§ 16-61. Eligible rollover distributions.

(a) General. A distributee may elect, at the time and in the manner prescribed by the Board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distribute in a direct rollover.

(b) Definitions

(1) Eligible Rollover Distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distribute, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distribute or the joint lives (or joint life expectancies) of the distribute and the distributee’s designated Beneficiary, or for a specified period of ten years or more, any distribution to the extent such distribution is required under Section 401 (a)(9) of the Code, and the portion of any extent such distribution that is not includible in gross income. For purposes of this section, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distribute may not elect to have any portion of such a distribution paid directly to an eligible retirement plan. For purposes of this section, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the code, or to a qualified defined contribution plan described in section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(2) Eligible retirement Plan: an eligible retirement plan is an individual retirement account described in Section 408(a)) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee’s eligible rollover distribution. However, in the case of the eligible rollover distribution to the surviving Spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. For purposes of this section, an eligible retirement plan shall also mean an annuity contract described in section 403(b) of the Code and an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in section 414(p) of the Code.

(3) Distributee. A Distributee includes an employee or former employee. In addition, the employee’s or former employee’s surviving Spouse is a distributee with regard to the interest of the Spouse.

(4) Direct Rollover. A direct rollover is a payment by the plan to the eligible retirement plan specified by the distribute.

(c) Notice of eligible rollover distributions

(1) The members' retirement plan shall, within a reasonable period of time before making an eligible rollover distribution, provide a written explanation to the recipient of such distribution explaining to the following:

a. The provisions under which the recipient may have the distribution directly transferred to an eligible retirement plan and that the automatic distribution by direct transfer applies to certain distributions in accordance with section 401(a)(31)(B) of the Code.

b. The provision which requires the withholding of tax on the distribution if it is not directly transferred to an eligible retirement plan.

c. The provisions under which the distribution will not be subject to tax if transferred to an eligible retirement plan within sixty (60) days after the date on which the recipient received the distribution.

d. The provisions under which distributions from the eligible retirement plan receiving the distribution may be subject to restrictions and tax consequences which are different from those applicable to distributions from the plan making such distribution.

(2) For the purpose of subsection (d)(1), the term "reasonable period of time" shall have the meaning assigned to it under section 401(a)(31) of the Code and the regulations thereunder.

(Ord. No. 2013-08, § 3, 5-21-13; Ord. No. 2015-14, § 1, 11-17-15)

Notation

Editor's note

Ord. No. 2013-08, § 3, adopted May 21, 2013, amended the Code by repealing former § 16-61 which pertained to direct transfers of eligible rollover distributions and derived from Ord. No. 99-02, § 2, adopted May 4, 1999.