(A) A distributee may elect, at the time and
in the manner prescribed by the board, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
Effective January 1, 2010, a non-spouse beneficiary may elect
to make a direct rollover to an inherited individual retirement account or
annuity described in section 408(a) or 408(b) of the Internal Revenue Code, or
a Roth individual retirement account or annuity described in section 408A of
the Internal Revenue Code that is established on behalf of the beneficiary.
Such rollover shall be made in a manner consistent with the section 402(c)(11)
of the Internal Revenue Code and any other applicable guidance.
(B) The following definitions
apply to this rule:
(1) "Eligible rollover
distribution" means a lump sum distribution from the member or contributor's
account pursuant to section
145.40,
145.63, or division (H) of
section
145.384
of the Revised
Code, except that "eligible rollover distribution" does not include either of
the following:
(a) Any distribution to the
extent such distribution is required under section 401(a)(9) of the Internal
Revenue Code;
(b) The portion of
any distribution that is not includible in gross income, unless the
distribution is being rolled over to either (1) a traditional individual
retirement account or individual retirement annuity under section 408(a) or
408(b) of the Internal Revenue Code or (2) a qualified trust which is part of a
plan which is a defined contribution plan under section 401(a) or 403(a) of the
Internal Revenue Code that will separately account for the distribution,
including the taxable and non-taxable portions of the distribution, in a direct
trustee-to-trustee transfer.
(2) "Eligible retirement plan" means any
program defined in sections 401(a)(31) and 402(c)(8)(B) of the Internal Revenue
Code that accepts the member or contributor's eligible rollover distribution,
as follows:
(a) An individual retirement
account under section 408(a) of the Internal Revenue Code;
(b) An individual retirement annuity under
section 408(b) of the Internal Revenue Code (other than an endowment
contract);
(c) A qualified
trust;
(d) An annuity plan under
section 403(a) of the Internal Revenue Code;
(e) An eligible deferred compensation plan
under section 457(b) of the Internal Revenue Code that is maintained by an
eligible employer under section 457(e)(1)(A) of the Internal Revenue Code (so
long as the plan agrees to separately account for amounts rolled into the
plan);
(f) An annuity contract
under section 403(b) of the Internal Revenue Code; and
(g) Effective January 1, 2008, a Roth
individual retirement account or annuity described in section 408A of the
Internal Revenue Code, subject to the limitations set forth in such Internal
Revenue Code provision; provided, however, that the plan is not responsible for
assuring that a distributee is eligible to make such a rollover.
(3) "Distributee" means a member
or contributor, as well as the surviving spouse of a member or
contributor.
(4) "Direct rollover"
means a payment by the retirement system to the eligible retirement plan
specified by the distributee.
