Okla. Stat. tit. 11, § 11-49-106.3

A. For distributions made on or after January 1, 2002, and

notwithstanding any provision of the System to the contrary that

would otherwise limit a Distributee's election hereunder, a

Oklahoma Statutes - Title 11. Cities and Towns Page 556

Distributee, including a nonspouse designated beneficiary, to the

extent permitted under paragraph 3 of subsection B of this section,

may elect, at the time and in the manner prescribed by the State

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.

B. For purposes of this section, the following definitions

shall apply:

1. "Eligible Rollover Distribution" means 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 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

Section 401(a)(9) of the Internal Revenue Code of 1986, as amended;

and the portion of any distribution that is not includable in gross

income. A portion of a distribution shall not fail to be an

Eligible Rollover Distribution merely because the portion consists

of after-tax member contributions or any other distribution which is

not includable in gross income. However, such portion may be

transferred only:

(a) from January 1, 2002, through December 31, 2006:

(1) to an individual retirement account or annuity

described in Section 408(a) or (b) of the

Internal Revenue Code of 1986, as amended, or

(2) in a direct trustee-to-trustee transfer, to a

qualified trust which is a part of a defined

contribution plan that agrees to separately

account for amounts so transferred, including

separately accounting for the portion of such

distribution which is includable in gross income

and the portion of such distribution which is not

so includable, and

(b) on or after January 1, 2007:

(1) to an individual retirement account or annuity

described in Section 408(a) or (b) of the

Internal Revenue Code of 1986, as amended, or

(2) in a direct trustee-to-trustee transfer, to a

qualified trust or an annuity contract described

in Section 403(b) of the Internal Revenue Code of

1986, as amended, and such trust or contract

provides for separate accounting for amounts so

transferred (and earnings thereon), including

separately accounting for the portion of such

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distribution which is includable in gross income

and the portion of such distribution which is not

so includable.

Effective for distributions after December 31, 2007, such after-

tax portion may also be directly transferred to a Roth individual

retirement account or annuity described in Section 408A of the

Internal Revenue Code of 1986, as amended, (Roth IRA), subject to

any limitations described in Section 408A(c) of the Internal Revenue

Code of 1986, as amended;

2. "Eligible Retirement Plan" means an individual retirement

account described in Section 408(a) of the Internal Revenue Code of

1986, as amended, an individual retirement annuity described in

Section 408(b) of the Internal Revenue Code of 1986, as amended, an

annuity plan described in Section 403(a) of the Internal Revenue

Code of 1986, as amended, or a qualified trust described in Section

401(a) of the Internal Revenue Code of 1986, as amended, that

accepts the Distributee's Eligible Rollover Distribution. Effective

January 1, 2002, an Eligible Retirement Plan shall also mean an

annuity contract described in Section 403(b) of the Internal Revenue
annuity plan described in Section 403(a) of the Internal Revenue

Code of 1986, as amended, or a qualified trust described in Section

401(a) of the Internal Revenue Code of 1986, as amended, that

accepts the Distributee's Eligible Rollover Distribution. Effective

January 1, 2002, an Eligible Retirement Plan shall also mean an

annuity contract described in Section 403(b) of the Internal Revenue

Code of 1986, as amended, and an eligible plan under Section 457(b)

of the Internal Revenue Code of 1986, as amended, which is

maintained by a state, political subdivision of a state, or any

agency or instrumentality of a state or political subdivision of a

state and which agrees to separately account for amounts transferred

into such plan from the System. Effective for distributions after

December 31, 2007, an Eligible Retirement Plan includes a Roth IRA,

subject to any limitations described in Section 408A(c) of the

Internal Revenue Code of 1986, as amended. Effective for

distributions after December 18, 2015, an Eligible Retirement Plan

includes a SIMPLE IRA in accordance with Section 408(p)(1)(B) of the

Internal Revenue Code of 1986, as amended, for purposes of a

rollover contribution to such SIMPLE IRA, but only if such rollover

contribution is made after December 18, 2015, and only if such

rollover contribution occurs after the two-year period described in

Section 72(t)(6) of the Internal Revenue Code of 1986, as amended;

3. "Distributee" means a member whether or not the member is an

active firefighter. In addition, the member's surviving spouse and

the member's spouse or former spouse who is an alternate payee under

a qualified domestic order, as provided in subsection B of Section

49-126 of this title, are Distributees with regard to the interest

of the spouse or former spouse. A Distributee also includes the

member's nonspouse designated beneficiary, and certain trusts

described in Section 402(c)(11)(B) of the Internal Revenue Code of

1986, as amended, pursuant to Section 401(a)(9)(E) of the Internal

Revenue Code of 1986, as amended, who may elect any portion of a

payment to be made in a Direct Rollover only to an individual

retirement account or annuity (other than an endowment contract)

