Montana Code 19-20-212. General internal revenue service qualification rules
19-20-212. General internal revenue service qualification rules. (1) The board shall distribute the corpus and income of the system to the members and their beneficiaries in accordance with the system’s law. The corpus and income may not, at any time before the satisfaction of all liabilities with respect to members and their beneficiaries, be used for, or diverted to, purposes other than the exclusive benefit of the members and their beneficiaries.
Terms Used In Montana Code 19-20-212
- board: means the retirement system's governing board provided for in 2-15-1010. See Montana Code 19-20-101
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Internal Revenue Code: has the meaning provided in 15-30-2101. See Montana Code 19-20-101
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means a person who has an individual account in the annuity savings account. See Montana Code 19-20-101
- plan: means the teachers' retirement system of the state of Montana provided for in 19-20-102. See Montana Code 19-20-101
- Service: means the performance of duties that would entitle the person to active membership in the retirement system under the provisions of 19-20-302. See Montana Code 19-20-101
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)Forfeitures arising from severance of employment, from death, or for any other reason may not be applied to increase the benefits that any member would otherwise receive under the state‘s law. However, forfeitures may be used to reduce the costs of administration.
(3)Distributions from the system may be made only upon retirement, separation from service, disability, or death.
(4)Notwithstanding any provision of law to the contrary, contributions, benefits, and service credit with respect to qualified military service must be provided in accordance with section 414(u) of the Internal Revenue Code and the federal Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301, et seq.
(5)(a) If at any time that the board finds that benefits payable or contributions required under this chapter would exceed the limits established under section 415 of the Internal Revenue Code, the board may establish a qualified governmental excess benefit arrangement and adopt rules for the necessary and appropriate procedures for the administration of the benefit arrangement in accordance with the Internal Revenue Code and this section.
(b)An excess benefit arrangement established pursuant to this section is subject to the following requirements:
(i)The amount of any annual benefit that would exceed the limitations imposed by section 415 of the Internal Revenue Code must be paid from the benefit arrangement.
(ii)The amount of a contribution that would exceed the limitation imposed by section 415 of the Internal Revenue Code must be credited to the benefit arrangement.
(iii)The benefit arrangement must be a separate part of the system.
(iv)The benefit arrangement must be maintained solely for the purpose of providing to members in the system that part of the member’s annual benefit or contribution otherwise payable under the terms of this chapter that exceeds the limitations on benefits or contributions imposed by section 415 of the Internal Revenue Code.
(v)Members may not elect, directly or indirectly, to defer compensation to the benefit arrangement.
(6)The limitation year for purposes of section 415 of the Internal Revenue Code is the school year beginning September 1 and ending August 31.
(7)The plan year is the fiscal year beginning July 1 and ending June 30.