Montana Code 19-20-1001. Payments upon death of member prior to retirement
19-20-1001. Payments upon death of member prior to retirement. (1) If a member dies before retirement:
Terms Used In Montana Code 19-20-1001
- account balance: means the sum of all the amounts deducted from the compensation of a member or paid by a member and credited to the member's individual account in the annuity savings account, together with interest, minus any amount deducted for correction of errors and the aggregate amount of all retirement benefit payments and refunds of accumulated contributions paid to or on behalf of the member. See Montana Code 19-20-101
- Alternate beneficiary: means an estate or an individual not designated as a beneficiary but that becomes a beneficiary pursuant to 19-20-1005. See Montana Code 19-20-101
- 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.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Designated beneficiary: means one or more primary beneficiaries or contingent beneficiaries designated pursuant to 19-20-1006. See Montana Code 19-20-101
- Individual: means a human being. See Montana Code 19-20-101
- Member: means a person who has an individual account in the annuity savings account. See Montana Code 19-20-101
- Vested: means that a member has been credited with at least 5 full years of membership service upon which contributions have been made and has a right to a future retirement benefit. See Montana Code 19-20-101
- Writing: includes printing. See Montana Code 1-1-203
(a)except as provided in subsection (2), a lump-sum refund of the member’s account balance must be paid to the member’s eligible beneficiary or beneficiaries;
(b)if the deceased member was vested and was an active member in the retirement system within 1 year before the member’s death, the eligible beneficiaries receiving a refund under subsection (1)(a) or a retirement allowance under subsection (2) are entitled to receive in equal shares a $500 lump-sum death benefit; and
(c)subject to 19-20-1009, the sum of $200 a month must be paid to each minor child of the deceased member until the child reaches 18 years of age.
(2)(a) In lieu of the refund provided for in subsection (1)(a), if the deceased member was vested, an eligible designated beneficiary who is an individual may elect to receive the beneficiary’s interest as a retirement allowance for the beneficiary’s lifetime. The retirement allowance must be determined as prescribed in 19-20-804, without reference to 19-20-805(5)(a), in the same manner as if the member elected the option A joint and survivor annuity optional allowance provided for in 19-20-702(2).
(b)The effective date of the retirement allowance provided for in subsection (2)(a) is the earlier of:
(i)the first of the month following the date of death; or
(ii)the effective date of the member’s retirement, as acknowledged in writing by the retirement system before the member’s death.
(c)(i) If more than one eligible beneficiary elects to receive a retirement allowance, each is entitled to an equal share of the benefit.
(ii)In the event that all eligible beneficiaries who elected a retirement allowance die, the member’s account balance, if any, will be paid out to the alternate beneficiary of the last surviving eligible beneficiary who elected a retirement allowance under subsection (2)(a).