2006 Louisiana Laws - RS 11:1336 — Maximum benefits
§1336. Maximum benefits
A. Notwithstanding any other provision of this Title to the contrary, no member shall receive a benefit in any year in excess of the sum of the maximum employer-financed benefit and the member-financed benefit. The maximum employer-financed benefit is ninety thousand dollars adjusted as described below. The member-financed benefit is the annual benefit that may be provided by annuitizing the member's after-tax accumulated contributions. Any benefit reduction required by this Section shall, to the extent possible, reduce the monthly benefit to which the member would otherwise have been entitled and shall not affect the member's Deferred Retirement Option Plan account.
B. If the annual benefit begins before the member attains age sixty-two, the ninety thousand dollar limit provided for in Subsection A of this Section, as adjusted, shall be reduced in a manner prescribed by the secretary of the United States Treasury. However, that adjustment may not reduce the member's annual benefit below seventy-five thousand dollars if the member's benefit begins at or after age fifty-five, or the actuarial equivalent of seventy-five thousand dollars beginning at age fifty-five if benefits begin before age fifty-five. If the annual benefit begins after the member attains age sixty-five, the ninety thousand dollar limit, as adjusted, shall be increased so that it is actuarially equivalent to the ninety thousand dollar limit at age sixty-five. The ninety thousand dollar limit on annual benefits, but not the seventy-five thousand dollar limit, shall be adjusted annually as provided by Section 415(d) of the Internal Revenue Code and the regulations prescribed by the secretary of the United States Treasury to reflect cost-of-living adjustments. The adjusted limit shall be effective on January first of each calendar year and shall be applicable to benefits beginning during that calendar year. As a result of a cost-of-living increase, a benefit that had been limited by the provisions of this Section in a previous year may be increased with respect to future payments to the lesser of the new limit or the amount of benefits that would have been payable pursuant to the provisions of the pension plan contained in this Chapter without regard to the provisions of this Section. Annual benefits may not be paid in an amount greater than the accrued benefit under the pension plan. The maximum limit shall apply to a single-life benefit. If the benefit is payable in a form other than a single-life annuity, the maximum limit shall apply to the pension that is the actuarial equivalent of such single-life annuity, using an applicable interest rate and mortality table as prescribed by the Internal Revenue Service; however, the limit shall not be reduced for any benefit received as a disability retirement allowance or any payments received by the beneficiaries, survivors, or estate of a member as a result of the death of the member.
C. This system may still pay an annual benefit under the pension plan to any member in excess of the limit otherwise allowed under this Section if the annual benefit derived from the employer contributions under this and all other qualified plans subject to the limitations of Section 415(b) of the Internal Revenue Code does not in the aggregate exceed ten thousand dollars for the plan year or for any prior year, and the member has not at any time participated in a defined contribution plan maintained by the employer. For purposes of this Subsection only, a member's own contributions to the system's pension plan are not considered a separate defined contribution plan maintained by the employer.
D. If a member is or has been a participant in one or more defined contribution plans maintained by the employer, the sum of the member's contributions pursuant to the pension plan in this Chapter and any other qualified defined benefit plans of the employer and the annual additions under the defined contribution plan or plans may not exceed the lesser of twenty-five percent of the member's earned compensation or thirty thousand dollars, as adjusted by the secretary of the United States Treasury. Further, the addition of the defined benefit plan fraction, as defined in Section 415 of the Internal Revenue Code, plus the defined contribution plan fraction, as defined in Section 415 of the Internal Revenue Code, for any plan year in which Section 415(e) of the Internal Revenue Code is in effect, may not exceed a sum total of one for any calendar year in which the limits of Section 415(d) of the Internal Revenue Code are in effect. If the sum of the defined benefit plan fraction and the defined contribution plan fraction exceeds one in any such year for any member, or if the benefits under this plan and one or more other defined benefit plans would otherwise exceed the maximum employer-financed benefit, and the administrator of the other plan does not reduce the contributions or benefits under the other plan, the employer-financed benefit of this Chapter shall be reduced to the extent necessary to ensure that the limitations under Section 415 of the Internal Revenue Code are met.
E.(1) If the United States Congress or the Internal Revenue Service later amends laws, regulations, or guidelines pertaining to Section 415 of the Internal Revenue Code in order to allow higher service retirement benefits, then, for any retired member who previously had a benefit reduced because it exceeded the limits in this Section, the board shall recalculate the retired member's benefit to be the lesser of:
(a) The unreduced benefit based on the pension plan's service retirement benefit formula in effect on the date the member retired, or
(b) The maximum permissible benefit calculated under the amended laws or regulations.
(2) If a retroactive change is permissible, the board shall pay the retired member in a single payment an amount equal to the difference between the adjusted higher monthly benefit and the reduced benefit for the number of months the member received the reduced benefit. Notwithstanding the foregoing, no member shall receive any benefit under this Section to the extent that he has received a distribution with respect to such benefit from an excess benefit plan.
Acts 2003, No. 876, §1, eff. July 1, 2003.
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