                                 CODE OF VIRGINIA

EXEMPTION OF ASSETS FROM TAXATION; EXEMPTION OF BENEFITS AND ASSETS FROM
EXECUTION AND ASSIGNMENT; TRUST FUNDS; UNCLAIMED PROPERTY; ELIGIBLE ROLLOVER
DISTRIBUTION (§ 51.1-124.4)

A. The assets of the retirement systems created under this title are hereby
exempted from any state, county, or municipal tax. Retirement allowances and
other benefits accrued or accruing to any person under this title and the assets
of the retirement systems created under this title shall not be subject to
execution, attachment, garnishment, or any other process whatsoever, except any
process for a debt to any employer who has employed such person, and except for
administrative actions pursuant to Chapter 19 (&#xA7; 63.2-1900 et seq.) of
Title 63.2 or any court process to enforce a child or child and spousal support
obligation, nor shall any assignment thereof, other than a voluntary,
irrevocable assignment of group life insurance pursuant to &#xA7; 51.1-510, be
enforceable in any court. However, retirement benefits and assets created under
this title which are deemed to be marital property pursuant to Chapter 6 (&#xA7;
20-89.1 et seq.) of Title 20 may be divided or transferred by the court by
direct assignment to a spouse or former spouse pursuant to &#xA7; 20-107.3. The
assets of the retirement systems administered by the Board are trust funds and
shall be used solely for the benefit of members and beneficiaries and to
administer the retirement systems. The Board shall establish procedures whereby
persons entitled to property held by the Board, which would be presumed
abandoned under the Virginia Disposition of Unclaimed Property Act (&#xA7;
55.1-2500 et seq.), may recover it.

B. Notwithstanding any provision of this chapter to the contrary that would
otherwise limit a distributee&#8217;s election, a distributee may elect, at the
time and in the manner prescribed by the 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. The terms &#8220;eligible
rollover distribution,&#8221; &#8220;eligible retirement plan&#8221; and
&#8220;distributee&#8221; have the meanings prescribed by &#xA7; 401(a)(31) of
the Internal Revenue Code (including as such section is amended or renumbered,
or any successor provision thereto) and the regulations thereunder, as may be
amended. Such terms shall include non-spouse designated beneficiaries and
inherited individual retirement accounts in accordance with &#xA7; 402(c)(11) of
the Internal Revenue Code, as amended or renumbered, and the regulations
thereunder applicable to governmental plans. In the event of a mandatory
cash-out, as that term is defined under the Internal Revenue Code and the
regulations thereunder applicable to governmental plans, greater than $1,000, 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 in accordance with this section, then the Board shall pay
the distribution in a direct rollover to an individual retirement plan
designated by the Board in accordance with subsection F of &#xA7; 51.1-124.30.

C. The provisions of this chapter and Chapters 2 (&#xA7; 51.1-200 et seq.), 2.1
(&#xA7; 51.1-211 et seq.) and 3 (&#xA7; 51.1-300 et seq.) are intended to meet
the requirements of &#xA7; 401(a) of the Internal Revenue Code, as amended or
renumbered, and the regulations thereunder applicable to governmental plans.

HISTORY: 1952, c. 157, §§ 51-111.15, 51-111.24; 1954, c. 633; 1959, Ex. Sess.,
c. 47; 1962, c. 50; 1972, c. 151; 1973, c. 523; 1976, c. 545; 1977, c. 620;
1978, c. 841; 1980, cc. 559, 596; 1983, c. 308, § 51-111.26:1; 1984, c. 430;
1986, c. 474; 1989, Sp. Sess., c. 3; 1990, c. 832, § 51.1-102; 1991, c. 433;
1992, cc. 716, 811; 1993, c. 135; 1994, cc. 4, 85, 883; 2003, c. 15; 2006, c.
637; 2015, c. 660.