Separation from Service Before Retirement

PURPOSE: This rule describes the effect of a separation from service on a participant’s benefit. (1) Upon separation from service, any participant with less than eight (8) vested years of service shall forfeit all rights under the plan, including the participant’s creditable service as of the date of the participant’s separation from service. This forfeiture shall be applied to reduce the board’s obligation to contribute to the plan. Such a participant will receive a refund of any of his or her contributions upon the receipt by the board or its designee of a termination notice; provided, however, that if the amount of a participant’s accumulated contributions is in excess of one thousand dollars ($1,000), then any such refund of contributions may not be made prior to the earliest of the participant’s death or normal retirement age (age sixty-two (62)) without the participant’s written application to the board consenting to his or her accumulated contributions being distributed from the plan. Such refund shall be made to the participant in a single sum as soon as administratively feasible following receipt of the termination notice and, if applicable, the participant’s written application requesting distribution, by the board (or its designee). In the event that a participant whose accumulated contributions exceed one thousand dollars ($1,000) does not consent to the distribution of his or her accumulated contributions when first eligible to do so, or at any subsequent time prior to attaining his or her normal retirement age (age sixty-two (62)), his or her contributions shall be distributed to him or her as soon as administratively feasible following the first day of the month after attaining his or her normal retirement age (age sixty-two (62)); or, if such participant is deceased, such contributions shall be distributed to his or her surviving spouse or, if none, then in equal shares to the participant’s surviving children, or, if there are no surviving children, then to his or her estate, as soon as administratively feasible following the first day of the month after the receipt by the board or its designee of a notice of death from such participant’s employer, or such other form of proof acceptable to the board. For purposes of this section, it shall not be administratively feasible for the board or its designee to disburse a refund until the board or its designee also receives proper verification and reconciles salaries, hours and contribution information obtained from the employer. (2) A participant who has a separation from service, before reaching the age of sixty-two (62), after having earned at least eight (8) vested years of service shall be entitled to a deferred vested benefit, determined in accordance with the formula described in 16 CSR 50-2.090. The participant may elect to defer the receipt of his or her deferred vested benefit, until the participant’s attainment of age sixty-two (62), or the participant may elect to begin receiving his or her deferred vested benefit on the first day of any month following the later of the date of separation from service or age fifty-five (55). The amount of the benefit, if paid before the participant’s sixty-second birthday, shall be the actuarial equivalent of the participant’s accrued benefit. (3) Members who terminate employment and then resume employment with an employer within thirty (30) days will not forfeit their prior service, will not be required to receive a refund of their payroll contributions and will not be deemed to have been rehired. AUTHORITY: section 50.1032, RSMo 2000.* Original rule filed Oct. 11, 1995, effective May 30, 1996. Amended: Filed Sept. 17, 1998, effective March 30, 1999. Rescinded and readopted: Filed Sept. 29, 2000, effective March 30, 2001. Amended: Filed Dec. 10, 2002, effective June 30, 2003. Amended: Filed Nov. 10, 2005, effective May 30, 2006. *Original authority: 50.1032, RSMo 1995.