Michigan Laws 38.1704 – Payment of benefit to alternate payee under EDRO; effective date; form
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Except as otherwise provided in this act, the payment of a benefit to an alternate payee under an EDRO and this act shall begin on the retirement allowance effective date of the participant. The payment of a benefit under an EDRO and this act shall be paid in 1 of the following forms, as applicable:
(a) A single life annuity that is equal to the actuarial equivalent of the alternate payee’s share of the benefit payable throughout the life of the alternate payee. If the participant is entitled to the payment of a benefit that is not reduced due to early retirement under the retirement system, the alternate payee’s single life annuity shall be calculated using the participant’s unreduced benefit. If the participant is only entitled to the payment of a benefit that is reduced due to early retirement under the retirement system, the alternate payee’s single life annuity shall be calculated using the participant’s reduced benefit.
Terms Used In Michigan Laws 38.1704
- Alternate payee: means a spouse of a participant under a judgment of separate maintenance, or a former spouse, child, or dependent of a participant, who is named in an eligible domestic relations order. See Michigan Laws 38.1702
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Benefit: means an annuity, a pension, a retirement allowance, or an optional benefit accrued or accruing to a participant under a retirement system or a postretirement subsidy payable to a participant under a retirement system. See Michigan Laws 38.1702
- EDRO: means a domestic relations order that is considered an eligible domestic relations order under section 11 or that meets all of the following requirements:
(i) The domestic relations order states the names and last known addresses of the participant and alternate payee. See Michigan Laws 38.1702Participant: means a member, deferred member, vested former member, deceased former member, or retirant under the retirement system. See Michigan Laws 38.1702 Retirement system: means a public employee retirement system created and established by this state or any political subdivision of this state. See Michigan Laws 38.1702
(b) If a retirement system offers a participant an optional form of payment of a benefit at retirement, a reduced benefit that is equal to the actuarial equivalent of the total benefit being divided under the EDRO payable throughout the lives of the participant and the alternate payee. The reduced benefit shall be payable in the manner provided under the optional form of payment under the retirement system. The EDRO shall specify the percentage or amount of the reduced benefit that is payable under this subdivision to the participant and to the alternate payee while both are alive. If the participant predeceases the alternate payee while a reduced benefit is being paid to the participant and the alternate payee under this subdivision, the survivor portion of the reduced benefit shall be payable to the alternate payee. If the alternate payee predeceases the participant while a reduced benefit is being paid to the participant and the alternate payee under this subdivision, the alternate payee’s percentage or amount of the reduced benefit shall revert to and become payable to the participant.
(c) A single life annuity that is equal to the alternate payee’s share of the benefit payable throughout the life of the participant.