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SENATE FLOOR VERSION
March 1, 2023
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 634 By: Montgomery
[ Teachers’ Retirement System of Oklahoma -
retirement benefits - forms - payment - benefit
amount - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 70 O.S. 2021, Section 17 -105, is
amended to read as follows:
Section 17-105. (1) (a) Any member who has attained age
fifty-five (55) or who has completed thirty (30) y ears of creditable
service, as defined in Section 17-101 of this title, or for any
person who initially became a member prior to July 1, 1 992,
regardless of whether there were breaks in service after July 1,
1992, whose age and number of years of creditabl e service total
eighty (80) may be retired upon proper application for reti rement on
forms established by the Teachers’ Retirement System of Oklahoma and
executing a retirement contract. Such a retirement date will also
apply to any person who became a me mber of the sending system as
defined in this act Section 17-101 et seq. of this title, prior to
July 1, 1992, regardless of whether there were b reaks in service
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after July 1, 1992. Any person who became a m ember after June 30,
1992, but prior to November 1, 2011, whose age and number of years
of creditable service total ninety (90) may be retired upon pr oper
application for retirement and executi ng a retirement contract. Any
person who becomes a member on o r after November 1, 2011, who
attains the age of sixty-five (65) years or who reaches a normal
retirement date pursuant to subparagraph (d) of paragra ph (24) of
Section 17-101 of this title hav ing attained a minimum age of sixty
(60) years may be retired u pon proper application for retirement and
executing a retirement contract. The application shall be filed on
the form provided by the Board of Truste es for this purpose, not
less than sixty (60) days before the date of retirement, provided
that the Executive Director may waive the sixty -day deadline for
good cause shown as defined by the Board.
1. The employer shall provide t he System with the
following information for a retiring member, no lat er
than the fifteenth day of the month of retirement:
last day physically on the job; last day on payroll;
any regular compensation not already reported to the
System; and final unused sick leave balance.
2. Failure to submit this information by the deadli ne, or
errors in submitted information that result in a
disqualification of retirement eligibility shall be
the responsibility of the employer. In cases where
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the error results in disq ualification of retirement
eligibility, it is the employer ’s responsibility to
reemploy the member, or retain the member on the
payroll, for the time period required to reach
eligibility, not exceeding two (2) months.
(b) An individual who becomes a membe r of the Teachers’
Retirement System on or after November 1, 2017, shal l be employed by
the public schools, state colleges or universi ties of Oklahoma for a
minimum of seven (7) yea rs and be a contributing member of the
Teachers’ Retirement System of Oklah oma for a minimum of seven ( 7)
years to qualify for monthly retirement benefits from the Teachers ’
Retirement System of Oklahoma.
(c) Any member with seven (7) or more years of Okl ahoma
teaching service and whose accumulated contributions during such
period have not been withdrawn s hall be given an indefinite
extension of membership beginning with the sixth year following his
or her last contributing membership and shall become elig ible to
apply for retirement and be retired upon attaining age fifty -five
(55).
(2) An unclassified op tional member who has retired or who
retires at sixty-two (62) years of age or older or whose retirement
is because of disability shall have his or her m inimum retirement
benefits calculated on an average salary of Five Thousand Three
Hundred Fifty Dollars ($5,350.00) or, if a larger monthly allowa nce
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would result, an amount arrived at pursuant to application of the
formula prescribed herein.
(3) No member shall receive a lesser retirement benefit than he
or she would have recei ved under the law in effect at the time he or
she retired. Any individ ual under the Teachers ’ Retirement System,
who through error in stating the title of the position which he or
she held, may, at the discretion of the Board of Trustees, be
changed from the nonclassified optional g roup to the classified
group for the purpos e of calculating retirement benefits.
