
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 5USC8434]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                           PART III--EMPLOYEES
 
                   Subpart G--Insurance and Annuities
 
            CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM
 
                   SUBCHAPTER III--THRIFT SAVINGS PLAN
 
Sec. 8434. Annuities: methods of payment; election; purchase

    (a)(1) The Board shall prescribe methods of payment of annuities 
under this subchapter.
    (2) The methods of payment prescribed under paragraph (1) shall 
include, but not be limited to--
        (A) a method which provides for the payment of a monthly annuity 
    only to an annuitant during the life of the annuitant;
        (B) a method which provides for the payment of a monthly annuity 
    to an annuitant for the joint lives of the annuitant and the spouse 
    of the annuitant and an appropriate monthly annuity to the one of 
    them who survives the other of them for the life of the survivor;
        (C) a method described in subparagraph (A) which provides for 
    automatic adjustments in the amount of the annuity payable so long 
    as the amount of the annuity payable in any one year shall not be 
    less than the amount payable in the previous year;
        (D) a method described in subparagraph (B) which provides for 
    automatic adjustments in the amount of the annuity payable so long 
    as the amount of the annuity payable in any one year shall not be 
    less than the amount payable in the previous year; and
        (E) a method which provides for the payment of a monthly 
    annuity--
            (i) to the annuitant for the joint lives of the annuitant 
        and an individual who is designated by the annuitant under 
        regulations prescribed by the Executive Director and (I) is a 
        former spouse of the annuitant, or (II) has an insurable 
        interest in the annuitant; and
            (ii) to the one of them who survives the other of them for 
        the life of the survivor.

    (b) Subject to section 8435(b) of this title, under such regulations 
as the Executive Director shall prescribe, an employee, Member, former 
employee, or former Member who elects under section 8433 of this title 
to receive an annuity under this subchapter shall elect, on or before 
the date on which an annuity contract is purchased to provide for that 
annuity, one of the methods of payment prescribed under subsection (a).
    (c) Notwithstanding the elimination of a method of payment by the 
Board, an employee, Member, former employee, or former Member may elect 
the eliminated method if the elimination of such method becomes 
effective less than 5 years before the date on which that individual's 
annuity commences.
    (d)(1) Not earlier than 90 days (or such shorter period as the 
Executive Director may by regulation prescribe) before an annuity is to 
commence under this subchapter, the Executive Director shall expend the 
balance in the annuitant's account to purchase an annuity contract from 
any entity which, in the normal course of its business, sells and 
provides annuities.
    (2) The Executive Director shall assure, by contract entered into 
with each entity from which an annuity contract is purchased under 
paragraph (1), that the annuity shall be provided in accordance with the 
provisions of this subchapter and subchapter VII of this chapter.
    (3) An annuity contract purchased under paragraph (1) shall include 
such terms and conditions as the Executive Director requires for the 
protection of the annuitant.
    (4) The Executive Director shall require, from each entity from 
which an annuity contract is purchased under paragraph (1), a bond or 
proof of financial responsibility sufficient to protect the annuitant.
    (e)(1) No tax, fee, or other monetary payment may be imposed or 
collected by any State, the District of Columbia, or the Commonwealth of 
Puerto Rico, or by any political subdivision or other governmental 
authority thereof, on, or with respect to, any amount paid to purchase 
an annuity contract under this section.
    (2) Paragraph (1) shall not be construed to exempt any company or 
other entity issuing an annuity contract under this section from the 
imposition, payment, or collection of a tax, fee, or other monetary 
payment on the net income or profit accruing to or realized by that 
entity from the sale of an annuity contract under this section if that 
tax, fee, or payment is applicable to a broad range of business 
activity.

(Added Pub. L. 99-335, title I, Sec. 101(a), June 6, 1986, 100 Stat. 
546; amended Pub. L. 100-238, title I, Sec. 129, Jan. 8, 1988, 101 Stat. 
1759; Pub. L. 101-335, Secs. 4(a), 5(b), July 17, 1990, 104 Stat. 321; 
Pub. L. 103-226, Sec. 9(c), (i)(8), Mar. 30, 1994, 108 Stat. 120, 122.)


                               Amendments

    1994--Subsec. (b). Pub. L. 103-226, Sec. 9(i)(8), substituted 
``section 8435(b)'' for ``section 8435(c)''.
    Subsec. (c). Pub. L. 103-226, Sec. 9(c), amended subsec. (c) 
generally. Prior to amendment, subsec. (c) read as follows: 
``Notwithstanding an elimination of a method of payment by the Board--
        ``(1) an employee, Member, former employee, or former Member who 
    is entitled under section 8412 of this title to an immediate annuity 
    not reduced under section 8415(f) of this title may elect the 
    eliminated method if the elimination of such method became effective 
    less than 5 years before the date on which the annuity commences; 
    and
        ``(2) any other employee, Member, former employee, or former 
    Member may elect such method of payment for amounts contributed by 
    or on behalf of the employee, Member, former employee, or former 
    Member under section 8432 of this title before such effective date 
    and for earnings attributable to such amounts.''
    1990--Subsec. (b). Pub. L. 101-335, Sec. 5(b)(1), substituted ``an 
annuity contract is purchased to provide for that annuity,'' for ``the 
annuity commences,''.
    Subsec. (d)(1). Pub. L. 101-335, Sec. 5(b)(2), substituted ``Not 
earlier than 90 days (or such shorter period as the Executive Director 
may by regulation prescribe) before an annuity'' for ``At the time an 
annuity''.
    Subsec. (e). Pub. L. 101-335, Sec. 4(a), added subsec. (e).
    1988--Subsec. (a)(2)(C), (D). Pub. L. 100-238 amended subpars. (C) 
and (D) generally. Prior to amendment, subpars. (C) and (D) read as 
follows:
    ``(C) a method described in subparagraph (A) which provides annual 
increases in the amount of the annuity payable;
    ``(D) a method described in subparagraph (B) which provides annual 
increases in the amount of the annuity payable; and''.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-226 effective Mar. 10, 1995, see section 
9(j) of Pub. L. 103-226, set out as a note under section 8351 of this 
title.


                    Effective Date of 1990 Amendment

    Section 4(b) of Pub. L. 101-335 provided that: ``The amendment made 
by subsection (a) [amending this section] shall take effect 30 days 
after the date of enactment of this Act [July 17, 1990].''
    Amendment by section 5(b) of Pub. L. 101-335 effective Apr. 1, 1987, 
see section 5(d) of Pub. L. 101-335, set out as a note under section 
8433 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 8433, 8435, 8436 of this 
title.
