§ 38. Exemption from assignment and execution.

(a) In general.

(1) A person may not attach, execute, garnish, or otherwise seize any current or future benefit provided by this system or any money in a fund or an account created by this system.

(2) All current and future benefits provided by this system and all money in a fund or an account created by this system are unassignable, except as specified in this section.

(b) Exceptions – Payroll deductions.

A retiree or beneficiary may elect to have the Board of Trustees deduct from his or her allowance, lump-sum benefit payment, or return of contributions, any payroll deduction or payment authorization authorized by the City for its employees, if the retiree or beneficiary has consented to the deduction in writing on a form approved by the Director of Finance.

A court of competent jurisdiction may expressly order that a benefit or payment by the system be assigned pursuant to:

(1) a decree or order of alimony or child support;

(2) a domestic relations order as defined in subsection (d) of this section; or

(3) a court order appointing the assignee as guardian over the property of the member.

(d) Exceptions – Domestic relations orders.

A member's court-approved property settlement agreement incident to a divorce decree or a division of marital property pursuant to a court order authorizing the payment of pension benefits to an alternate payee (as defined in the Internal Revenue Code, 26 U.S.C. §414(p)(8), as amended) shall be accepted by the Board as a domestic relations order if that decree or order:

(1) does not require the system to provide any type or form of benefit or any options not already provided by this subtitle;

(2) requires the system to provide no more than the total amount of benefits that the member would otherwise receive (determined on the basis of actuarial values);

(3) specifies the amount or percentage of the member's benefits to be paid by the system to an alternate payee or the manner in which the amount or percentage is to be determined;

(4) specifies (or, to protect the parties' privacy, requires submission by separate writing of) the name, social security number, birth date, and last known mailing address of the member and of the alternate payee covered by the order and states that it is the responsibility of the alternate payee to keep a current mailing address on file with the system;

(5) does not grant an alternate payee any of the rights, options, or privileges of a retiree or beneficiary under this subtitle other than an assigned percentage or amount of the member's pension benefit or survivorship benefit;

(6) does not require the system to commence payment of any type or form of benefit to an alternate payee prior to a member's actual date of retirement or death; and

(7) does not require the system to treat the alternate payee as a surviving spouse.

(e) Exceptions – Federal tax liens.

In satisfaction of a U.S. Internal Revenue Service Notice of Levy for unpaid taxes of a member or beneficiary that has terminated employment, the system may pay all or part of:

(1) a member's or beneficiary's benefits from the system; or

(2) a member's refund of accumulated contributions, in which case the non-tax-deferred portion of those contributions shall be deemed to have been paid in satisfaction of the levy before any tax-deferred contributions.

(f) Exceptions – Power of attorney.

The system may pay the benefits otherwise due a member or beneficiary to that member's or beneficiary's attorney-in-fact, as agent of the member or beneficiary, if the member or beneficiary properly designated the attorney-in-fact to act as agent under a duly executed durable power of attorney.

(g) Exceptions – Custodian under Uniform Transfers to Minors' Act.

The system may pay the benefits otherwise due a minor beneficiary to a custodian validly appointed for the minor under the Maryland Uniform Transfers to Minors Act, Title 13, Subtitle 3, of the Maryland Estates and Trusts Article or similar out-of-state provision.

(h) Exceptions – Trustee.

The system may pay the benefits otherwise due a member or beneficiary to the member's or beneficiary's trustee, as trustee of the member or beneficiary, if the trustee was designated trustee of the member or beneficiary under an enforceable inter vivos or testamentary trust agreement.

(i) Exceptions – Representative Payee.

The system may pay the benefits otherwise due a member or beneficiary to the member's or beneficiary's social security "representative payee" pursuant to The Social Security Act, 42 U.S.C. §405(j), as amended.

(j) Exceptions – Payments of funeral expenses.

The system may pay all or part of a death benefit payable on account of the death of a member to a funeral establishment providing funeral services to the deceased member, if the beneficiary of the member has consented to that payment in writing on a form approved by the Board.

(k) Notice to Board of Trustees.

An assignment under this section applies only to benefits paid after the Board of Trustees receives:

(1) written notice of the court decree or order, power of attorney, custodial instrument of designation, trust document, payee representative certification, assignment to funeral establishment, or notice of tax levy; and

(2) any additional information that the Board of Trustees requires.

(l) Notice of fraud or misuse.

If the Board of Trustees, the Social Security Administration, or a court of competent jurisdiction determines that funds paid to any person under this section have been misused, payment of benefits will be promptly revoked.

(m) Limitation on Board's liability.

The Board of Trustees is not liable for an improper payment to a person that results from the Board's nonreceipt of:

(2) any additional information that the Board required in order to execute the payment.