Qualified Government Excess Benefit Arrangement (QGEBA)

PURPOSE: This rule implements section 70.655, RSMo and section 415(m) of Title 26 of the United States Code and allows for the payment of benefits in excess of the limits imposed by section 415 of Title 26 of the United States Code to which retirees and beneficiaries are otherwise entitled pursuant to Chapter 70, RSMo. (1) Definitions. (A) “Allowance” shall mean the total of a retiree’s annuity and pension. (B) “Annuity” shall mean a monthly amount derived from the accumulated contributions of a member and payable by the system throughout the life of one (1) or more persons or for a temporary period. (C) “Pension” shall mean a monthly amount derived from contributions of an employer and payable by the system throughout the life of one (1) or more persons or for a temporary period. (D) “Maximum benefit” shall mean the monthly allowance a retiree or beneficiary is entitled to receive from the retirement system, to the extent the pension component of such allowance does not exceed the annual benefit limit set forth in section 415 of Title 26 of the United States Code, as amended. (E) “Retirement System” shall mean the Missouri Local Government Employees’ Retirement System established pursuant to Chapter 70, RSMo. (F) “Section 415(m) benefit plan participant” shall mean any retiree or beneficiary whose pension otherwise payable pursuant to Chapter 70, RSMo, would exceed the maximum benefit permitted under section 415 of Title 26 of the United States Code, as amended. Eligibility as a section 415(m) benefit plan participant shall be determined by the retirement system at the time of retirement and annually thereafter. (G) “Section 415(m) benefit plan” shall mean the separate, unfunded qualified government excess benefit arrangement within the meaning of section 415(m) of Title 26 of the United States Code, as amended, and established pursuant to administrative rule, and that is separate from the retirement system. (H) “Unrestricted benefit” shall mean the monthly pension a retiree or beneficiary would have been entitled to receive without giving effect to the limits imposed by section 415 of Title 26 of the United States Code. (2) A section 415(m) benefit plan participant receiving an allowance from the retirement system pursuant to Chapter 70, RSMo, is entitled to a monthly benefit under the section 415(m) benefit plan in an amount equal to the section 415(m) benefit plan participant’s unrestricted benefit less the maximum benefit. In no event shall a retiree or beneficiary receive a total monthly allowance from the retirement system and the section 415(m) benefit plan in excess of the monthly allowance he or she would have been entitled to receive from the retirement system under Chapter 70, RSMo without giving effect to the limits imposed by section 415 of Title 26 of the United States Code. (3) Any benefit to which a retiree or beneficiary is entitled pursuant to this rule shall be paid at the same time and in the same manner as the benefit would have been paid from the retirement system if the payment of the benefit from the retirement system had not been subject to the limits imposed by section 415 of Title 26 of the United States Code. (4) Any other provision of law to the contrary notwithstanding, contributions may not be accumulated under the section 415(m) benefit plan to pay future monthly benefits to section 415(m) benefit plan participants. Instead, a portion of each payment of employer contributions made to the retirement system pursuant to the provisions of section 70.730, RSMo shall be paid to the section 415(m) benefit plan in an amount necessary to satisfy the retirement system’s obligation to pay section 415(m) benefit plan participants the amount calculated pursuant to section (2), above, as those amounts become due and payable, as well as those amounts needed to pay reasonable expenses necessary to administer the section 415(m) benefit plan. (5) The section 415(m) benefit plan is a separate component of the retirement system plan qualified pursuant to section 401(a) of Title 26 of the United States Code and is maintained solely for the purpose of funding and providing benefits to retirees and beneficiaries when the retirees’ or beneficiaries’ unrestricted benefits would otherwise exceed the limits imposed by section 415 of Title 26 of the United States Code. (6) A member, retiree, or beneficiary of the retirement system may not directly or indirectly elect to defer payment of benefits or allowances payable pursuant to this rule. (7) The section 415(m) benefit plan shall be administered in the same manner as the retirement system, pursuant to section 70.605, RSMo. AUTHORITY: section 70.605.21, RSMo Supp. 2004*. Original rule filed Nov. 17, 2004, effective May 30, 2005. *Original authority: 70.605, RSMo 1967, amended 1974, 1992, 2000, 2003.