Any individual regardless of residence, who has a minimum of ten
(10) years of teaching in Oklahoma schools prior to July 1, 1943, or
who taught in Oklahoma schools prior to 1 934 and thereafter taught a
minimum of ten (10) years and who does not qualify under the present
retirement System system, or who has a minimum of thirty (30) years
of teaching in Oklahoma schools and has reached seventy (70) ye ars
of age prior to July 1, 1984, a nd is not otherwise eligible to
receive any benefits from the retirement system shall receive a
minimum of One Hundred Fifty Dollars ($150.00) per month in
retirement benefits from the Teachers ’ Retirement System of Oklah oma
plus any general increase in be nefits for annuitants as may be
provided hereafter by the Legislature. Each individual must apply
to the Teachers’ Retirement System for such ben efit and provide
evidence to the Teachers ’ Retirement System that the servi ce was
actually rendered. The surv iving spouse of any person who made
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application for the benefit provided for by this paragraph during
his or her lifetime but did not receive the benefit may submit an
application to the System for payment of the benefit for those
months during the lifetim e of the deceased person that he or she was
eligible for but did not receive the benefit. Upon approval of the
application by the Board of Truste es, the benefit shall be paid to
the surviving spouse in one lump sum .
(4) The value of each year of prior service is the total
monthly retirement benef it divided by the number of years of
creditable service.
(5) Upon application of a member who is activ ely engaged in
teaching in Oklahoma or his or her employer, any member who has been
a contributing member fo r ten (10) years may be retired by the
System subsequent to the execution and filing thereof, on a
disability retirement allowance, provided that it is found by the
Medical Board after medical examination of such member by a duly
qualified physician that s uch member is mentally or physically
incapacitated for further performance of duty, that such incapacity
is likely to be permanent, and that such me mber should be retired.
The System shall rely on and give full considerati on to the
conclusions and recomme ndations in the certified written report of
the Medical Board of the Teachers ’ Retirement System regarding t he
disability application of such member . If the Medical Board does
not find that a member applying for disability retirement is
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mentally or physically incapacitated for performance of duty or
otherwise eligible for a disability retirement, the applicatio n
shall then be considered by the Board of Trustees. If a member is
determined to be eligible for disability benef its pursuant to the
Social Security System system, then such determination shall enti tle
the member to the authorized disability retirement allowanc e
provided by law. For members w ho are not eligible for disability
benefits pursuant to the Social Security System system, the Board of
Trustees and the Medical Board shall apply the same standard fo r
which provision is made in the first two sentences of this
subsection for determining t he eligibility of a person for such
disability benefits in making a determi nation of eligibility for
disability benefits a s authorized by this subsection.
(6) (a) A member who at the time of retirement has been found
to be permanently physically or menta lly incapacitated to perform
the necessary duties to continue in his or her current position
shall receive a minimum month ly retirement payment for life or until
such time as the member may be found to be recovered to the point
where he or she may return t o teaching. Any member retired before
July 1, 1992, shall be eligible to r eceive the monthly retirement
allowance herein provided, but such payment shall not begin un til
the first payment due him or her after July 1, 1992, and sh all not
be retroactive. The Board of Trustees is empowered to make such
rules and regulations as it considers proper to preserve equity in
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retirements under this provision, which shall include a provision to
protect the rights of the member ’s spouse.
(b) A member who has qualifie d for retirement benefits under
disability retirement shall have the total monthly payment deducted
from his or her accumu lated contributions plus interest earned and
any money remaining in the member ’s account after the above
deductions at the death of th e member shall be paid in a lump sum to
the beneficiary or to the estate of the member. Provided, if the
deceased disabled member had thirty (30) years or more of cre ditable
service and the death occurred after June 30, 1981, and death
occurred prior to the disabled member receiving twelve monthly
retirement payments, a survivin g spouse may elect to receive the
retirement benefit to which the deceased member would have been
entitled at the time of death under the Option 2 Plan of Retirement
provided for in subsection (8) of this section in lieu of the death
benefit provided for i n this subsection and in subsection (12) of
this section.
(c) Once each year the System may require any disabled
annuitant who has not yet attained the ag e of sixty (60) years to
undergo a medical examination, such examination to be made at the
place of residence for the disabled annuitant or other pl ace
mutually agreed upon by a physician or ph ysicians designated by the
System. Should any disabled annuita nt who has not yet attaine d the
age of sixty (60) years refuse to submit to at least one medical
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examination in any such year by a physician or phys icians designated
by the System his or her al lowance may be discontinued until he or
she submits to such exa mination.
