| (a) A retiring cash balance group member may elect
to receive an optional cash balance annuity instead of a standard
cash balance annuity.
(b) A person who selects an optional lifetime cash
balance annuity must designate, before the selection becomes effective,
one person to receive the annuity on the death of the person making
the selection. A person who selects an optional cash balance annuity
payable for a guaranteed period may designate, before or after retirement,
one or more persons to receive the annuity on the death of the person
making the selection.
(c) A person eligible to select an optional cash balance
annuity under this section may select an option which provides that:
(1) after the retiree's death, the reduced annuity
is payable in the same amount throughout the life of the person designated
by the retiree before retirement;
(2) after the retiree's death, one-half of the reduced
annuity is payable throughout the life of the person designated by
the retiree before retirement;
(3) if the retiree dies before 60 monthly annuity payments
have been made, the remainder of the 60 payments are payable to one
or more beneficiaries or, if one does not exist, to the retiree's
estate;
(4) if the retiree dies before 120 monthly annuity
payments have been made, the remainder of the 120 payments are payable
to one or more beneficiaries or, if one does not exist, to the retiree's
estate; or
(5) after the retiree's death, three-fourths of the
reduced annuity is payable throughout the life of the person designated
by the retiree before retirement, subject to age adjustment factors
that may be applicable under Treasury Regulation 1.401(a)(9)-6.
(d) If a beneficiary designated by a retiree under
subsection (b) of this section predeceases the retiree and the retiree
has elected an optional lifetime annuity, the reduced annuity shall
be increased to the standard cash balance annuity that the retiree
would have been entitled to receive if the retiree had not selected
the optional annuity. The standard cash balance annuity shall be adjusted
as appropriate for post-retirement increases in retirement benefits
authorized by law since the date of retirement.
(e) Any increase in an annuity under subsection (d)
begins with the payment for the month following the month in which
the designated beneficiary dies, and the increased annuity is payable
to the retiree for the remainder of the retiree's life.
(f) The computation of an optional cash balance annuity
must be made without regard to the gender of the annuitant or designated
beneficiary.
(g) Except as provided by Tex. Gov't Code §814.008(b),
(c), or (d) or §76.7 of this chapter, a person who selected an
optional cash balance annuity described by subsection (c)(1), (c)(2),
or (c)(5) of this section may not change or revoke a beneficiary designation
after the date of retirement.
(h) A beneficiary designation that names a former spouse
as a beneficiary for a guaranteed optional cash balance annuity described
by subsection (c)(3) or (c)(4) of this section is invalid unless the
designation is made after the date of the divorce.
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