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described in Section 408(a) or (b) of the Internal Revenue Code of

1986, as amended (IRA) (including, effective for distributions after

December 18, 2015, a SIMPLE IRA but only if such contribution occurs

after the two-year period described in Code Section 72(t)(6) and is

made in accordance with the Protecting Americans from Tax Hikes Act

of 2015), or, effective for distributions after December 31, 2007,

to a Roth IRA, that is established on behalf of such nonspouse

designated beneficiary for the purpose of receiving the distribution

and that will be treated as an inherited IRA pursuant to the

provisions of Section 402(c)(11) of the Internal Revenue Code of

1986, as amended. Also, in this case, the determination of any

required minimum distribution under Section 401(a)(9) of the

Internal Revenue Code of 1986, as amended, that is ineligible for

rollover shall be made in accordance with Notice 2007-7, Q&A 17 and

18, 2007-5 Internal Revenue Bulletin 395. The required minimum

distribution rules of Section 401(a)(9)(B)(other than clause iv

thereof) of the Internal Revenue Code of 1986, as amended, apply to

the transferee IRA;

4. "Direct Rollover" means a payment by the System to the

Eligible Retirement Plan specified by the Distributee or, in the

case of an automatic rollover, the individual retirement plan that

the State Board designates; and

5. "Mandatory Distribution" means a distribution that is an

Eligible Rollover Distribution subject to Section 401(a)(31) of the

Internal Revenue Code of 1986, as amended, and is made without the

member's consent to a member before the member attains the later of
ed by the Distributee or, in the

case of an automatic rollover, the individual retirement plan that

the State Board designates; and

5. "Mandatory Distribution" means a distribution that is an

Eligible Rollover Distribution subject to Section 401(a)(31) of the

Internal Revenue Code of 1986, as amended, and is made without the

member's consent to a member before the member attains the later of

age sixty-two (62) or the member's normal retirement date. A

distribution to a surviving spouse, alternate payee, or a

distribution made upon a member's death is not a Mandatory

Distribution for purposes of the automatic rollover requirements of

Section 401(a)(31)(B) of the Internal Revenue Code of 1986, as

amended.

C. At least thirty (30) days before and, effective for years

beginning after December 31, 2006, not more than one hundred eighty

(180) days before the date of distribution, the Distributee (other

than a nonspouse designated beneficiary prior to July 1, 2010) must

be provided with a notice of rights which satisfies Section 402(f)

of the Internal Revenue Code of 1986, as amended, as to rollover

options and tax effects. Such distribution may commence less than

thirty (30) days after the notice is given, provided that:

1. The State Board clearly informs the Distributee that the

Distributee has a right to a period of at least thirty (30) days

after receiving the notice to consider the decision of whether or

not to elect a distribution; and

2. The Distributee, after receiving the notice, affirmatively

elects a distribution.

Oklahoma Statutes - Title 11. Cities and Towns Page 559

D. For distributions made after December 31, 2006, but prior to

July 1, 2010, a distribution with respect to a nonspouse designated

beneficiary shall be made in accordance with Notice 2007-7, Q&A 15,

2007-5 Internal Revenue Bulletin 395. Effective for plan years

beginning after December 31, 2009, a distribution with respect to a

nonspouse designated beneficiary shall be subject to Sections

401(a)(31), 402(f) and 3405(c) of the Internal Revenue Code of 1986,

as amended.

E. Effective for distributions after December 31, 2014, the

guidance under IRS Notice 2014-54 shall be followed for purposes of

determining the portion of a disbursement of benefits from the

System to a Distributee that is not includable in gross income under

Section 72 of the Internal Revenue Code of 1986, as amended.

F. In the event of a Mandatory Distribution greater than One

Thousand Dollars ($1,000.00) made on or after June 28, 2018, if the

member does not elect to have such distribution paid directly to an

Eligible Retirement Plan specified by the member in a Direct

Rollover or to receive the distribution directly, then the State

Board shall pay the distribution in a Direct Rollover to an

individual retirement plan designated by the State Board. For

purposes of determining whether a Mandatory Distribution is greater

than One Thousand Dollars ($1,000.00), the portion of the member's

distribution attributable to any rollover contribution is included.