(d) Should the Medical Board report and certify to the Board of
Trustees that such disable d annuitant is engaged in or is able to
engage in a gainful occupation paying more than the difference
between his or her retirement allowance and the aver age final
compensation, and should the Board of Trustees concur in such report
then the amount of his or her pension shall be reduced to an amount
which, together with his or her retirement all owance and that amount
earnable by him or her, shall equal the amount of his or her avera ge
final compensation. Should his or her earning capacity be later
increased, the amount of his or her pension may be fur ther modified,
provided the new pension shall not exceed that amount of the pension
originally granted nor a n amount, which when added to the amount
earnable by the member, together with his or her annuity, eq uals the
amount of his or her average final com pensation.
(e) Should a disabled annuitant b e restored to active service,
his or her disability retirement allowance shall cease and he or she
shall again become a member of the Teachers ’ Retirement System an d
shall make regular contributions as required under this article.
The unused portion of hi s or her accumulated contributions shall be
reestablished to his or her credit in the Tea chers’ Savings Fund.
Any such prior service certificates on the basis of w hich his or her
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service was computed at the tim e of his or her retirement shall be
restored to full force and effect.
(7) Should a member before retiremen t under Section 1-101 et
seq. of this title make application for withdrawal duly filed with
the System, not earlier than four (4) months after the d ate of
termination of such service as a teach er, the contribution standing
to the credit of his or her indiv idual account in the Teach ers’
Savings Fund shall be paid to him or her or, in the event of his or
her death before retirement, shall be paid to suc h person or persons
as he or she shall have n ominated by written designation, duly
executed and filed with t he System; provided, howev er, if there be
no designated beneficiary surviving upon such death, such
contributions shall be paid to his or her admini strators, executors,
or assigns, together wit h interest as hereinafter provided .
In lieu of a lump-sum settlement at the death of the member, the
amount of money the member has on deposit in the Teachers ’ Savings
Fund and the money the member has on depo sit in the Teachers’
Deposit Fund may be paid i n monthly payments to a designated
beneficiary, who must be th e spouse, under the Maximum or Option 1
Plan of Retirement providing the monthly payment shall be not less
than Twenty-five Dollars ($25.00) per mo nth. The monthly payment
shall be the actuaria l equivalent of the amount becoming due at the
member’s death based on the sex of the spo use and the age the spouse
has attained at the last birthday prior to the m ember’s death.
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Provided further, if there be no designated beneficiary surviving
upon such death, and the contributions standing to the credit of
such member do not exceed Two Hund red Dollars ($200.00), no part of
such contributions shall be subject to th e payment of any expense of
the last illness or funeral of the deceased member or any expens e of
administration of the estate of such deceased and the Sys tem, upon
satisfactory proof of the death of such member and of the name or
names of the person or per sons who would be entitled to receive such
contributions under the laws of descent and distr ibution of the
state, may authorize the payment of accumulated contributions to
such person or persons. A member terminating his or her membership
by withdrawal after June 30, 2003, shall have the interest co mputed
at a rate of interest determined by the Board of Trustees and paid
to him or her subject to the follow ing schedule:
(a) If termination occurs within sixteen (16) years from the
date membership began, fif ty percent (50%) of such interest
accumulations shall be paid.
(b) With at least sixteen (1 6) but less than twenty -one (21)
years of membership, sixty pe rcent (60%) of such interes t
accumulations shall be paid.
(c) With at least twenty -one (21) but less than twenty-six (26)
years of membership, sev enty-five percent (75%) of such interest
accumulations shall be paid.
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(d) With at least twenty -six (26) years of membership, ninety
percent (90%) of such interest accumulations shall be paid.
In case of death of an active member, the interest shall be
calculated and restored to the member ’s account and paid to his or
her beneficiary.
(8) (a) In lieu of his or her retirement allowance pa yable
throughout life for such an amount as determined under this section,
the member may select a retirement allowance for a reduced amount
payable under any of the f ollowing options the present value of
which is the actuarial e quivalent thereof.
(b) A member may select the option under which he or she
desires to retire at the end of the school year in which he or she
attains age seventy (70) and the option shall be b inding and cannot
be changed. Provided further that if a memb er retires before age
seventy (70), no election of an option shall be effective in case an
annuitant dies before the first payment due under such o ption has
been received.
