Ohio Admin. Code 5505-3-08 - Federal tax compliance provisions
(A) The board shall distribute the funds
established in Chapter 5505. of the Revised Code to members, retirants and
their beneficiaries in accordance with the provisions of such chapter. No part
of the corpus or income of these funds may be used for or diverted to any
purpose other than the exclusive benefit of the members, retirants, and their
beneficiaries.
(B) If there is a
termination of the plan described in Chapter 5505. of the Revised Code or a
complete discontinuance of contributions to the plan, the rights of each
affected member and retirant to the benefits accrued at the date of termination
or discontinuance of contributions, to the extent then funded, are
non-forfeitable.
(C) Employer
contribution forfeitures of a member arising from severance of employment,
death, or for any other reason shall not be applied to increase the benefits
any member would otherwise receive under Chapter 5505. of the Revised Code in
accordance with section 401(a)(8) of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(8).
(D) Notwithstanding any provisions in highway
patrol retirement system rules or Chapter 5505. of the Revised Code to the
contrary, distributions to members, retirants, and beneficiaries shall be made
in accordance with section 401(a)(9) of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9) and with the
following rules:
(1) The entire interest of a
member or retirant shall be distributed to such member or retirant -
(a) No later than the required beginning
date, or
(b) Beginning not later
than the required beginning date, in accordance with applicable regulations,
over the life of such member or retirant and a designated beneficiary within
the meaning of section 401(a)(9) of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9).
(2) The required beginning date
means April first of the calendar year following the later of:
(a) The calendar year in which the member or
retirant attains the required minimum
distribution
age seventy and one-half years
of age, or
(b) The
calendar year in which the member retires.
(3) If distribution of a member's or
retirant's benefit has begun pursuant to the provisions of section 401(a)(9) of
the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9), and the member or
retirant dies, any survivor benefits will be distributed as reasonably
practicable under the plan of payment selected under Chapter 5505. of the
Revised Code and effective as of the date following the member's or retirant's
death.
(4) If a member dies before
the distribution of the member's interest has begun pursuant to the provisions
of section 401(a)(9) of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9), any remaining
interest of the member will be distributed within five years after the death of
such member. Notwithstanding the foregoing, if any benefit is payable to or for
the benefit of a designated beneficiary within the meaning of section 401(a)(9)
of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9), the benefit may
be distributed (in accordance with applicable regulations) over the life of
such beneficiary (or over a period not extending beyond the life expectancy of
such beneficiary), provided that such distribution begin not later than one
year after the date of the member's death. If the beneficiary is the surviving
spouse of the member, distributions shall not be required, pursuant to this
rule, to begin until the end of the calendar year in which the member would
have attained the minimum distribution age
of seventy and one-half and, if the spouse
dies before the distribution to the spouse commences, then the spouse shall be
treated as the member for purposes of this rule.
(5) Any death benefit amounts payable under
Chapter 5505. of the Revised Code must comply with the incidental death benefit
requirements of section 401(a)(9)(G) of the Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(9)(G).
(E) Whenever the amount of the
benefit is to be determined on the basis of actuarial assumptions, no employer
discretion will be permitted.
(F) A
member who is entitled to a distribution which qualifies as an eligible
rollover distribution pursuant to sections 401(a)(31) and 402(f)(2)(A) of the
Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(31) and
402(f)(2)(A) may
request that the distribution be paid in a direct rollover to another eligible
retirement plan to the extent permitted by sections 401(a)(31)(A) and 408(A) of
the Internal Revenue Code of 1986, 26 U.S.C. A. 401(a)(31)A) and 408(A). A
qualified nonspouse beneficiary of a deceased member may only rollover directly
to an inherited individual retirement account or annuity to the extent
permitted by section 402(c)(11) of the Internal Revenue Code of 1986,
26 U.S.C.A.
402(c)(11).
(G) The annual compensation of each member
taken into account in determining benefit accruals in any plan year beginning
after December 31, 2001 shall not exceed two hundred thousand dollars. Annual
compensation means "salary", as such term is defined in section
5505.01 of the Revised Code
during the plan year or such other consecutive twelve month period over which
salary is otherwise determined under the plan (hereinafter referred to as the
"Determination Period"). In determining benefit accruals in plan years
beginning after December 31, 2001, the annual compensation limit for the
determination period beginning before January 1, 2002 shall be two hundred
thousand dollars. The two hundred thousand dollar limit on annual compensation
in this paragraph shall be adjusted for cost-of-living increases in accordance
with section 401(a)(17)(B) of Internal Revenue Code of 1986,
26 U.S.C.A.
401(a)(17)(B). The
cost-of-living adjustment in effect for a calendar year applies to annual
"salary" for the determination period that begins with or within such calendar
year.
(H) For purposes of the limit
established by section 415 of the Internal Revenue Code of 1986,
26 U.S.C.A.
415 (as used in section
5505.17,
5505.174,
5505.175,
5505.176,
5505.177, or
5505.18 of the Revised Code),
effective January 1, 1998, compensation shall include amounts excludable from
the employee's gross income under sections 125, 132(f), 402(e)(3), 402(h),
403(b), or 457 of the Internal Revenue Code of 1986, 26 U.S.C.A 125, 132(f),
402(e)(3), 402(h), 403(b), or 457. Effective January 1, 2009, compensation
shall include differential wage payments as defined in section 3401(h)(2) of
the Internal Revenue Code of 1986,
26 U.S.C.A.
3401(h)(2).
(I) The plan does not permit involuntary
cashout distributions and therefore complies with the provisions of section
401(a)(31)(B) of the Internal Revenue Code of 1986, 26 U.S.C.A
401(a)(31)(B).
(J)
(1) Effective for the limitation year
beginning on January 1, 2012, the final regulations promulgated April 5, 2007
with respect to section 415 of the Internal Revenue Code of 1986,
26 U.S.C.A.
415 are incorporated herein by reference,
including any provisions of the pension funding equity act of 2004 that apply
to governmental plans.
(2)
"Limitation year" is the year used in determining whether the limits set forth
in section 415 of the Internal Revenue Code of 1986,
26 U.S.C.A.
415 (as used in section
5505.17,
5505.174,
5505.175,
5505.176,
5505.177, or
5505.18 of the Revised Code)
have been exceeded with respect to a member or retirant in the plan described
in Chapter 5505. of the Revised Code. The limitation year for the plan is the
calendar year.
(K)
Effective January 1, 2007, notwithstanding any provision in Chapter 5505. of
the Revised Code to the contrary, the survivor of a member on a leave of
absence to perform military service with reemployment rights described in
section 414(u) of the Internal Revenue Code of 1986,
26 U.S.C.A.
414(u), where the member
cannot return to employment on account of his or her death, shall be entitled
to any additional benefits (other than benefit accrual relating to the period
of qualified military service) that would be provided under Chapter 5505. of
the Revised Code had the member resumed employment and then terminated
employment on account of death.
Notes
Promulgated Under: 111.15
Statutory Authority: 5505.04
Rule Amplifies: 5505.17, 5505.175, 5505.177, 5505.19, 5505.21
Prior Effective Dates: 08/08/2011, 12/31/2012 (Emer.), 03/28/2013
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