§ 3-422. DISSOLUTION OR LEGAL SEPARATION OR TERMINATION PRIOR TO A MEMBER'S RETIREMENT.

(a)

Separate account option.

(1)

Purpose. The purpose of the separate account option is to permit a member and an alternate payee to divide the member's retirement allowance and benefits (including statutorily provided monthly installments payable after a member's death to his or her surviving spouse, surviving domestic partner, children or parents) prior to retirement into separate and distinct accounts for the member and for the alternate payee, as set forth in a court order which meets the requirements of Section 3-421 and this Section 3-422.

(2)

Court Order. In the event of a legal separation or dissolution or termination, the Board shall comply with a court order incident thereto which contains the following provisions:

(i)

The division of the accumulated member contributions and credited service applicable to periods of service during the marriage or domestic partnership into two separate and distinct accounts in the name of the member and the alternate payee;

(ii)

The right of the alternate payee to elect an option under Section 3-417 and designate a beneficiary with respect to the alternate payee's separate account;

(iii)

The right of the alternate payee to a refund of accumulated contributions in the alternate payee's separate account;

(iv)

For purposes of determining the amount of any retirement allowance payable to the alternate payee, the average compensation (as defined in Section 2-401(a)(2) shall be determined solely by the compensation earnable (as defined in Section 3-301(b)(4) by the member during the period of marriage or domestic partnership;

(v)

For purposes of applying the benefit formula of Section 3-411 for determining the amount of any retirement allowance payable to the alternate payee, the age of the alternate payee shall be used.

(3)

Refund of Contributions to an Alternate Payee.

(i)

An alternate payee who has been awarded a separate account shall possess the right to a refund of accumulated member contributions in that separate account at any time after the court order has been filed with the Retirement System.

(ii)

The alternate payee shall file a written application with the Retirement System on a form provided by the System to obtain the refund.

(iii)

Upon filing the application for a refund with the Retirement System, the alternate payee shall from that point on be deemed to have permanently waived any and all rights the alternate payee may have possessed in the Retirement System based on the member's employment, including any and all rights to any benefit or retirement allowance or any survivor benefits.

(iv)

If, as of the date of separation of the member and his or her spouse or the equivalent date for a domestic partnership as determined in the court proceedings, the member did not possess sufficient credited service to retire for service, then the alternate payee's only form of payment under this separate account option will be a refund of the accumulated member contributions allocated to his or her separate account.

(v)

If an alternate payee has withdrawn his or her portion of the accumulated member contributions, the alternate payee shall not be allowed to redeposit those contributions with the Retirement System.

(4)

Retirement of Alternate Payee. An alternate payee shall be deemed to be retired only if:

(i)

The alternate payee files a written application with the Retirement System on a form provided by the System;

(ii)

The member and the alternate payee have both attained the minimum age required for a service retirement; and

(iii)

On the date of separation of the member and the alternate payee or the equivalent date for a domestic partnership as determined in the court proceedings, the member possessed sufficient credited service to retire for service. A member who possessed sufficient credited service to retire before the division shall be deemed to continue to do so after the division, and so shall the alternate payee.

(5)

Calculation of the Alternate Payee's Retirement Allowance.

(i)

The alternate payee's retirement allowance shall consist of an annuity based upon the alternate payee's accumulated contributions and a pension based upon the alternate payee's service. Only the compensation earnable by the member during the period of marriage or domestic partnership and prior to the date of separation shall be used to determine average compensation.

(ii)

The alternate payee's retirement allowance shall be eligible for cost-of-living increases under this Article 4.

(iii)

No survivor or death benefits will be payable upon the death of the alternate payee, and such alternate payee upon remarriage or reestablishment of domestic partnership shall not be entitled to elect any of the optional forms of benefit.

(6)

Death of Alternate Payee Prior to Retirement of Alternate Payee. If the alternate payee dies prior to retirement, then the accumulated contributions in the alternate payee's separate account shall be paid to the alternate payee's beneficiary as designated to the Retirement System on a form provided by the System. If a beneficiary has not been designated at the time of death or if the designated beneficiary is not living at the time of death, the accumulated contributions shall be paid to the alternate payee's estate. No other death benefits will be payable as a result of the death of the alternate payee.

(b)

Combined Account Option. The Retirement System will comply with a court order incident to a legal separation or dissolution or termination which divides the community property interests of a member and the alternate payee, provided that:

(1)

The alternate payee's interest is not to be paid before the member retires or dies, and

(2)

The court order complies with the provisions set forth in Section 3-421, including the provision that the alternate payee will not be considered to be a surviving spouse or surviving domestic partner under Section 3-415 or any other Section of this Article 4.

(3)

The court order may provide that the alternate payee's interest in the member's retirement allowance be paid over the lifetime of the member under the optional form of payment allowed by the System and selected by the member.

(i)

With respect to the alternate payee's interest in the member's retirement allowance, the alternate payee may on a form provided by the System designate a permitted beneficiary as set forth in Section 3-421. If the alternate payee predeceases the member, the person so designated shall receive until the member's death the benefit previously paid to the alternate payee.

(ii)

If a benefit is payable under Section 3-408 or 3-415 upon the member's death, as long as payments are payable under those provisions, one-half of the community property share thereof may be payable to the alternate payee or a permitted beneficiary as set forth in Section 3-421(b)(3) of the alternate payee.

(iii)

If the member predeceases the alternate payee and the member has chosen option 2 or 3, the alternate payee or the permitted beneficiary as set forth in Section 3-421(b)(3) of the alternate payee may receive, as long as payments are payable under the selected option, one-half of the community property share of that portion of the allowance which would be continued after the member's death, regardless of dependents.

(4)

In lieu of the payment method specified in subsection (3) above, the court order may provide that the alternate payee's interest in the member's retirement allowance be paid under any optional form of payment allowed by the Retirement System over the lifetime of the alternate payee (instead of over the lifetime of the member), provided that,

(i)

The sum of the actuarial present values of the member's and his or her alternate payee's allowances payable as single life annuities shall not exceed the actuarial present value of the member's allowance had they been payable to the member, assuming the member had never been married to the the alternate payee or had never established a domestic partnership with the alternate payee; and

(ii)

No survivor benefits under Section 3-415 or any other Section of this Article 4 are payable to the surviving spouse of the alternate payee.

(5)

In the absence of a qualifying surviving spouse, qualifying domestic partner, unmarried children under the age of eighteen or children under the age of eighteen not members of domestic partnerships, disabled child qualified under Section 3-415(c), or dependent parents, the court order may provide for the division of the community property interest in the death benefit under Section 3-408. (Added Ord. 94-28, § 4, eff. 5-27-94; Am. Ord. 94-37, § 1, eff. 6-24-94; Am. Ord. 95-42, §§ 18, 19, eff. 6-23-95; Am. Ord. 2002-11, § 5, eff. 3-19-02; Am. Ord. 2004-101, § 2, eff. 11-15-04; Am. Ord. 2006-16, § 8, eff. 3-10-06).