(c) The first payment of any benefit selected shall be made on
the first day of the month following approval o f the retirement by
the System. If the named designated joint annuitant un der Option 2
or 3 Plan of Retirement dies at any time after the member’s
retirement date, but before the death of the member, the member
shall return to the retirement benef it, including any post
retirement postretirement benefit increases the member would have
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received had the member not selected Option 2 or 3 Plan of
Retirement of this subsection. T he benefit shall be determined a t
the date of death of the designated joint annuita nt. This increase
shall become effective the first day of the month follow ing the date
of death of the designated joint annuitant, and shall be payable for
the member’s remaining lifetime. The member sha ll notify the
Teachers’ Retirement System of Oklaho ma of the death of the
designated joint annuitant in writing. In the absen ce of the
written notice being filed by the member notifying the Teachers ’
Retirement System of Ok lahoma of the death of the desig nated joint
annuitant within six (6) months of the date of death, nothing in
this subsection shall require the Teachers ’ Retirement System of
Oklahoma to pay more than six (6) months of retrospective benefits
increase.
Option 1. If he or she dies before h e or she has received in
annuity payments the prese nt value of his or her annuity as it was
at the time of his or her retireme nt, the balance shall be paid to
his or her legal representatives or to such person as he or she
shall nominate by written designa tion duly acknowledged and filed
with the System at the time of his or her retirement; or
Option 2. A member takes a reduced retirement allowance for
life. Upon the death of the member the payments shall continue to
the member’s designated joint annuitan t for the life of the joint
annuitant. The written designation of the joint annuitant must be
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duly acknowledged and filed wit h the System at the time of the
member’s retirement and, except as provided in paragraph (e) of th is
subsection, cannot be changed after the effective date of the
member’s retirement; or
Option 3. A member receives a reduced retirement allowance for
life. Upon the death of the member one -half (1/2) of the retirement
allowance paid the member shall be continued throughout the life o f
the designated joint annuitant. A written design ation of a joint
annuitant must be duly acknowledged and filed with the Sys tem at the
time of the member’s retirement and, except as provided in paragraph
(e) of this subsection, cannot be changed after th e effective date
of the member’s retirement; or
Option 4. Some other benefit or benefits shall be paid either
to the member or to such joint annuitant as he or she shall
nominate, provided such other benefit or benefits, to gether with the
reduced retirement allowance, shall be certified by the actuary to
be of equivalent actuarial value to his or her retirement allowance
and shall be approved by the System.
(d) Provided that Option 2 Plan of Retirement and Option 3 Plan
of Retirement shall not be available if t he member’s expected
benefit is less than fifty percent (50%) of the lump-sum actuarial
equivalent and the de signated joint annuitant is not the spouse of
the member.
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(e) A member who chose the maximum retirement benefit plan at
the time of retirement may make a one-time election to cho ose either
Option 2 or 3 Plan of Retirement and name the member’s spouse as
designated joint annuitant if the member marries after making the
initial election. Such an election shall be made within one (1)
year of the date of marriage. The m ember shall provide proof of a
member’s good health before the System will permit a change to
either Option 2 or 3 Plan of Retirement and the naming of a
designated joint annuitant. A medical examination conducted by a
licensed physician is required for purposes of determin ing good
health. Such examination must be approved by the Medical Board.
The member shall be required to pr ovide proof of age for the new
joint annuitant. The System shall adjust the monthly benefit to the
actuarially equivalent amount based on the new designated joint
annuitant’s age. The Board of Trustees shall promulgate rules to
implement the provisions o f this subsection.
(f) A member who retires after the effective date of this act
July 1, 2010, and has selected a retirement allowance for a reduced
amount payable under one of the options pro vided for in this
subsection may make a one-time irrevocable election to sele ct a
different option within sixty (60) days of the member ’s retirement
date. The beneficiary or joint annuitant designated by the member
at the time of retirement shall not be c hanged if the member makes
the election provided for in this paragraph.
