1994 LAWS OF MARYLAND

21-402. OPTION REQUIREMENTS.

(A) ACTUARIAL EQUIVALENT.

EACH OPTIONAL FORM OF ALLOWANCE SHALL BE THE ACTUARIAL
EQUIVALENT OF THE BASIC ALLOWANCE UNDER THE STATE SYSTEM OF A MEMBER.

(B) DESIGNATED BENEFICIARIES — BENEFITS FOR LIFE.

FOR AN OPTIONAL FORM OF ALLOWANCE PROVIDING FOR PAYMENT TO A
DESIGNATED BENEFICIARY FOR LIFE, THE DESIGNATED BENEFICIARY MUST BE AN
INDIVIDUAL.             

REVISOR'S NOTE: Subsection (a) of this section is new language derived without
substantive change from former Art. 73B, §§ 2-407(a)(1), 3-407(a)(1),
4-409(a)(1), 5-409(a)(1), 6-406(b)(1), 7-407(a)(1), 8-404(b)(1), 9-104(f)(1),
and 10-220(a)(l), as those sections required that an optional form of
allowance be an equivalent actuarial value of the basic allowance.

Subsection (b) of this section is new language added to state expressly that an
option providing payments to a designated beneficiary for life requires that an
individual be named as designated beneficiary.

In subsection (a) of this section, the reference to "the basic allowance under
the State system of a member" is added to distinguish that form of allowance
from an optional form described in § 21-403 of this subtitle.

Defined terms: "Allowance" § 20-101
"Basic allowance" § 20-101
"Designated beneficiary" § 20-101
"Member" § 20-101
"State system" § 20-101

21-403. DESCRIPTION OF OPTIONS.

(A)     OPTION 1.

UNDER OPTION 1, IF A RETIREE DIES BEFORE RECEIVING PAYMENTS EQUAL
TO THE ACTUARIAL EQUIVALENT PRESENT VALUE OF THE RETIREE'S BASIC
ALLOWANCE COMPUTED AT THE TIME OF RETIREMENT, THE BOARD OF TRUSTEES
SHALL PAY THE BALANCE AS A SINGLE PAYMENT:

(1)      TO THE DESIGNATED BENEFICIARY; OR

(2)      IF THERE IS NO DESIGNATED BENEFICIARY, TO THE RETIREE'S

ESTATE.

(B)      OPTION 2.

UNDER OPTION 2, WHEN A RETIREE DIES, THE BOARD OF TRUSTEES SHALL
PAY THE RETIREE'S REDUCED ALLOWANCE TO THE DESIGNATED BENEFICIARY FOR
THE DESIGNATED BENEFICIARY'S LIFE.

(C)      OPTION 3.

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Ch. 6