North Dakota Code 15-39.1-16 – Option of teachers eligible to receive annuities
1. The board shall adopt rules providing for the receipt of retirement benefits in the following optional forms:
Terms Used In North Dakota Code 15-39.1-16
- 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
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Individual: means a human being. See North Dakota Code 1-01-49
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
a. Option one. Upon the death of the teacher, the reduced retirement allowance must be continued throughout the life of, and paid to, the teacher’s designated beneficiary named at the time of retirement. If the individual designated to receive the teacher’s reduced retirement allowance predeceases the teacher, the reduced retirement allowance must be converted to a single life retirement annuity under which benefit payments, if the individual designated died before July 1, 1989, must begin on July 1, 1989, or, if the individual designated dies on or after July 1, 1989, must begin on the first day of the month following the death of the individual designated.
b. Option two. Upon the death of the teacher, one-half of the reduced retirement allowance must be continued throughout the life of, and paid to, the teacher’s designated beneficiary named at the time of retirement. If the individual designated to receive the teacher’s reduced retirement allowance predeceases the teacher, the reduced retirement allowance must be converted to a single life retirement annuity under which benefit payments, if the individual designated died before July 1, 1989, must begin on July 1, 1989, or, if the designated beneficiary dies on or after July 1, 1989, must begin on the first day of the month following the death of the individual designated.
c. Option three. Upon the death of the teacher within twenty years of the commencement of annuity payments, the payments must be continued for the remainder of the twenty-year period to the teacher’s designated beneficiary. This payment option is available to teachers who retire after July 31, 2003.
d. Option four. Upon the death of the teacher within ten years of the commencement of annuity payments, the payments must be continued for the remainder of the ten-year period to the teacher’s designated beneficiary.
e. Option five. Partial lump sum distribution option. A member who is eligible for an unreduced service retirement annuity under section 15-39.1-10 and who retires after July 31, 2003, may make a one-time election to receive a portion of the retirement annuity paid in a lump sum distribution upon retirement, pursuant to rules adopted by the board.
(1) The eligible member may select a standard service retirement annuity or an optional service retirement annuity described in this subsection, together with a partial lump sum distribution. This option is not available to disabled members or beneficiaries of deceased members. The partial lump sum distribution option may be elected only once by a member and may not be elected by a retiree.
(2) The amount of the partial lump sum distribution under this subdivision is twelve months of a standard service retirement annuity computed under section 15-39.1-10 and payable at the same time the first monthly payment of the annuity is paid.
(3) The service retirement annuity selected by the member must be actuarially reduced to reflect the partial lump sum distribution option selected by the member.
(4) Before a retiring member selects a partial lump sum distribution under this subdivision, the fund shall provide a written notice to the member of the amount by which the member’s annuity will be reduced because of the selection.
2. The amount of the reduced retirement allowance payable upon the exercise of any of these options must be computed upon an actuarial basis through the use of standard actuarial tables and based upon the ages of the teacher and the teacher’s designated beneficiary. A member’s spouse, if designated as beneficiary, shall consent in writing to the member’s choice of benefit payment option for any benefit payments commencing after June 30, 1999. The board may rely on the member’s representations about that member’s marital status in determining the member’s marital status. The spouse’s written consent must be witnessed by a notary or a plan representative. If the spouse does not consent, or cannot be located, the member’s annuity benefit must be paid using option two, the fifty percent joint and survivor option.