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(g) Any individual who is eligible to be a beneficiary or joint
annuitant of a member under this subsection, and who is also a
beneficiary of a trust created under the Oklahoma Discre tionary and
Special Needs Trust Act, Section 175.81 et seq. of Title 60 of th e
Oklahoma Statutes, or a comparable Trust Act created under the laws
of another state, hereinafter collectively referred to as “Trust
Acts”, may be a beneficiary or joint annuita nt under this subsection
by having the trustee of the trust established for t he benefit of
that individual named as the legal beneficiary or joint annuitant
under this subsection. The age of that beneficiary shall be used
for calculating any benefit payab le to the trust under this
subsection. The beneficiary of such a trust shall be treated as the
beneficiary or joint annuitant under this subsection except that
payments of any benefits due under this subsection shall be payable
to the lawfully appointed t rustee of the trust. The obligation of
the System to pay the beneficiary or joint annuitant under this
subsection shall be satisfied by payment to the trustee whom the
System, in good faith, believes to be the lawful ly appointed
trustee. Any conflict bet ween the statutes creating and gover ning
the Teachers’ Retirement System in S ection 17-101 et seq. of this
title and the provisions of any Trust Act referred to above shall be
resolved in favor of the statutes governi ng the System. If an
eligible beneficiary or joint annuitant is named at t he time of
retirement, and becomes a bene ficiary of a trust under one of the
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Trust Acts described herein after that time, the System will
acknowledge the trust as the beneficiary up on the submission of
adequate documentation of the existence of the trust. All other
provisions of this subsection shall apply to these subsequently
created trusts.
(h) The Board of Trustees of the System may recognize other
trusts set up for the benefit of individuals otherwise eligible to
be named as a beneficiary or joint an nuitant under this subsection
by administrative rule if it can be done without undue additional
administrative expense of the System.
(9) The governing board of any “public school”, as that term is
defined in Section 17 -101 of this title, is hereby author ized and
empowered to pay additional reti rement allowances or compensation to
any person who was in the employ of such public school for not less
than seven (7) school years precedi ng the date of his or her
retirement. Payments so made shall be a proper c harge against the
current appropriation o r appropriations of any such public school
for salaries for the fiscal year in which such payments are made.
Such payments shall be made in regular monthly installments in such
amounts as the governing board of any such public school, in its
judgment, shall determine to be reasonable and appropriate in view
of the length and type of service rendered by any such person to
such public school by which such person was employed at the time of
retirement. All such additi onal payments shall be uniform, based
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upon the length of service and the type of services performed, to
persons formerly employed by such public school who have retired or
been retired in accordance with the provisions o f Section 17-101 et
seq. of this title.
The governing board of any such publi c school may adopt rules
and regulations of general application outlining the terms and
conditions under which such additional retirement be nefits shall be
paid, and all decisions of such board shall be final.
(10) In addition to the teachers ’ retirement herein provided,
teachers may voluntarily avail themselves of the Federal federal
Social Security Program program upon a district basis.
(11) Upon the death of an in-service member, the System s hall
pay to the designated beneficiary of the member or, if there is no
designated beneficiary or if the designated beneficiary predeceases
the member, to the estate of the member, the sum of Eighteen
Thousand Dollars ($18,000.00) as a death benefit. Prov ided, if the
deceased member had ten (10) years or more of creditable service ,
the member’s designated beneficiary may elect to receive the
retirement benefit to which the deceased member would have be en
entitled at the time of death under the Option 2 plan of retirement
Plan of Retirement in lieu of the death benefit provided for in this
subsection. Provided further, the option provided in this
subsection is only available when the member has designat ed one
individual as the designated benefi ciary. The beneficiary or
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beneficiaries of death benefits in the amount not to exceed Eighteen
Thousand Dollars ($18,000.00), but exclusive of any retirement
benefit received by an electing beneficiary based upon creditable
service performed by the deceas ed member, which are provided
pursuant to this subsection may elect to disclaim such death
benefits in which case such benefits will be transferred to a person
licensed as a funeral director or to a lawfully recogn ized business
entity licensed as required by law to provide funeral servic es for
the deceased member. The qualified disclaimer must be in writing
and will be an irrevocable and an unqualified refusal to accept all
or a portion of the death benefit. It must shall be received by the
transferor no more than nine (9) months one (1) month after the
later of the day the transfer creating the interest in the
disclaiming person i s made or the day the disclaiming person attains
age twenty-one (21). The interest i n the death benefits must pass
without direction by the disclaiming person to another person.
