Sec. 8.02.  CITY CONTRIBUTIONS.  (a)  The city shall contribute amounts equal to 21 percent of the basic hourly earnings of each member employed by the city for all pay periods beginning after September 30, 2012, and before January 1, 2022, subject to additional amounts as provided by Section 8.07 of this Act.  For all pay periods beginning on or after January 1, 2022, the city shall make contributions to the police retirement system in accordance with Subsections (b) and (c) of this section and Sections 8.03, 8.04, 8.05, and 8.06 of this Act, as applicable, and subject to additional amounts as provided by Section 8.07 of this Act. The city council may also authorize the city to make additional contributions to the police retirement system in whatever amount the city council may determine.  Contributions by the city shall be made each pay period.
(b)  For each pay period that begins on or after January 1, 2022, and before January 1, 2023, the city shall contribute an amount equal to the sum of:
(1)  the city contribution rate, as determined in the initial risk sharing valuation study conducted under Section 8.03 of this Act, multiplied by the pensionable payroll for the applicable pay period; and
(2)  1/26 of the city legacy contribution amount for the 2022 calendar year, as determined and adjusted in the initial risk sharing valuation study conducted under Section 8.03 of this Act.
(c)  For each pay period that begins on or after January 1, 2023, the city shall contribute an amount equal to the sum of:
(1)  the city contribution rate for the applicable calendar year, as determined in a subsequent risk sharing valuation study conducted under Section 8.04 of this Act and adjusted under Section 8.05 or 8.06 of this Act, as applicable, multiplied by the pensionable payroll for the applicable pay period; and
(2)  1/26 of the city legacy contribution amount for the applicable calendar year, as determined and adjusted in the initial risk sharing valuation study conducted under Section 8.03 of this Act.
Sec. 8.03.  INITIAL RISK SHARING VALUATION STUDY.  (a)  The police retirement system shall cause the system's actuary to prepare an initial risk sharing valuation study that is dated as of December 31, 2020, in accordance with this section.
(b)  The initial risk sharing valuation study must:
(1)  except as otherwise provided by this section, be prepared in accordance with the requirements of Section 8.04 of this Act;
(2)  be based on the actuarial assumptions that were used by the system's actuary in the valuation completed for the year ended December 31, 2020;
(3)  project the corridor midpoint for the next 30 calendar years beginning with the calendar year that begins on January 1, 2022; and
(4)  include a schedule of city legacy contribution amounts for 30 calendar years beginning with the calendar year that begins on January 1, 2022.
(c)  For purposes of Subsection (b)(4) of this section, the schedule of city legacy contribution amounts must be determined in such a manner that the total annual city legacy contribution amount for the first three calendar years will result in a phase-in of the anticipated increase in the city's contribution rate from the calendar year that begins on January 1, 2021, in accordance with Subsection (a) of this section, to the rate equal to the sum of the estimated contribution rate for the calendar year that begins on January 1, 2022, and the rate of pensionable payroll equal to the city legacy contribution amount for January 1, 2022, determined as if there was no phase-in of the increase to the city legacy contribution amount.  The phase-in must reflect approximately one-third of the increase each year over the three-year phase-in period.  The city's contribution under Section 8.02 of this Act for:
(1)  the calendar years that begin on January 1, 2022, January 1, 2023, and January 1, 2024, must be adjusted to reflect the impact of the phase-in prescribed by this section; and
(2)  each calendar year that begins on January 1, 2025, through January 1, 2051, must reflect a city legacy contribution amount that is three percent greater than the city legacy contribution amount for the preceding calendar year.
(d)  The estimated city contribution rate for the calendar year that begins on January 1, 2022, must be based on the projected pensionable payroll, as determined under the initial risk sharing valuation study required by this section, assuming a payroll growth rate of three percent.
Sec. 8.04.  SUBSEQUENT RISK SHARING VALUATION STUDIES.  (a)  For each calendar year beginning after December 31, 2020, the police retirement system shall cause the system's actuary to prepare a risk sharing valuation study in accordance with this section and actuarial standards of practice.
