable upon their death.

(Amended by Ord. 296-83, App. 5/27/83; Ord. 259-22, File No. 221024, App. 12/22/2022, Eff. 1/22/2023)

(a) If a domestic relations order requires a distribution to a former spouse after a member qualifies for retirement but before commencement of a member's pension, the retirement system may undertake such payments provided that such order conforms with the terms, conditions, and actuarial assumptions of the plan and provided further that the amount of any payments to be distributed to a former spouse plus interest shall be offset by either reductions in lump sum benefits or by an appropriate actuarial reduction of any allowance later payable to the member or a beneficiary.

(b) At the time of retirement or later, a member, or a retired member, may elect to receive the actuarial equivalent of his or her retirement allowance payable throughout his or her lifetime with the provision that:

During the member's lifetime, his or her lesser allowance shall be divided with a former spouse according to community property principles. Upon the member's death, the community property portion, not to exceed 50% of the reduced allowance, shall be payable to the former spouse throughout his or her lifetime.

The same portion of the normal cost-of-living adjustments that are payable to the former spouse during the member's lifetime will continue to be payable after the member's death.

A member may make this election after the first payment of a retirement allowance upon a determination that it is a bona fide and equitable division of the community property interest in the retirement allowance.

(c) Nothing in this Section shall be construed to obligate the retirement system to pay greater benefits than those otherwise payable by the terms of the plan. Any allowance otherwise payable to any other survivor may be reduced by the benefits authorized under this Section to the degree necessary to ensure that the Retirement System does not pay increased benefits.

(Added by Ord. 210-89, App. 6/22/89)