Death benefits under this subsection shall be paid to the
beneficiary or beneficiaries of the dece ased member not later than
one (1) month from the date of receipt of the death certificate
certifying the member’s death. Upon notice of the death of a
member, the System shall send any required forms or applications
necessary for payment of the death benefit not later than one (1)
week from the date of the member’s death, and all forms and
applications shall be available on a publicly accessible website.
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(12) Upon the death of a retired member who has contributed to
the System, the retirement system shall pay to the designated
beneficiary of the member or, if there is no designated beneficiary
or if the designated beneficiary predeceases the member, to the
estate of the member, the sum of Five Thousand Dollars ($5,000.00)
as a death benefit. The beneficiary or beneficiaries of benefits
provided pursuant to this subs ection may elect to disclaim such
death benefits in which case such benefi ts will be transferred to a
person licensed as a funeral director or to a lawfully recognized
business entity licensed as required by law to provide funeral
services for the deceased member. The qualified disclaimer must be
in writing and will be an irrev ocable and an unqualified refusal to
accept all or a portion of the death benefit. It must shall be
received by the transferor no more than nine (9) months one (1)
month after the later of the day the transfer creating the interest
in the disclaiming pers on is made or the day the disclaiming person
attains age twenty-one (21). The interest in the death benefits
must pass without direction by the disclaiming person to another
person. All death benefits under this subsection shall be paid to
the beneficiary or beneficiaries of the deceased member not later
than one (1) month from the date of the member’s death. Upon
receipt of a certified death certificate certifying the death of a
member, the System shall send any forms or applications necessary
for payment of the death benefit not later than one (1) week from
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the date of receipt of the cer tified death certificate , and all
required forms and applications shall be available on a publicly
accessible website. The benefit payable pursuant to this subsection
shall be deemed, for purposes of federal income taxation, as life
insurance proceeds and not as a death benefit if th e Internal
Revenue Service approves this provision pursuant to a p rivate letter
ruling request which shall be submitted by the Board of Trus tees of
the System for that purpose.
(13) Upon the death of a member who dies leaving no living
beneficiary or having designated his or her estate as beneficiary,
the System may pay any applicable death benefit, unpaid
contributions, or unpaid benefit whi ch may be subject to probate, in
an amount of Twenty-five Thousand Dollars ($25,000.00) or less,
without the intervention of the probate court or probate procedure
pursuant to Section 1 et seq. of Title 58 of the Oklahoma Statutes.
(a) Before any applicab le probate procedure may be waived, the
System must be in receipt of the member ’s proof of death and the
following documents from those persons claiming to be the legal
heirs of the deceased member:
1. The member’s valid last will and testament, trust
documents or affidavit that a will does not exist;
2. An affidavit or affidavits of heirship which must
state:
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a. the names and signatures of all claiming heirs to
the deceased member’s estate including the
claiming heirs’ names, relationship to the
deceased, current addresses, tax I.D. numbers if
known and current telephone numbers,
b. a statement or statements by the clai ming heirs
that no application or petition for the
appointment of a personal representative is
pending or has been granted in any jurisdicti on,
c. a description of the personal property claimed,
(i.e., death benefit or unpaid contributions or
both) together with a statement that such
personal property is subject to proba te,
d. a statement by each individual claiming heir
identifying the amount of personal property that
the heir is claiming from the System, and that
the heir has been notified of, is aware of and
consents to the identified claims of all the
other claiming heirs of the deceased member
pending with the System;
3. A written agreement or agreements signed by all
claiming heirs of the deceased member which provides
that the claiming heirs release, discharge and hold
harmless the System from any and all liability,
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obligations and costs which it may incur as a result
of making a payment to any of the deceased member’s
heirs;
4. A corroborating affidavit from an individual other
than a claiming heir, w ho was familiar with the
affairs of the deceased member;
5. Proof that all debts of the deceased member, including
payment of last sickness, hospital, medical, death,
funeral and burial expenses have been paid or provided
for.