(b)  Each risk sharing valuation study must:
(1)  be dated as of the last day of the calendar year for which the study is required to be prepared;
(2)  calculate the unfunded actuarial accrued liability of the system as of the last day of the applicable calendar year, including the liability layer, if any, associated with the most recently completed calendar year;
(3)  calculate the estimated city contribution rate for the following calendar year;
(4)  determine the city contribution rate and the member contribution rate for the following calendar year, taking into account any adjustments required under Section 8.05, 8.06, or 8.065 of this Act, as applicable; and
(5)  except as provided by Subsection (d) of this section, be based on the assumptions and methods adopted by the board in accordance with Section 3.091 of this Act, if applicable, and that are consistent with actuarial standards of practice and the following principles:
(A)  closed layered amortization of liability layers to ensure that the amortization period for each liability layer begins 12 months after the date of the risk sharing valuation study in which the liability layer is first recognized;
(B)  each liability layer is assigned an amortization period;
(C)  each liability loss layer will be amortized over a period of 30 years from the first day of the calendar year beginning 12 months after the date of the risk sharing valuation study in which the liability loss layer is first recognized, except that the legacy liability must be amortized over a 30-year period beginning January 1, 2022;
(D)  each liability gain layer will be amortized over:
(i)  a period equal to the remaining amortization period on the largest remaining liability loss layer, and the two layers must be treated as one layer such that if the payoff year of the liability loss layer is accelerated or extended, the payoff year of the liability gain layer is also accelerated or extended; or
(ii)  if there is no liability loss layer, a period of 30 years from the first day of the calendar year beginning 12 months after the date of the risk sharing valuation study in which the liability gain layer is first recognized;
(E)  liability layers will be funded according to the level percent of payroll method;
(F)  payroll for purposes of determining the corridor midpoint, city contribution rate, and city legacy contribution amount must be projected using the annual payroll growth rate assumption adopted by the board; and
(G)  the city contribution rate will be calculated each calendar year without inclusion of the legacy liability.
(c)  The city and the board may agree on a written transition plan for resetting the corridor midpoint:
(1)  if at any time the funded ratio of the system is equal to or greater than 100 percent; or
(2)  for any calendar year after the payoff year of the legacy liability.
(d)  Subject to Section 3.091 of this Act, the board may by rule adopt actuarial principles other than those required under Subsection (b)(5) of this section, provided the actuarial principles:
(1)  are consistent with actuarial standards of practice;
(2)  are approved by the system's actuary; and
(3)  do not operate to change the city legacy contribution amount.
Sec. 8.05.  ADJUSTMENT TO CITY CONTRIBUTION RATE IF LOWER THAN CORRIDOR MIDPOINT.  (a)  This section governs the determination of the city contribution rate applicable in a calendar year under Section 8.04(b)(4) of this Act if the estimated city contribution rate determined under Section 8.04(b)(3) of this Act is lower than the corridor midpoint.
(b)  If the estimated city contribution rate is lower than the corridor midpoint and the funded ratio is:
(1)  less than 90 percent, the city contribution rate for the applicable year equals the corridor midpoint; or
(2)  equal to or greater than 90 percent and the city contribution rate is:
(A)  equal to or greater than the minimum city contribution rate, the estimated city contribution rate is the city contribution rate for the calendar year; or
(B)  less than the minimum city contribution rate for the corresponding calendar year, the city contribution rate for the calendar year equals the minimum city contribution rate.
(c)  If the funded ratio is equal to or greater than 100 percent:
(1)  all existing liability layers, including the legacy liability, are considered fully amortized and paid; and
(2)  the city legacy contribution amount may no longer be included in the city contribution under Section 8.02 of this Act.
Sec. 8.06.  ADJUSTMENT TO CITY CONTRIBUTION RATE IF EQUAL TO OR GREATER THAN CORRIDOR MIDPOINT.  (a)  This section governs the determination of the city contribution rate applicable in a calendar year under Section 8.04(b)(4) of this Act if the estimated city contribution rate determined under Section 8.04(b)(3) of this Act is equal to or greater than the corridor midpoint.
(b)  If the estimated city contribution rate is equal to or greater than the corridor midpoint and:
(1)  less than or equal to the maximum city contribution rate for the corresponding calendar year, the estimated city contribution rate is the city contribution rate; or
(2)  greater than the maximum city contribution rate for the corresponding calendar year, the city contribution rate is the maximum city contribution rate.
