Oklahoma HB 2517: Public retirement systems; Law Enforcement Retirement System; modifying provisions related to computation of certain annuity amount; effective date.

Bill Text

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STATE OF OKLAHOMA

2nd Session of the 56th Legislature (2018)

HOUSE BILL 2517 By: McDaniel

AS INTRODUCED

An Act relating to the Oklahoma Law Enforcement
Retirement System; amending 47 O.S. 2011, Section 2-
305.4, as last amended by Section 2, Chapter 37,
O.S.L. 2014 (47 O.S. Supp. 2017, Section 2-305.4),
which relates to limitations on benefits and
contributions pursuant to the Internal Revenue Code
of 1986; modifying reference; modifying provisions
related to computation of certain annuity amount;
requiring payment of benefits from certain fund; and
providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 47 O.S. 2011, Section 2-305.4, as
last amended by Section 2, Chapter 37, O.S.L. 2014 (47 O.S. Supp.
2017, Section 2-305.4), is amended to read as follows:
Section 2-305.4 A. For limitation years prior to July 1, 2007,
the limitations of Section 415 of the Internal Revenue Code of 1986,
as amended, shall be computed in accordance with the applicable
provisions of the System in effect at that time and, to the extent
applicable, Revenue Ruling 98-1 and Revenue Ruling 2001-51, except
as provided herein. Notwithstanding any other provision contained
herein to the contrary, the benefits payable to a member from the

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Oklahoma Law Enforcement Retirement System provided by employer
contributions (including contributions picked up by the employer
under Section 414(h) of the Internal Revenue Code of 1986, as
amended), shall be subject to the limitations of Section 415 of the
Internal Revenue Code of 1986, as amended, in accordance with the
provisions of this section and subsequent guidance. The limitations
of this section shall apply in limitation years beginning on or
after July 1, 2007, except as otherwise provided herein.
B. Except as provided herein, effective for limitation years
ending after December 31, 2001, any accrued retirement benefit
payable to a member as an annual benefit as described herein shall
not exceed One Hundred Sixty Thousand Dollars ($160,000.00),
automatically adjusted under Section 415(d) of the Internal Revenue
Code of 1986, as amended, for increases in the cost of living, as
prescribed by the Secretary of the Treasury or the Secretary's
delegate, effective January 1 of each calendar year and applicable
to the limitation year ending with or within such calendar year.
The automatic annual adjustment of the dollar limitation in this
subsection under Section 415(d) of the Internal Revenue Code of
1986, as amended, shall apply to a member who has had a severance
from employment.
1. The member's annual benefit is a benefit that is payable
annually in the form of a straight life annuity. Except as provided
herein, where a benefit is payable in a form other than a straight

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life annuity, the benefit shall be adjusted to an actuarially
equivalent straight life annuity that begins at the same time as
such other form of benefit and is payable on the first day of each
month, before applying the limitations of this section. For a
member who has or will have distributions commencing at more than
one annuity starting date, the annual benefit shall be determined as
of each such annuity starting date (and shall satisfy the
limitations of this section as of each such date), actuarially
adjusting for past and future distributions of benefits commencing
at the other annuity starting dates. For this purpose, the
determination of whether a new starting date has occurred shall be
made without regard to Section 1.401(a)-20, Q&A 10(d), and with
regard to Section 1.415(b)-1(b)(1)(iii)(B) and (C) of the Income Tax
Regulations.
2. No actuarial adjustment to the benefit shall be made for:
a. survivor benefits payable to a surviving spouse under
a qualified joint and survivor annuity to the extent
such benefits would not be payable if the member's
benefit were paid in another form,
b. benefits that are not directly related to retirement
benefits (such as a qualified disability benefit,
preretirement incidental death benefits) and
postretirement medical benefits, or

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c. the inclusion in the form of benefit of an automatic
benefit increase feature, provided, the form of
benefit is not subject to Section 417(e)(3) of the
Internal Revenue Code of 1986, as amended, and would
otherwise satisfy the limitations of this section, and
the System provides that the amount payable under the
form of benefit in any limitation year shall not
exceed the limits of this section applicable at the
annuity starting date, as increased in subsequent
years pursuant to Section 415(d) of the Internal
Revenue