A participant may designate a beneficiary to receive the participant's benefits under the program in case of the death of the participant. If no beneficiary is designated or the beneficiary has predeceased the participant, the participant's benefits shall be paid as follows:
(1) To the participant's surviving spouse;
(2) If there is no surviving spouse, then to all surviving children of the participant, irrespective of age, on a share-alike basis; or
(3) If there is no surviving spouse and there are no surviving children, then to the participant's estate.