§ 468. Optional benefits
(a) Until the first payment on account of a retirement allowance becomes normally due,
any member may elect to convert the retirement allowance otherwise payable to the
member after retirement into a retirement allowance that is its actuarial equivalent,
in accordance with one of the optional forms described in this section.
(1) Option 1. A reduced retirement allowance payable during the member’s life, with the provision
that at the member’s death a lump sum equal in amount to the difference between the
member’s accumulated contributions at the time of retirement and the sum of the annuity
payments actually made to the member during his or her lifetime shall be paid to such
person, if any, as the member has nominated by written designation duly acknowledged
and filed with the Retirement Board; or, in the absence of a written designation of
beneficiary or when the designated beneficiary is deceased, the residual amount payable
as a result of the death of the member after retirement shall be payable as follows:
(2)(A) In the case of an open estate, to the administrator or executor.
(B) In the case of a closed estate and the deceased member’s account is valued at less
than $1,000.00, in accordance with the Probate Division of the Superior Court decree
of distribution.
(C) In the absence of an open estate or Probate Division of the Superior Court decree
of distribution, and the deceased member’s account is valued at less than $1,000.00,
to the surviving spouse of the deceased owner, or, if there is no surviving spouse,
then to the next of kin according to 14 V.S.A. § 551.
(D) In all other cases, a probate estate shall be opened by the claimant, or other interested
party, in order to determine the appropriate distribution of the proceeds of the deceased
member’s account. When an estate is opened solely to distribute the proceeds of a
deceased member’s account under this section, the Probate Division of the Superior
Court may waive any filing fees.
(3) Option 3. A reduced retirement allowance payable during the member’s life, with the provision
that it shall continue after the member’s death for the life of the beneficiary nominated
by the member by written designation duly acknowledged and filed with the Retirement
Board at the time of retirement should such beneficiary survive the member.
(4) Option 4. A reduced retirement allowance payable during the member’s life, with the provision
that it shall continue after the member’s death at one-half the rate paid to the member
and be paid for the life of the beneficiary nominated by the member by written designation
duly acknowledged and filed with the Retirement Board at the time of retirement should
such beneficiary survive the member.
(b) Any member who elects to receive a retirement allowance under the provisions of option
3 or 4 may elect to receive a benefit further reduced actuarially as prescribed by
the Board with the added provision that on the basis of stipulations contained in
a plan-approved domestic relations order or if the retired member survives the member’s
nominated beneficiary, the retirement allowance that would have been payable during
the member’s life computed pursuant to section 459, 460, or 461 of this title, whichever is applicable, shall be paid to the retired member during the remainder
of the member’s lifetime. If a member does not make an election as to the form of
his or her retirement allowance, the member shall receive his or her retirement allowance
computed pursuant to section 459, 460, or 461 of this title, whichever is applicable. (Added 1971, No. 231 (Adj. Sess.), § 4; amended 1999, No. 53, § 4; 2007, No. 13, § 7; 2009, No. 24, § 2; 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011; 2025, No. 18, § 10, eff. May 13, 2025.)