2006 Louisiana Laws - RS 11:1312 — Deferred retirement option plan

§1312.  Deferred Retirement Option Plan

A.  In lieu of terminating employment and accepting a service retirement pursuant to R.S. 11:1307, any member who is eligible for a normal retirement pursuant to R.S. 11:1307 may elect to participate in the deferred retirement option plan and defer the receipt of benefits in accordance with the provisions of this Section.

B.  For purposes of this Section, creditable service shall not include service credit reciprocally recognized under R.S. 11:142.  In addition, a member who elects to participate in the deferred retirement option plan may not convert unused annual or sick leave to creditable service pursuant to R.S. 11:1333 or 1334 until the member actually terminates employment.

C.(1)  The duration of participation in the plan shall be specified and shall not exceed three years.

(2)  The three-year period begins within sixty calendar days after the first time the member becomes eligible to retire pursuant to R.S. 11:1307.  The participation period must end not more than three years and sixty calendar days from the date the member first became eligible to retire pursuant to R.S. 11:1307.

(3)  Notwithstanding the provisions of Paragraph (2) of this Subsection, any active contributing member whose initial date of employment occurred prior to September 8, 1978, and who has twenty or more years of service credit, who has not entered the deferred retirement option plan shall be eligible to enter the plan on any date chosen by the member prior to retirement and the three-year participation period of any such member shall begin upon entry therein.

D.  A person may participate in the plan only once.  Once specified, the period of participation may not be extended.  A member participating in the plan may not terminate participation prior to the end of the selected duration without terminating employment.

E.  Upon the effective date of the commencement of participation in the plan, membership in the system shall terminate and employee contributions shall cease.  For purposes of this Section, compensation and creditable service shall remain as they existed on the effective date of commencement of participation in the plan.  The monthly retirement benefits that would have been payable, had the person elected to cease employment and receive a service retirement allowance, shall be paid into a subaccount within the deferred retirement option plan, which reflects the credits attributed to the person in the plan, but the monies shall remain a part of the regular retirement fund until disbursed to the person in accordance with the provisions of this Section, and the monies shall not be subject to state income taxation while maintained in the fund or on distribution to the person.

F.  The deferred retirement option plan account shall not earn interest. A person who participates in this plan shall not be eligible to receive a cost-of-living increase while participating and shall not be eligible for a cost-of-living increase until his employment which made him eligible to become a member of the system has been terminated for at least one full year.

G.  The deferred retirement option plan fund shall not be subject to any fees, charges, or other similar expenses of any kind for any purpose.

H.(1)  Upon termination of employment at the end of the specified period of participation, a participant in the plan shall receive at his option, a lump sum payment from the Deferred Retirement Option Plan fund equal to the payments made to that fund on his behalf, or any other method of payment approved by the board of trustees.  The monthly benefits that were being paid into the Deferred Retirement Option Plan fund shall begin to be paid to the retiree.

(2)(a)  Except as provided in Subparagraph (b) of this Paragraph, after a person who entered the plan before July 1, 2003, completes participation in this program, his individual account balance in the plan shall earn interest at a rate of one-half percentage point below the percentage rate of return on the system's investment portfolio as certified by the actuary in his yearly evaluation report, said interest to be credited to his individual account balance on an annual basis.  However, any person to whom this Subparagraph applies may make a one-time irrevocable election to have his individual account balance placed in liquid asset money market investments as provided in Paragraph (3) of this Subsection.

(b)  If a member participated in the Deferred Retirement Option Plan and opts to have the monetary value of his unused sick and annual leave deposited into his plan account pursuant to R.S. 11:1335(B), then his individual account balance in the plan shall be placed in liquid asset money market investments at the discretion of the board of trustees.  Such account balances shall be credited with interest at the actual rate of return earned on such account balance investments.

(3)  After a person who entered the plan on or after July 1, 2003, completes participation in this program, his individual account balance in the plan shall be placed in liquid asset money market investments at the discretion of the board of trustees.  Such account balances shall be credited with interest at the actual rate of return earned on such account balance investments.

I.  If a participant dies during the period of participation in the plan, a lump sum equal to his account balance in the plan fund shall be paid to his named beneficiary or, if none, to his estate.  If a participant terminates employment prior to the end of the specified period of participation, he shall receive a lump sum payment from the plan fund equal to his account in that fund or any other method of payment approved by the board of trustees and the monthly benefits that were being paid into the plan fund shall begin to be paid to the retiree.

J.  If employment is not terminated at the end of the period specified for participation in the plan, payments into the plan fund shall cease and the person shall resume active contributing membership in the system.  Payments from the plan fund shall not be made until employment is terminated, nor shall the monthly benefits which were being paid into the plan fund during the period of participation be payable to the person until he terminates employment.  Upon termination of employment, the person shall receive a lump sum payment from the plan fund equal to his account in that fund or any other method of payment approved by the board of trustees.  Also upon termination of employment, the monthly benefits which were being paid into the plan fund shall begin to be paid to the retiree and he shall receive an additional benefit based on his additional service rendered since termination of participation in the fund, using the normal method of computation of benefit including the conversion of sick and annual leave accumulated during participation in the plan and since termination of participation in the plan, subject to the following:

(1)  If the member was employed prior to September 8, 1978, and his period of additional service is less than twelve months, the average salary figure used to calculate the additional benefit shall be that used to calculate his original benefit.

(2)  If the member was employed prior to September 8, 1978, and his period of additional service is twelve months or more, the average salary figure used to calculate the additional benefit shall be based on his average salary during the period of additional service.

(3)  If the member was employed on or after September 8, 1978, and his period of additional service is less than thirty- six months, the average salary figure used to calculate the additional benefit shall be that used to calculate his original benefit.

(4)  If the member was employed on or after September 8, 1978, and his period of additional service is thirty-six months or more, the average salary figure used to calculate the additional benefit shall be based on his average salary during the period of additional service.

(5)  In no event shall the additional benefit exceed an amount which, when combined with the original benefit, equals one hundred percent of the average compensation figure used to compute the additional benefit.

K.  If a person dies or becomes disabled during the period of additional service, he shall be considered as having retired on the date of death or commencement of disability.

Acts 1991, No. 74, §3 eff. June 25, 1991.  Amended by Acts 1991, No. 69, §1; Acts 1995, No. 58, §1, eff. July 1, 1995; Acts 1995, No. 961, §1, eff. June 17, 1995; Acts 1995, No. 1030, §1, eff. June 17, 1995; Acts 1995, No. 1110, §1, eff. Jan. 1, 1996; Acts 2001, No. 785, §1; Acts 2003, No. 862, §1, eff. July 1, 2003; Acts 2003, No. 962, §1, eff. Jan. 1, 2004.

NOTE:  See Acts 2003, No. 862, §3, relative to Acts 2003, No. 862 superceding conflicting provisions of any other Act of the 2003 R.S.