Sec. 8.065.  INCREASED MEMBER CONTRIBUTION RATE IF ESTIMATED CITY CONTRIBUTION RATE GREATER THAN MAXIMUM CITY CONTRIBUTION RATE.  (a)  This section governs the determination of the member contribution rate applicable in a calendar year under Section 8.04(b)(4) of this Act if the estimated city contribution rate determined under Section 8.04(b)(3) of this Act is greater than the maximum city contribution rate.
(b)  Except as provided by Subsection (c) of this section, if the estimated city contribution rate is greater than the corridor maximum, the member contribution rate will increase by an amount equal to the difference between the following:
(1)  the estimated city contribution rate; and
(2)  the maximum city contribution rate.
(c)  The member contribution rate may not be increased by more than two percentage points under this section.
(d)  If the estimated city contribution rate is more than two percent of pensionable payroll greater than the maximum city contribution rate, the city and the board shall enter into discussions to determine additional funding solutions.
Sec. 8.07.  ADDITIONAL CITY CONTRIBUTIONS FOR PROPORTIONATE RETIREMENT PROGRAM PARTICIPATION.  (a)  The city shall contribute amounts in addition to the amounts described by Section 8.02 of this Act as required by Section 803.101(h), Government Code, to fund the additional liabilities incurred by the police retirement system as a result of participating in the proportionate retirement program.  The rate at which the city shall contribute additional amounts under this section is equal to 0.737 percent of the basic hourly earnings of each member employed by the city for all pay periods commencing on or after October 1, 2020, subject to adjustment under Subsection (b) of this section.
(b)  The additional contribution rate under Subsection (a) of this section shall increase or decrease as considered necessary by the actuary for the police retirement system after each five-year period of participation by the system in the proportionate retirement program in order to update the amount necessary to fund the additional liabilities incurred by the system as a result of participating in the proportionate retirement program and of the consolidation of the city's public safety and emergency management department with the police department on January 4, 2009.  The system's actuary shall perform an experience study that shall be the basis for a contribution rate adjustment under this subsection.  The effective date of the initial contribution rate adjustment under this subsection is October 1, 2015.  Each later contribution rate adjustment under this subsection takes effect October 1 of every fifth year after the effective date of the initial contribution rate adjustment.  The system's actuary shall present to the police retirement board the experience study on which any contribution rate adjustment under this subsection is based not later than 45 days before the effective date of the adjustment, and the city's actuary shall have the opportunity to review and comment on the study.  An adjustment in the additional contribution rate under this subsection may not cause the additional contribution rate under Subsection (a) of this section to be less than zero.
Sec. 8.08.  PUBLICATION OF CHANGES TO CONTRIBUTION RATES. Any change of the rates of deposit and the rates of contribution shall be published when approved by the board.
Sec. 8.09.  EXPENSES.  (a) Expenses involved in administration and operation of the police retirement system shall be paid from the assets of the police retirement system subject to approval by the board. Such expenses shall include actuarial valuations of the system no less frequently than on a biennial basis, annual audits and/or actuarial studies, preparation of annual reports, and staff assistance. Additional consulting may be authorized by the board and paid for from the assets of the police retirement system as deemed necessary from time to time by the board.
(b)  Expenses incurred from investment advice, counsel, and management shall be paid from the assets of the police retirement system.
Sec. 8.10.  PAYMENT OF CONTRIBUTIONS.  (a)  Contributions by the city shall be paid to the system after appropriation by the city council.
(b)  The city shall make the police officer contributions to the system required by Section 8.02 of this Act.
(c)  The system shall make the administrative staff's contributions to the system.
(d)  Member contributions will be made by a reduction in their monetary compensation.  Contributions made shall be treated as employer contributions in accordance with Section 414(h)(2), Internal Revenue Code (26 U.S.C. Section 414(h)(2)), for the purpose of determining tax treatment of the amounts under the federal Internal Revenue Code.  These contributions are not includible in the gross income of the member until such time as they are distributed or made available to the member.
(e)  Member contributions made as provided by Subsection (d) of this section shall be deposited to the individual account of each affected member and shall be treated as compensation of members for all other purposes of this Act and for the purpose of determining contributions to the federal Old-Age, Survivors, and Disability Insurance System (Social Security).  The provisions of this subsection shall remain in effect as long as the plan covering members is a qualified retirement plan under Section 401(a), Internal Revenue Code (26 U.S.C. Section 401(a)), and its related trust is tax exempt under Section 501(a), Internal Revenue Code (26 U.S.C. Section 501(a)).
