Section 2700.730  Election of Method of Distribution

a)         In an election to commence benefits as provided for under Section 2700.700, a Participant entitled to a distribution of benefits may elect to receive payment in any of the following forms of distribution:

1)         a lump sum payment of the total Account Balance; or

2)         annual installment payments through the year of the Participant's death, the amount payable each year equal to a fraction of the Account Balance equal to 1 divided by the distribution period set forth in the Uniform Lifetime Table at 26 CFR 1.401(a)(9)-9, A-2 (2008) for the Participant's age on the Participant's birthday for that year.

A)        If the Participant's age is less than age 70, the distribution period is 27.4 plus the number of years that the Participant's age is less than age 70.

B)        At the Participant's election, this annual payment can be made in monthly, quarterly or semi-annual installments.

C)        The Account Balance for this calculation (other than the final installment payment) is the Account Balance as of the end of the year prior to the year for which the distribution is being calculated.

D)        For any year, the Participant can elect distribution of a greater amount (not to exceed the amount of the remaining Account Balance) rather than the amount calculated under subsection (a)(2)(C).

b)         A Participant or the surviving spouse of a Participant (or a Participant's former spouse who is an alternate payee under a domestic relations order, as defined in section 414(p) of the Code) who is entitled to an eligible rollover distribution may elect, at the time and in the manner prescribed under the Plan, to have all or any portion of the distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover.  An eligible retirement plan means an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, a qualified trust described in section 401(a) of the Code, an annuity plan described in section 403(a) or 403 (b) of the Code, or an eligible governmental plan described in section 457(b) of the Code, that accepts the eligible rollover distribution.

c)         For purposes of this Section, an eligible rollover distribution means any distribution of all or any portion of a Participant's Account Balance, except that an eligible rollover distribution does not include:

1)         any installment payment under subsection (a) for a period of 10 years or more;

2)         any distribution made under Section 2700.740 as a result of an Unforeseeable Emergency; or

3)         the portion, if any, of the distribution that is a required minimum distribution under section 401(a)(9) of the Code other than those distributions described in subsections (c)(1) and (c)(2).  

d)         In no event shall any distribution under this Section begin later than the latter of:

1)         April 1 of the year following the calendar year in which the Participant attains age 70½; or

2)         April 1 of the year following the year in which the Participant retires or otherwise has a Severance from Employment.

e)         If distributions commence in the calendar year following the latter of the calendar year in which the Participant attains age 70½ or the calendar year in which the Severance from Employment occurs, the distribution on the date that distribution commences must be equal to the annual installment payment for the year that the Participant has a Severance from Employment determined under subsection (a)(2), and an amount equal to the annual installment payment for the year after Severance from Employment determined under subsection (a)(2) must also be paid before the end of the calendar year of commencement.

f)         Any election made under this Section may be revoked at any time.

g)         Any portion of the Deferred Compensation Account that has not been distributed shall continue to be credited and/or debited according to the provisions of Sections 2700.600 and 2700.610.

(Source:  Amended at 33 Ill. Reg. 13451, effective September 14, 2009)