2006 Louisiana Laws - RS 11:3385.1 — Deferred retirement option plan

§3385.1.  Deferred Retirement Option Plan

A.  In lieu of terminating employment and accepting a service retirement allowance under R.S. 11:3381 and 3384, any member of this system who has not less than twenty years of creditable service, including not less than fifteen years of service in this system, and who is eligible to receive a service retirement benefit 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 include service credit reciprocally recognized under R.S. 11:142, but for eligibility purposes only.

C.  The duration of participation in the Deferred Retirement Option Plan shall not exceed five years.  A member may terminate his participation in the Deferred Retirement Option Plan at any time by written notification to the board of trustees.

D.  A member may participate in the Deferred Retirement Option Plan only once.

E.  Upon the effective date of the commencement of participation in the Deferred Retirement Option Plan, membership in this system shall terminate and neither employee nor employer contributions shall be payable to the member's individual account balance in the Deferred Retirement Option Plan.  For purposes of this Section, compensation and creditable service shall remain as they existed on the effective date of commencement of participation in the Deferred Retirement Option Plan.  The monthly retirement benefits that would have been payable from this system,  had the member elected to cease employment and receive a service retirement allowance, shall be paid into the member's individual account in the Deferred Retirement Option Plan.  Upon termination of employment from the fire department, deferred benefits shall be payable as provided by Subsection H of this Section.

F.  A person who participates in the Deferred Retirement Option Plan shall not be eligible to receive a cost-of-living increase from the retirement system while participating and shall not be eligible until his employment which makes him eligible to be a member of this system has been terminated for at least one full year.

G.  The individual account balance in the Deferred Retirement Option Plan shall not be subject to any fees, charges, or similar expenses of any kind for any purpose during the member's participation in the Deferred Retirement Option Plan as a member of the fire department, nor shall the individual account balance earn interest or earnings of any kind during such period of participation.  Upon completion of participation in the Deferred Retirement Option Plan, the individual account of any member who continues employment with the fire department shall earn interest each year based on the one-year composite rate of return of the pension fund, minus a two percent administration fee to be deducted from the individual account each year.

H.  Upon termination of employment from the fire department, a participant in the Deferred Retirement Option Plan shall receive a lump sum payment equal to the payments made to his individual account in the Deferred Retirement Option Plan, plus any interest earned, and minus any administrative fees deducted from his account, upon his written application therefor.  Such application may be made at any time after the member's employment with the fire department terminates.  Thereafter, the monthly benefits that were being paid into the individual account balance in the Deferred Retirement Option Plan during the period of participation shall begin being paid to the retiree.

I.  If a member dies during the period of participation in the Deferred Retirement Option Plan, a lump sum payment equal to the payments made to his individual account in the Deferred Retirement Option Plan shall be paid  to his named beneficiary or, if none, to his estate upon written application to the fund office; in addition, normal survivor benefits payable to survivors of retirees under this retirement system shall be payable.

J.  Any payment to be made from a member's individual account balance in the Deferred Retirement Option Plan shall be made as a  lump sum payment.  The member or his beneficiary may, however, elect to receive only a part of the individual account balance, subject to the rules and regulations established by the board of trustees.

K.(1)  If employment is not terminated at the end of the period of participation, payments into the individual account balance in the Deferred Retirement Option Plan shall cease.

(2)  Payment from the individual account balance in the Deferred Retirement Option Plan shall not be made until employment is terminated, nor shall the monthly benefits being paid into the Deferred Retirement Option Plan during the period of participation be payable to the individual until he terminates employment.

(3)  If employment is not terminated at the end of the period of participation, the member shall resume active membership in the system and accrual of further benefits pursuant to the rules of this retirement system, and subject to the provisions of Paragraph (7) of this Subsection.  As provided by Subsection G of this Section, the individual account of a member whose employment is not terminated at the end of the period of participation shall earn interest and shall be assessed administrative fees for each year the member remains an active member in the system.

(4)  Upon termination of employment following the period of participation in the Deferred Retirement Option Plan, a lump sum payment equal to the payments made to his individual account in the Deferred Retirement Option Plan during the period of participation shall begin to be paid to the retiree.  The retiree may not change the distribution option originally selected except as provided in Subparagraph (7)(d) of this Subsection, nor may the retiree change any beneficiary designation originally made when he commenced participation in the Deferred Retirement Option Plan except as provided in Subparagraph (7)(d) of this Subsection.