Sec. 8.11.  EFFECT OF SYSTEM TERMINATION ON CONTRIBUTIONS. If the police retirement system is terminated, further contributions may not be made by the city or the system, and further deposits may not be made by the members for service after the date of termination.  Members do not accrue any additional benefits after the date of termination.  The benefit accrued by each member on the termination of the plan or the complete discontinuance of contributions under the plan and the benefit of any affected member on the partial termination of the plan, to the extent funded, become nonforfeitable notwithstanding the length of a member's service.  The benefit accrued by a member also becomes nonforfeitable, if not already nonforfeitable, at the normal retirement date.
Sec. 8.12.  EFFECT OF FORFEITURE. A forfeiture from a member terminating employment and withdrawing the member's accumulated deposits may not be applied to increase the benefit that any other member would receive from the system.  The actuary shall anticipate the effect of forfeitures in determining the costs under the system.
Sec. 8.13.  SYSTEM ASSETS. The assets of the police retirement system shall be held in trust for the exclusive benefit of the members and their beneficiaries.  The corpus or income may not be used for or diverted to a purpose other than the exclusive benefit of members or their beneficiaries, whether by operation or natural termination of the system, by power of revocation or amendment, by the happening of a contingency, by collateral arrangement, or by other means.
ARTICLE IX

Sec. 9.01. INVESTMENTS OF THE BOARD.    (a)  The police retirement board shall be the trustee of the funds of the police retirement system and shall have full power in its sole discretion to invest and reinvest, alter, and change such funds.  The board shall invest the funds in whatever instruments or investments the board considers prudent.  In making investments for the system, the board shall discharge its duties:
(1) for the exclusive purposes of:
(A) providing benefits to members and their beneficiaries;  and
(B) defraying reasonable expenses of administering the system;
(2) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(3) by diversifying the investments of the system to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so;  and
(4) in accordance with the laws, documents, and instruments governing the system.
(b) No member of the board, except as herein provided, shall have any interest in, directly or indirectly, or receive any pay or emolument for the member's services.  No member of the board shall, directly or indirectly, for himself or as an agent in any manner use the funds or deposits of the police retirement system except to make the current and necessary payments authorized by the board;  nor shall any member of the board become an endorser or surety or in any manner an obligor for money loaned by or borrowed from the board.
(c) None of the funds or money mentioned in this Act shall be assignable.  None of the funds or money mentioned in this Act shall be subject to execution, levy, attachment, garnishment, or other legal process.
(d) The right of a member to a retirement benefit, the return of accumulated deposits, the payment of a RETRO DROP lump sum, or any other right accrued or accruing to any person under the provisions of this Act, and the money in the trust created by this Act shall be unassignable except as specifically provided in this Act and shall not be subject to execution, levy, attachment, garnishment, the operation of bankruptcy or insolvency law, or any other process of law whatsoever.
(e) Service retirement benefits, disability retirement benefits, survivor benefits, death benefits, and withdrawal benefits may be paid to a former spouse or other alternate payee under the terms of a domestic relations order, but only if the board determines that the order constitutes a qualified domestic relations order within the meaning of Chapter 804, Government Code.  Benefit payments may be made to alternate payees only when and to the extent permitted by the qualified domestic relations order.  The amount of any benefit payment under this Act made to an alternate payee under a qualified domestic relations order shall reduce and offset the amount otherwise payable to the member or other beneficiary under this Act.  On the death of an alternate payee under a qualified domestic relations order, the interest of the alternate payee in the benefits under this Act ends, and remaining benefits shall be paid as if the qualified domestic relations order had not existed.
ARTICLE X

Sec. 10.01. FALSE REPORT OR STATEMENT.  Whoever with intent to deceive shall make any statement or report required under this Act which is untrue or shall falsify or permit to be falsified any record or records of the police retirement system shall forfeit any office or rights held by the person under the system, and such deception, falsification, or acquiescence in falsification shall be deemed a misdemeanor and the violation thereof shall be punishable by a fine not to exceed $1,000.
Sec. 10.02. CORRECTION OF ERRORS.  If any change or error in the records of the police retirement system should be discovered or should result in any member, retired member, surviving spouse, or beneficiary receiving from the police retirement system more or less than such member, retired member, surviving spouse, or beneficiary would have been entitled to receive had the records been correct, the police retirement board shall have the power to correct such error.  Except as provided by Section 802.1024, Government Code, the retirement system shall, as far as possible, adjust the payments so that the actuarial equivalent of the benefits to which the member, retired member, surviving spouse, or beneficiary was correctly entitled shall be paid.
