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2003 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 51.1-124.4 of the Code of Virginia is amended and reenacted as follows:
§ 51.1-124.4. Exemption of assets from taxation; exemption of benefits and assets from execution and assignment; trust funds; unclaimed property.
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 (§ 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 § 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 (§ 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 § 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 Uniform Disposition of Unclaimed Property Act (§ 55-210.1 et seq.), may recover it.
B. Notwithstanding the provisions of subsection A, any employee who elects to
participate in a retirement plan as provided in § 51.1-126 or § 51.1-126.1 may
direct the Retirement System to transfer the member's accumulated contributions
to that plan. Any employee who terminates employment may direct the Retirement
System to transfer the member's accumulated contributions to any qualified
pension or other qualified retirement plan or to an individual retirement
account. The Retirement System shall transfer the member's accumulated
contributions to the qualified pension or other qualified retirement plan or
individual retirement account as directed. Notwithstanding any provision of
this chapter to the contrary that would otherwise limit a distributee'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 "eligible rollover distribution," "eligible
retirement plan" and "distributee" have the meanings prescribed by § 401(a)(31)
of the Internal Revenue Code and the regulations thereunder, as may be amended.