Board of Visitors minutes :: November 8, 1996 :: University of Virginia Library

Distribution of the portion of a Participant's Accumulation Account allocated to annuity contracts shall be distributed in accordance with the terms of the applicable annuity contract.

6.2 Distributions of Amounts Allocated to the Trust

Distribution of the portion of a Participant's Accumulation Account allocated to the Trust shall be distributed in the following manner:

(a) Election to Receive Benefits

A Participant who separates from service from the University may elect to receive his or her benefits any time on or after the day he or she separates from service. Such distribution shall be made on the later of 60 days from the receipt of request for such distribution or the date the Administrator determines the value of the Participant's Accumulation Account for purposes of distribution. The amount to be distributed shall be determined based on the value of the portion of the Former Participant's Accumulation Account balance allocated to the Trust as determined on the last day of the month in which the request for distribution was received by the Administrator. Such request shall be made on a written form prescribed or approved by the Administrator.

A Participant in Phased Retirement who is age 59 1/2 or older may elect to receive a distribution from the Plan as described in the preceding paragraph even if still an Employee.

(b) Forms of Distribution

A Participant may elect to receive a distribution of the portion of his or her Accumulation Account allocated to the Trust in one of the following forms:

(I) lump sum,

(II) Joint and Survivor Annuity, or

(III) Life Annuity.

(I) Required Beginning Date

In no event shall distributions commence later than April 1 of the calendar year following the calendar year in which the Participant attains age seventy-and-one-half (70 1/2) except if the Participant is an Employee in the calendar year he or she attains age 70 1/2, in which case the distribution may commence April 1 of the calendar year following the calendar year in which the Employee retires.

(II) Failure to Make an Election Under Section 6.2(a)

If a Participant fails to make an election under Section 6.2(a) above before the date described in (I) above, the Administrator shall direct the Trustee to distribute the portion of Participant's Accumulation Account allocated to the Trust in a lump sum in accordance with (I) above.

(d) Pre-Distribution Death Benefits

(I) Election of Form of Distribution by Designated Beneficiary

If a Participant dies prior to having commenced distribution of benefits under Section 6.2(a) the designated beneficiary may elect to receive the portion of the Participant's Accumulation Account allocated to the Trust either in a lump sum or a Life Annuity to paid over the life of the designated beneficiary. Such request shall be made within six months of the Participant's death on a written form prescribed or approved by the Administrator. Distribution shall be made on the later of sixty (60) days from the receipt of request for such distribution or the date the Administrator determines the value of the Participant's Accumulation Account for purposes of distribution. The amount to be distributed shall be determined based on the value of the portion of the Former Participant's Accumulation Account balance allocated to the Trust as determined on the last day of the month in which the request for distribution was received by the Administrator.

(II) Failure of Designated Beneficiary to Elect a Form of Distribution

If a designated beneficiary fails to elect a form of distribution within six months immediately following the Participant's death, the Administrator shall have the Participant's Accumulation Account allocated to the Trust distributed in a lump sum. Distribution shall be made on the later of sixty (60) days from the last day of the sixth month immediately following the month in which the Participant died or the date the Administrator determines the value of the Participant's Accumulation Account for purposes of distribution. The amount to be distributed shall be determined based on the value of the portion of the Former Participant's Accumulation Account balance allocated to the Trust as determined on the last day of the sixth month immediately following the month in which the Participant died.

(III) Absence of Valid Designation of Beneficiaries

If a Participant has no valid beneficiary designation on file with the Administrator, or the beneficiary has predeceased the Participant, the

Administrator shall designate as the beneficiary, in the following order of priority: surviving spouse; surviving children, including adopted children, in equal shares; surviving parents, in equal shares; or the Participant's estate. The Administrator's determination of this matter shall be binding. The beneficiary(ies) determined by the Administrator in accordance with this paragraph shall be treated as the designated beneficiary(ies) for purpose of (I) and (II) above.

(IV) Surviving Spouse Dies Prior to Receiving Benefits as Described in (I) and (II) Above

If the surviving spouse dies after the Participant, but before payments to such spouse begin, the provisions of (I) and (II) above shall be applied as if the surviving spouse were the Participant.

(IV) Children as Beneficiaries

For purposes of this Section 6.1(d), any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority.

(e) Incompetence of Distributee

If the Administrator receives evidence that a person entitled to receive any distribution under the Plan is physically or mentally incompetent or incompetent by any reason of age to receive such distribution and give valid release therefore, the Administrator shall direct the Trustee to make such distribution to the Participant's legal representative (such as a guardian) provided the Administrator, in its sole and absolute discretion, determines that such individual has the authority as legal representative to request payment from the Plan. Any such payment made under this Section 6.2(e) shall constitute a complete discharge of any liability under the Plan.

(f) Location of Participant or Beneficiary Unknown

In the event that all, or any portion, of the distribution payable to a Participant or his or her beneficiary under this Section 6.2 remains unpaid solely by reason of the inability of the Administrator to ascertain the whereabouts of such Participant or beneficiary after sending a registered letter, return receipt required, to the last known address, and further diligent effort, a savings account at a local financial institution shall be established in the person's name and the distribution shall be deposited therein.

(g) Direct Rollover

(I) General

Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section 6.2(g), a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(II) Definitions

(A) Eligible Rollover Distributions

An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

(B) Eligible Retirement Plan

An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.

A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the

alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse.

(D) Direct Rollover

A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.