ARTICLE XI

Sec. 11.01.  LIMITATION ON PAYMENT OF BENEFITS.  (a)  If the amount of any benefit payment otherwise due under this Act or the total payments due under this Act and any other qualified defined benefit plan maintained by this city would exceed the limitations provided by Section 415(b), Internal Revenue Code of 1986, as amended, and the regulations adopted under that section, the police retirement system shall reduce the amount of the benefit paid under this Act as required to comply with that section.  If the annual additions that would otherwise be allocated under this Act, or the total annual additions under this Act and any other qualified plan maintained by the city would exceed the limits under Section 415(c), Internal Revenue Code of 1986, the annual additions under this Act shall be reduced to the extent required to comply with Section 415(c), Internal Revenue Code of 1986.
(b)  For purposes of determining if the benefits or annual additions satisfy the limits provided by Subsection (a) of this section, the compensation to be used is wages within the meaning of Section 3401(a), Internal Revenue Code of 1986, plus amounts deferred at the election of the member that would be included in wages if not deferred under the rules of Section 402(e)(3), 125(a), 132(f)(4), 457(b), 402(h)(1)(B), or 402(k), Internal Revenue Code of 1986.  However, any rules that would limit the remuneration included in wages based on the nature or location of the employment or the services performed are disregarded for purposes of determining compensation.  In addition, any wages paid after a severance from employment are not included as compensation for purposes  of this subsection unless the payment is for regular pay as described in 26 C.F.R. Section 1.415(c)-2(e)(3)(ii) and is made by the later of two and one-half months after the severance from employment or the end of the calendar year that includes the date of severance from employment.  If excess annual additions are made to any member's account despite the efforts of the board of trustees, the amount shall be treated in accordance with 26 C.F.R. Section 1.402(g)-1(e)(2) or (3).
(c)  Notwithstanding any other provision of this Act, the applicable mortality table for purposes of adjusting a benefit due to the limitations provided under Section 415(b)(2)(B) or (D), Internal Revenue Code of 1986, is the table prescribed by Revenue Ruling 2001-62.
ARTICLE XII

Sec. 12.01. DISTRIBUTION RULES FOR SERVICE RETIREMENT AND DEATH ANNUITY PAYMENTS.    (a)  If a member selects, or if a member's death before retirement results in the payment of, an optional annuity providing for payment of a fixed number of monthly payments to the member's beneficiary or estate if the member dies before the total number of payments has been completed, the option is limited as provided by Subsections (b), (c), (d), and (e) of this section.
(b) If, according to mortality tables adopted by the Internal Revenue Service, at the time of the member's retirement the joint life expectancy of the member making the selection and of the beneficiary is less than the minimum period that monthly payments would be required under the option selected, the member must select another option so that the minimum period that monthly payments would be required does not exceed the joint life expectancy of the person making the selection and of the beneficiary.
(c) If, according to mortality tables adopted by the Internal Revenue Service, the life expectancy of a person to whom a benefit will be paid as the result of a member's death before retirement is less at the time of the member's death than the minimum period that monthly payments would be required under the option selected, the system shall adjust the minimum period that monthly payments will be required to a period that is not less than 60 months and that is the greatest multiple of 12 months that does not exceed the life expectancy of the person to whom the benefit will be paid.  The amount of the monthly payment shall be adjusted to the actuarial equivalent of the payments that would be made for the greater number of months.
(d) If the member making the selection designates the member's estate as beneficiary and if, according to mortality tables adopted by the Internal Revenue Service, the life expectancy of that member is less than the minimum period that monthly payments would be required under the option selected, the member must select another option so that the minimum period that monthly payments would be required does not exceed the member's life expectancy at the time of the member's retirement.
(e) If an estate will be paid monthly benefits as the result of a member's death before retirement for a period that would exceed 60 months, the period for which the payments will be made shall be reduced to 60 months, and the amount of the monthly payment to the estate is the actuarial equivalent of the payments that would have been made for the greater number of months.
