N.Y. Education Law § 513: Optional allowances

§ 513. Optional allowances. 1. With the exception that no election of

an optional benefit shall become effective in case a member dies within

thirty days after the filing of an application for a retirement

allowance, until the first payment on account of any benefit becomes

normally due, any member, at the time of his retirement, may elect to

receive his benefits in a retirement allowance payable throughout life

or he may on retirement elect to receive the actuarial equivalent at

that time of his retirement allowance in a lesser retirement allowance,

payable throughout life with the provision that:

Option 1. If he die before he has received in payments the present

value of his retirement allowance as it was at the time of his

retirement, the balance shall be paid to his legal representatives or to

such person as he shall nominate by written designation duly

acknowledged and filed with the retirement board.

Option 2. Upon his death, his retirement allowance shall be continued

through the life of and paid to such person as he shall nominate by

written designation duly acknowledged and filed with the retirement

board at the time of his retirement.

Option 3. Upon his death, one-half of his retirement allowance shall

be continued throughout the life of and paid to such person as he shall

nominate by written designation duly acknowledged and filed with the

retirement board at the time of his retirement.

Option 4. Some other benefit or benefits shall be paid either to the

member or to such person or persons as he shall nominate, provided such

other benefit or benefits, together with the lesser retirement

allowance, shall be certified by the actuary to be of equivalent

actuarial value to his retirement allowance and shall be approved by the

retirement board.

2. If any retired member who has not elected an optional benefit, or

who has elected a benefit under Option 4 providing for the payment at

death of the amount, if any, by which his accumulated contributions at

the time of his retirement exceed the aggregate amount of his annuity

payments, dies within thirty days after the date his retirement becomes

effective, notwithstanding any other provisions of this law to the

contrary, benefits shall be paid in accordance with subdivision (b) or

(c) of section five hundred twelve, except that the amount of his

accumulated contributions payable under paragraph (1) of said

subdivision (b) shall be reduced by any annuity payments received by him

prior to his death and the benefit payable under paragraph (2) of said

subdivision (b) shall be reduced by any pension payments received by him

prior to his death. The amounts payable shall be paid to the beneficiary

or beneficiaries entitled thereto as provided under section five hundred

twelve, except that if the member has elected Option 4, as provided

above, the beneficiary nominated under such Option 4 shall be

substituted for any beneficiary previously nominated and all amounts

payable shall be paid to the beneficiary nominated under such Option 4.

3. In the case of persons who last became members on or after July

first, nineteen hundred seventy-three, the provisions of subdivision two

of this section shall apply only to deaths occurring after the date on

which said subdivision two becomes operative and prior to July first,

nineteen hundred seventy-four.

4. a. The retirement board may adopt rules and regulations providing

that a trustee of an inter vivos or testamentary trust shall be (1)

eligible to be nominated to receive a lump sum benefit under option one

and (2) eligible to be nominated to receive any benefit under option

four which the retirement board shall deem appropriate.

b. Any proceeds received by a trustee under this section shall not be

subject to the debts of the member or to transfer or estate taxes to any

greater extent than if such proceeds were payable to the beneficiaries

named in the trust and not to the estate of the member.

c. A payment made in good faith under this section to either a

designated trustee of an inter vivos trust, a successor trustee of an

inter vivos trust who provides a copy of his appointment or a trustee or

successor trustee of a testamentary trust who provides a copy of the

letters of trusteeship shall be a complete discharge to the system to

the extent of the payment.

d. If no qualified trustee claims the proceeds within eighteen months

after the death of the retired member, or if satisfactory evidence is

furnished within such period showing that there is or will be no trustee

to receive the proceeds, payment shall be made to the deceased retired

member's estate.