(5)  If the member's employment terminates by reason of his death following the period of participation in the Deferred Retirement Option Plan, a lump sum payment equal to the balance in his individual account in the Deferred Retirement Option Plan shall be paid  to his named beneficiary or, if none, to his estate, upon written application made to the fund office; in addition, normal survivor benefits payable to survivors of retirees under this retirement system shall be payable.

(6)  If the member becomes disabled and terminates his employment following the period of participation in the Deferred Retirement Option Plan, a lump sum payment equal to the payments made to his individual account in the Deferred Retirement Option Plan shall be paid to the member upon written application to the fund office.  The monthly benefits that were being paid into the Deferred Retirement Option Plan during the period of participation shall begin being paid to the retiree.

(7)  Upon termination of employment, the retiree shall receive an additional retirement benefit based solely on any additional service rendered since termination of participation in the Deferred Retirement Option Plan, using the normal method of computation of the benefits, subject to the following:

(a)  If the member was first employed after December 31, 1967, and his period of additional service is less than forty-eight months, the average compensation figure used to calculate the additional benefit shall be that used to calculate his original benefit.  If his period of additional service is forty-eight or more months, the average compensation figure used to calculate the additional benefit shall be based on his compensation during the period of additional service.

(b)  If the member was first employed before December 31, 1967, and his period of additional service is less than one year, the average compensation figure used to calculate the additional benefit shall be that used to calculate his original benefit.  If his period of additional service is twelve or more months, the average compensation figure used to calculate the additional benefit shall be based on his compensation during the period of additional service.

(c)  The distribution option originally selected when the member commenced participation in the Deferred Retirement Option Plan shall also apply to any additional benefits accrued for additional service.

(d)  The beneficiary designated to receive the additional retirement benefit shall be the same beneficiary designated to receive the original benefit, unless that beneficiary has predeceased the member.  In that event, he shall designate a new beneficiary.

(e)  If the member was first employed before December 31, 1967, and originally elected to retire with benefits under the new system applicable to employees employed after that date, the election shall also apply to any additional benefits accrued for additional service.  If he elected to retire with benefits applicable to employees employed before December 31, 1967, the election shall also apply to any additional benefits accrued for additional service.

(f)  If the member is found by the board to be disabled pursuant to R.S. 11:3376, the service-connected disability benefit shall be limited to the additional amount payable pursuant to R.S. 11:3381 or 3384 based on service rendered since termination of participation in the Deferred Retirement Option Plan.  The lump sum payment made from the individual account balance in the Deferred Retirement Option Plan shall be paid to the member within one year of termination of employment, and the monthly payments that were being paid into the Deferred Retirement Option Plan during the period of participation shall begin to be paid to the retiree.  The board's service-connected disability determination made pursuant to this Subparagraph shall apply to all benefits paid to the member based on service rendered both before and since termination of participation in the Deferred Retirement Option Plan.

(g)  In no event shall the additional benefit exceed an amount which, when combined with the original benefit, equals one hundred percent of the average of any three highest consecutive years of compensation earned by a member electing to retire under the old system, or one hundred percent of the average of any four highest consecutive years of compensation earned by a member retiring under the new system, both during participation and after leaving the Deferred Retirement Option Plan.

L.  In lieu of terminating employment and accepting a service retirement allowance under R.S. 11:3381 and 3384, any member of this system who has not less than twenty years of creditable service, including not less than fifteen years of service in this system, who receives a career-ending service injury while participating in the Deferred Retirement Option Plan, and who is eligible to receive a service retirement benefit may elect to participate in the Deferred Retirement Option Plan on a retroactive basis, and receive a lump sum benefit of up to five years, based upon the value of the pension at the retroactive date selected.

M.  Notwithstanding any other provision of law to the contrary, a member may participate in the Deferred Retirement Option Plan provided by this Section and also make an election to receive an initial lump sum benefit as set forth in R.S. 11:3385.2.

Acts 1995, No. 1035, §1, eff. June 29, 1995; Acts 1997, No. 607, §1; Acts 1999, No. 1377, §1; Acts 2003, No. 782, §1, eff. June 27, 2003; Acts 2003, No. 1104, §1, eff. July 2, 2003; Acts 2003, No. 1110, §1; Acts 2004, No. 609, §1, eff. July 5, 2004.