(f) If a member selects an optional annuity that is payable after the retiree's death throughout the life of a beneficiary who is not the retiree's spouse, payments to the beneficiary after the retiree's death may not exceed the applicable percentage of the annuity payment that would have been payable to the retiree using the following table:
Excess of age of member
Applicable
over age of beneficiary:
percentage:
10 years or less
100 percent
more than 10 years but less than 25 years
 67 percent
25 years or more
 50 percent
(g) Unless the member's spouse is the beneficiary of an optional annuity that guarantees a fixed number of monthly payments, the guaranteed number of payments may not exceed the applicable period using the following table:
 Maximum number
 of guaranteed
Age of member at retirement:
monthly payments:
less than 84
      180
at least 84 but less than 91
      120
91 or more
      60
Sec. 12.02. DISTRIBUTION RULES FOR DISABILITY ANNUITY PAYMENTS.    (a)  If a member selects an optional annuity providing for payment of a fixed number of monthly annuity payments to the member's beneficiary or estate if the member dies before the total number of payments has been completed, the option is limited as provided by Subsections (b) and (c) of this section.
(b) If, according to mortality tables adopted by the Internal Revenue Service, at the time of the member's retirement the joint life expectancy of the member making the selection and of the beneficiary is less than the minimum period that monthly payments would be required under the option selected, the member must select another option so that the minimum period that monthly payments would be required does not exceed the joint life expectancy of the person making the selection and of the beneficiary.
(c) If the member making the selection designates the member's estate as beneficiary and if, according to mortality tables adopted by the Internal Revenue Service, the life expectancy of that member is less than the minimum period that monthly payments would be required under the option selected, the member must select another option so that the minimum period that monthly payments would be required does not exceed the member's life expectancy at the time of the member's retirement.
(d) If a member selects an optional annuity that is payable after the retiree's death throughout the life of a beneficiary who is not the retiree's spouse, payments to the beneficiary after the retiree's death may not exceed the applicable percentage of the annuity payment that would have been payable to the retiree using the following table:
Excess of age of member
Applicable
over age of beneficiary:
percentage:
10 years or less
100 percent
more than 10 but less than 25 years
 67 percent
25 years or more
 50 percent
(e) Unless the member's spouse is the beneficiary of an optional annuity that guarantees a fixed number of monthly payments, the guaranteed number of payments may not exceed the applicable period using the following table:
Maximum number
of guaranteed
Age of member at retirement:
monthly payments:
less than 84
180
at least 84 but less than 91
120
91 or more
 60
ARTICLE XIII

Sec. 13.01. TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.    (a)  Notwithstanding any provision of this Act to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
(b) In this section:
(1) "Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:
(A) any distribution that is one of a series of substantially equal periodic payments made at least annually for the life or life expectancy of the distributee or the joint lives or joint life expectancies of the distributee and distributee's beneficiary, or for a specified period of 10 years or more;
(B) any distribution to the extent the distribution is required under Section 401(a)(9) of the Internal Revenue Code of 1986 (26 U.S.C. Section 401);  or
(C) the portion of any distribution that is not includible in gross income.
(2)  "Eligible retirement plan" means  an individual retirement account described by Section 408(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 408), an individual retirement annuity described in Section 408(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 408), an annuity plan described in Section 403(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 403), a qualified trust described in Section 401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 401), an annuity contract described by Section 403(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 403), or an eligible plan under Section 457(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 457), that is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state that agrees to separately account for amounts transferred from the plan, provided that any of the vehicles described above accepts the distributee's eligible rollover distribution.  The term applies to a distribution to a surviving spouse or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order within the meaning of Chapter 804, Government Code.  In the case of an eligible rollover distribution to a non-spouse beneficiary, an eligible retirement plan includes only an individual retirement account or individual retirement annuity described above.
(3)  "Distributee" means a member or former member, the member's or former member's surviving spouse, the member's or former member's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as prescribed by Section 804.003, Government Code, or the member's or former member's non-spouse beneficiary.
(4) "Direct rollover" means a payment by this system to the eligible retirement plan specified by the distributee.
Sec. 13.02.  MANDATORY DISTRIBUTIONS PROHIBITED.  A member or former member who has separated from service may not be required to receive an eligible rollover distribution, as defined in Section 13.01(b)(1) of this Act, without the member's consent unless the member or former member has attained the applicable age for minimum distributions required under Section 401(a)(9) of the Internal Revenue Code of 1986 (26 U.S.C. Section 401(a)(9)).