§ 27004 Beneficiary Annuity Election Rules

Key Takeaways

•If you're supposed to get money from the Cash Balance Benefit Program, you can choose to get it as monthly payments instead of all at once, but only if the total money is at least $3,500.
•If you choose monthly payments, you have to pick how many years you want to receive them, between 3 to 10 years. But you can't pick more years than you're expected to live.
•You can choose someone else to get the rest of the money if you die before all the payments are made.
•If you're part of a trust, the trust rules decide who gets the money if you die. If the trust isn't valid, you can choose what happens with the money.

Example

Imagine your grandma passed away and left you $4,000 from her retirement plan. You can choose to get this money as monthly payments instead of all at once.

You decide to get the money over 5 years. This means you'll get a monthly payment for 5 years. If you die before the 5 years are up, the rest of the money can go to someone you chose, like your kid.

(a) A beneficiary, other than an entity except a trust as defined in Section 26106.5, may elect to receive the final benefit payable under the Cash Balance Benefit Program as an annuity payable in monthly installments provided that the sum of the employee account and the employer account that is payable to the beneficiary equals at least three thousand five hundred dollars ($3,500). (b) A beneficiary who elects to receive an annuity pursuant to this section shall elect a period certain annuity. This form of payment is an annuity equal to the actuarial equivalent of the sum of the balance of the employee account and the employer account on the date of the participant’s death. The annuity shall be payable in whole year increments over a period of years specified by the beneficiary, from a minimum of three years to a maximum of 10 years. However, the annuity period shall not exceed the life expectancy of the beneficiary of the trust that is beneficiary with respect to the trust’s interest in the plan. (c) The beneficiary may designate a payee to receive the remaining balance of payments if the beneficiary dies prior to the end of the period certain. Unless otherwise specified in the trust instrument, the trustee or beneficiary of the trust that is an annuity beneficiary is entitled to name a subsequent beneficiary if the trust is valid. If the trust is determined to be invalid or terminated, any election by the trustee pursuant to this subdivision shall be void and the beneficiary shall be entitled to exercise all rights provided to annuity beneficiaries under this part. (Amended by Stats. 2016, Ch. 559, Sec. 17. (AB 1875) Effective January 1, 2017.)

Key Takeaways

•If you're supposed to get money from the Cash Balance Benefit Program, you can choose to get it as monthly payments instead of all at once, but only if the total money is at least $3,500.
•If you choose monthly payments, you have to pick how many years you want to receive them, between 3 to 10 years. But you can't pick more years than you're expected to live.
•You can choose someone else to get the rest of the money if you die before all the payments are made.
•If you're part of a trust, the trust rules decide who gets the money if you die. If the trust isn't valid, you can choose what happens with the money.

Example

Imagine your grandma passed away and left you $4,000 from her retirement plan. You can choose to get this money as monthly payments instead of all at once.

You decide to get the money over 5 years. This means you'll get a monthly payment for 5 years. If you die before the 5 years are up, the rest of the money can go to someone you chose, like your kid.

Key Takeaways

Example

Key Terms

References

§ 27004 Beneficiary Annuity Election Rules

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References