(b) The Executive Director o f the System shall retain complete
discretion in determining which requests for probate waiver may be
granted or denied, for any reason. Sh ould the System have any
question as to the validity of any document presented by the
claiming heirs, or as to any s tatement or assertion contained
therein, the probate requirement p rovided for in Section 1 et seq.
of Title 58 of the Oklahoma Statutes shal l not be waived.
(c) After paying any death benefits or unpaid contributions to
any claiming heirs as provided purs uant to this subsection, the
System is discharged and released fro m any and all liability,
obligation and costs to the same extent as if the System had dealt
with a personal representative of the deceased member. The System
is not required to inquire into the truth of any matter specified in
this subsection or into the payment of any estate tax liability.
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(14) Upon the death of a retired mem ber, the benefit payment
for the month in which the retired member died, if not previously
paid, shall be made to th e joint annuitant if still living, to the
beneficiary of the membe r if the joint annuitant is deceased, or to
the member’s estate if there is no surviving joint annuitant or
beneficiary. Such benefit payment shall be made in an amount equal
to a full monthly benefit payment regardless of the day of the month
in which the retired member died.
SECTION 2. AMENDATORY 70 O.S. 2021, Section 17-105.2, is
amended to read as follows:
Section 17-105.2. A. 1. A member of the Teachers’ Retirement
System of Oklahoma who is eligible to retire wi th at least thirty
(30) years of creditable service may elect to receive a partial
lump-sum payment on the date of retirement and a reduced annuity.
2. On and after the effective date of this act, a member who is
eligible to retire with at least tw enty (20) years of creditable
service may elect to receive a partial lump-sum payment on the date
of retirement and a reduced annu ity.
B. 1. The partial lump-sum payment shall be an amount equal to
the unreduced retirement benefit, which shall be referred to as the
“Maximum Retirement Allowance” for purposes of this section, which
would have been paid over a period of twelve (12), twenty -four (24),
or thirty-six (36) months, had the lump -sum option not been elected.
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2. The partial lump-sum payment made pursuant to paragraph 2 of
subsection A of this section shall be an amount equal to one -half
(1/2) of the unreduced retirement benefit, which would have been
paid over a period of twe lve (12), twenty-four (24), or thirty-six
(36) months, had the lump-sum option not been elected.
C. Once the payout amount is elected, a reduced Maximum
Retirement Allowance is then calculated using factors adopted by the
Board of Trustees based upon the System ’s actuarial expected rate of
return and the member’s age at retirement and the payout option
(twelve (12), twenty-four (24), or thirty-six (36) months) elected .
This reduced Maximum Retirement Allowance shall also be reduced in
accordance with any retirement options the mem ber has elected
pursuant to Section 17-105 of Title 70 of the Oklahoma Statutes this
title.
B. D. The partial lump-sum payment, pursuant to this section,
shall be paid in a check separate from the regular monthly
retirement benefit. The total amount of t he partial lump-sum
payment shall be deducted from the member’s account balance
consisting of the employee contributions plus interest for purposes
of determining unused contributions remaining in the account. The
member may elect to rollover the taxable portion of the partial
lump-sum payment to an eligible retirement plan or individual
retirement account (IRA). The nont axable portion of th e partial
lump-sum payment can be rolled over to an IRA or another qualified
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retirement plan as allowed by the Inter nal Revenue Code and
regulations. This partial lump -sum payment shall be subject to
federal income tax in accordance wi th the Internal Reve nue Code
Section 72 and other such Internal Revenue Code sections and
regulations as may be applicable. This partia l lump-sum benefit is
subject to the same restrictions for assignment and attachment as
all other retirement benefits. The appropriate port ion of the
partial lump-sum distribution will be reported to the Internal
Revenue Service (IRS) as taxable income an d appropriate tax
withholdings will be withheld unless the member elects to make a
direct rollover of the taxable portio n of the funds. Sho uld the
member have after-tax contributions, a portion of such after -tax
contributions will be allocated to the part ial lump-sum payment and
to the remaining annuity on a prorata pro rata basis.
C. E. The partial lump-sum option under this sect ion may be
elected only once by a member and may not be elected by a retiree.
D. F. The board of trustees Board of Trustees shall promulgate
any rules necessary for the implementation of this section.
SECTION 3. This act shall become effective Novemb er 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS
March 1, 2023 - DO PASS AS AMENDED BY CS