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City of Portland

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5.09.100 Determination of Benefits Upon Death

(Replaced by Ordinance No. 179417; amended by Ordinance Nos. 182168, 186746 and 187574, effective February 10, 2016.)

A.  Upon the death of a Participant, Former Participant or Alternate Payee, the Plan Administrator shall direct that the deceased Participant’s, Former Participant’s or Alternate Payee’s Participant Account, be distributed to the Beneficiary in accordance with the provision of this Section 5.09.100.

B.  The designation of a Beneficiary shall be made in a manner that is satisfactory to the Plan Administrator.  A Participant, Former Participant, or Alternate Payee may at any time revoke his or her designation of a Beneficiary or change his or her Beneficiary by submitting notice prior to the date of death of such revocation or change with the Plan Administrator.  In the event no valid designation of Beneficiary exists at the time of the Participant’s, Former Participant’s, or Alternate Payee’s death, the death benefit shall be payable to the Participant’s, Former Participant’s, or Alternate Payee's estate.

C.  The Plan Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the Participant Account of a deceased Participant, Former Participant, Alternate Payee or Beneficiary, as the Plan Administrator may deem appropriate.  The Plan Administrator’s determination of death and of the right of any person to receive payment shall be conclusive.

D.  Death benefits payable to a Beneficiary shall be made in a form as selected by the Beneficiary in accordance with the available options.  In the event a Beneficiary fails to make an election as to a benefit distribution option, any benefit payable to such Beneficiary shall be distributed in a lump sum payment in accordance with IRC Section 401(a)(9) and any applicable State of Oregon law or statute.  The terms of any annuity contract purchased and distributed by the Plan to a Beneficiary shall comply with the requirements of the Plan.

E.  Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant or Former Participant, shall be made in accordance with the requirements in Subsections F. through J. and shall otherwise comply with IRC Section 401(a)(9) and the Regulations thereunder.

F.  In accordance with the Beneficiary’s election, if minimum payments under IRC Section 401(a)(9) have not begun upon the death of a Participant or Former Participant and the designated Beneficiary is not the Participant’s surviving spouse, death benefit payments must:

1.  begin to be distributed to the designated Beneficiary no later than the December 31 of the calendar year immediately following the calendar year of the Participant’s or Former Participant’s death payable over a period not to exceed the life expectancy of the Beneficiary; or

2.  be distributed no later than the December 31 of the calendar year containing the fifth anniversary of the Participant’s or Former Participant’s death.

G.  In accordance with the Beneficiary’s election, if the designated Beneficiary is the Participant’s or Former Participant’s surviving spouse and minimum payments under IRC Section 401(a)(9) have not begun upon the death of a Participant or Former Participant, minimum payments to the surviving spouse as the designated Beneficiary must begin by the later of:

1.  December 31 of the calendar year immediately following the calendar year in which the Participant or Former Participant dies, or

2.  December 31 of the calendar year in which the Participant or Former Participant would have attained 70 ½.

The payments to the surviving spouse as the designated Beneficiary must be made over a period not to exceed the surviving spouse’s life expectancy.  Notwithstanding the foregoing, for purposes of this subsection, an Alternate Payee who is a spouse or former spouse will be treated as a Participant’s or Former Participant’s surviving spouse.

H.  If there is no designated Beneficiary as of September 30 of the year following the year of the Participant’s or Former Participant’s death, the Participant’s or Former Participant’s entire interest will be distributed according to State of Oregon law or statute by December 31 of the calendar year containing the fifth anniversary of the Participant’s or Former Participant’s death.

I.  If the Participant or Former Participant dies on or after the date distributions begin and there is a designated Beneficiary, distributions shall be based on the longer of the remaining life expectancy of the Participant or Former Participant or the remaining life expectancy of the Participant’s or Former Participant’s designated Beneficiary.

J.  Life expectancies calculations will be computed using the factors in the Single Life Table set forth in IRC Section 1.401(a)(9)-9, A-1, as follows:

1.  The Participant’s or Former Participant’s remaining life expectancy is calculated using the age of the Participant or Former Participant in the year of death, reduced by one for each subsequent year.

2.  If the Participant’s or Former Participant’s surviving spouse is the Participant’s or Former Participant’s sole, primary designated Beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant’s or Former Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year.  For distribution calendar years after the year of the surviving spouse’s death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

3.  If the Participant’s or Former Participant’s surviving spouse is not the Participant’s or Former Participant’s sole, primary designated Beneficiary, the designated Beneficiary’s remaining life expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant’s or Former Participant’s death, reduced by one for each subsequent year.

4.  If the Participant or Former Participant dies on or after the date distributions begin and there is no designated Beneficiary as of September 30 of the year after the year of the Participant’s or Former Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s or Former Participant’s death is the quotient obtained by dividing the Participant Account by the Participant’s or Former Participant’s remaining life expectancy calculated using the age of the Participant or Former Participant in the year of death, reduced by one for each subsequent year.