SB 1046 Summary

• Modifies the deferred retirement option plan (DROP) provisions to transfer a deceased member's DROP account balance directly to the defined contribution retirement plan trustee, making funds immediately available to the beneficiary for withdrawal or rollover to an eligible retirement plan.

• Establishes default beneficiary succession for DROP participants who die without designating a new beneficiary: surviving spouse first, then natural or adopted children in equal shares, then the participant's estate.

• Adds provisions allowing members and beneficiaries to elect direct trustee-to-trustee rollovers of eligible rollover distributions to eligible retirement plans, including Roth individual retirement accounts and inherited IRAs for nonspouse beneficiaries.

• Clarifies that nonspouse beneficiaries may directly roll over distributions only to traditional or Roth individual retirement accounts (not other types of eligible retirement plans).

• Applies retroactively to distributions occurring on and after December 31, 2019.