The Tax-Sheltered Annuity Program provided by Section 17-101 et seq. of this title shall satisfy the applicable qualification requirements for grandfathered governmental tax-sheltered annuity programs as specified in 26 U.S.C. Section 403(b) and the relevant regulatory provisions and guidance related thereto. In order to satisfy these requirements and guidelines, the Teachers' Retirement Tax-Sheltered Annuity Program shall be subject to the following provisions, notwithstanding any other provision of the law governing the Oklahoma Teachers' Retirement System:

(1) The Board of Trustees shall administer and distribute the corpus and income of the Tax-Sheltered Annuity Program to members and their beneficiaries pursuant to the applicable requirements under 26 U.S.C. Section 403(b), relevant regulatory provisions and guidance under 26 U.S.C. Section 403(b), and in accordance with the law governing the Oklahoma Teachers' Retirement System.

(2) All benefits paid from the retirement system shall be distributed in accordance with the applicable requirements of 26 U.S.C. Sections 403(b)(10) and 401(a)(9) and the regulations thereto.

(3) To the extent required by 26 U.S.C. Sections 403(b)(10) and 401(a)(31), the retirement system shall allow members and qualified beneficiaries to elect a direct rollover of eligible distributions to another eligible retirement plan.

(4) To the extent required under 26 U.S.C. Section 403(b)(11) and the regulations thereto, distributions under the Tax-Sheltered Annuity Program shall only be paid when the member attains the age of fifty-nine and one-half (59 1/2) years, separates from service, dies, becomes disabled, or in the case of hardship.

(5) The Board of Trustees may terminate the Tax-Sheltered Annuity Program administered under 26 U.S.C. Section 403(b). The Board of Trustees shall do so in accordance with the requirements of federal tax law and in a way that is designed to minimize financial harm to the participants in the program. To assist in minimizing any such harm, an employer that sponsors a local tax-sheltered annuity program under 26 U.S.C. Section 403(b) and that has an active or inactive participant with an account balance under the program, shall permit the provider administering the program on the effective date of such termination to be a provider in the local program and to offer the same investment options to program participants that were available under the program. The employer is required to permit the program provider to remain a provider under the local program for a two-year period beginning with the first day of the local program's plan year following the effective date of such termination; provided, that this requirement shall apply with respect to an investment option only so long as the program provider continues to lawfully provide the investment option. Notwithstanding the foregoing, any program participant may elect to remit contributions to and/or, subject to any contractual restrictions, transfer the balance of the program participant to, any other approved provider under the local program at any time during the two-year period provided herein. An employer that sponsors a local program that includes the program as the only investment option, and that has an active or inactive participant with an account balance under the program, shall permit the program provider to be a provider in that local program subject to the above terms, or the local program of the employer shall terminate at such time that the program is terminated, in which case the employer shall be prohibited from contributing to any 403(b) program on behalf of any employee for the twelve-month period required under Treasury Regulation Section 1.403(b)-10.

Added by Laws 1994, c. 380, § 2, eff. July 1, 1994. Amended by Laws 2018, c. 248, § 1.