2006 Louisiana Laws - RS 11:446 — Mode of payment where option elected
§446. Mode of payment where option elected
A. Upon application for retirement any member may elect to receive his benefit in a retirement allowance payable throughout his life, or he may elect at that time to receive the actuarial equivalent of his retirement allowance in a reduced retirement allowance payable throughout life, with the provision that:
(1) Option 1. If he dies before he has received in annuity payments the value of the member's annuity as it was at the time of his retirement, the balance shall be paid to his legal representatives or to the person he nominates by written designation duly acknowledged and filed with the board; or
(2)(a) Option 2-A. Upon his death his reduced retirement allowance shall be continued throughout the life of and paid to the person he nominated by written designation duly acknowledged and filed with the board of trustees at the time of his retirement; or
(b) Option 2-B. Upon his death his reduced retirement allowance shall be continued throughout the life of and paid to the person he nominated by written designation and, upon the death of that designated person, his reduced benefit shall be continued throughout the life of the deceased member's mentally handicapped child or children, but such benefits shall be paid to the guardian of such child or children. The written designation provided for in this Subparagraph shall be duly acknowledged and filed with the board of trustees at the time of the member's retirement.
(c) Unless otherwise specified, any reference in law to this Paragraph or to Option 2, without reference to a particular Subparagraph or to Option 2-A or Option 2-B shall mean Subparagraph (a) of this Paragraph or Option 2-A.
(3) Option 3. Upon his death one-half of his reduced retirement allowance shall be continued throughout the life of and be paid to the person he nominated by written designation duly acknowledged and filed with the board of trustees at the time of his retirement; or
(4) Option 4. Some other benefit or benefits shall be paid either to the member or to the person or persons he nominated, provided the other benefit or benefits, together with the reduced retirement allowance, shall be certified by the actuary to be of equivalent actuarial value to his retirement allowance and shall be approved by the board.
(5) Initial Benefit Option. (a) The initial benefit option provided in this Paragraph is available to a member who has not participated in the Deferred Retirement Option Plan provided in this Chapter and who selects the maximum benefit or one of the options in Paragraphs (2), (3), or (4) of this Subsection and, if this initial benefit option is selected, the person shall thereafter be ineligible to participate in the Deferred Retirement Option Plan under this Chapter.
(b) If a member selects the initial benefit option provided in this Paragraph, the member may receive an initial benefit plus a reduced monthly retirement allowance, provided the initial benefit together with the reduced monthly retirement allowance shall be actuarially equivalent to his maximum retirement allowance.
(c) The amount of the initial benefit, as determined by the member, shall not exceed an amount equal to thirty-six payments of the member's maximum retirement allowance.
(d) The initial benefit shall, at the option of the member, be paid as a lump-sum payment or shall be placed in an account in accordance with R.S. 11:449 with interest credited in accordance therewith and payments from the account shall be made in accordance with R.S. 11:450(A)(1).
(e) The monthly retirement benefit received by the retiree and the beneficiary/survivor shall be based on the amount otherwise payable under the retirement option selected that is actuarially reduced by an amount calculated to offset the cost of the initial benefit.
(f) If a member elects the initial benefit option and retires under the provisions of R.S. 11:558 or 582, the monthly benefit of the retiree and the survivors payable under the provisions of R.S. 11:562 or 591 shall be actuarially reduced under the provisions of Subparagraphs (b) and (e) of this Paragraph.
(g) If a change in option selection is allowed under the provisions of Subsection D or E of this Section, the monthly benefit payable under those provisions shall be actuarially reduced in accordance with the provisions of this Paragraph.
(h) A person who retires under the provisions of disability retirement may not select the initial benefit option.
(i) A person who selects this option and subsequently returns to state employment shall be governed by the reemployment after retirement provisions of R.S. 11:416(A)(1) and (3).
(j) Cost-of-living adjustments granted by the board of trustees to retirees who select the initial benefit option shall be computed on the basis of each retiree's regular monthly retirement benefit or on the basis of each beneficiary/survivor's benefit based on the option selected as reduced and shall not be computed on the initial benefit received either as a lump-sum or paid pursuant to R.S. 11:450(A)(1).
B. A retiree cannot change the designation of beneficiary unless the retirement was approved under Option 1.
C. No change in the option elected by the member, other than to correct administrative error, shall be permitted after the application has been officially filed with the board.
D. If the beneficiary dies at any time before the death of the retiree, the benefits payable to the retiree shall be increased to the amount the retiree would have received had the retiree selected the maximum benefit. It shall be the responsibility of the retiree to notify the system of the death of the beneficiary, to furnish the beneficiary's death certificate, and to request the recomputation of benefits. Adjustment of benefits under this Subsection shall not be retroactive and shall be effective on the first day of the next month following official approval of the application for recomputation of benefits.
E. If an option of Subsection A hereof was selected, and the retiree's spouse was designated as the beneficiary, and a judgment of divorce is rendered with respect to the retiree and the spouse, and, in connection therewith, the spouse, irrevocably, by court order, relinquishes the spouse's survivorship rights under the option originally selected by the retiree, the originally selected option shall be considered revoked and the retiree shall be considered as retired under the maximum benefit, subject to reduction as hereinafter set forth, and without affording the retiree the right to select an option under which the retiree could designate a new beneficiary, and the benefits payable to the retiree shall be increased to the amount the retiree would have received had the retiree selected the maximum benefit, adjusted for any cost-of-living increase granted to the retiree, less any amount required as a result of such change in retirement status to render the new benefit to be the actuarial equivalent of the maximum benefit. The retiree shall be required to reimburse the system, by way of a one-time deduction from the retiree's next benefit check, the reasonable costs incurred by the system to have these calculations made. The retiree shall be required to contractually hold the system harmless in the event that the former spouse ever successfully asserts a property right relative hereto which has any adverse effect upon the system. It shall be the responsibility of the retiree to notify the system of these circumstances, to present satisfactory evidence of same, and to request the recomputation of benefits. Adjustment of benefits under this Subsection shall not be retroactive, and shall be effective on the first day of the next month following official approval of the application for recomputation of benefits.
F. If the member is married, the designated beneficiary for a qualified joint and survivor annuity and any Deferred Retirement Option Plan benefits payable in accordance with law shall be his spouse, unless such spouse has consented to the contrary in writing before a notary public, or such spouse cannot be located and the member submits an original affidavit signed by him before a notary public which evidences good faith efforts to locate the spouse. If the member does not select a joint and survivor annuity option and fails to provide such a spousal consent at the time of his retirement and his spouse survives him, then for the purposes of a retirement benefit option the system shall establish the benefit as if the member had selected the Option 3 joint and survivor annuity as provided in Paragraph (3) of Subsection A of this Section. For purposes of this Paragraph, "spouse" shall mean that person who is married to the member under a legal regime of community of acquets and gains on his effective date of retirement or effective date of participation in the Deferred Retirement Option Plan, whichever is earlier.
Acts 1972, No. 135, §1, eff. July 26, 1972. Amended by Acts 1975, No. 455, §1; Acts 1982, No. 399, §1; Acts 1989, No. 218, §1; Acts 1991, No. 404, §2, eff. Jan. 1, 1992; Acts 1991, No. 529, §2, eff. Jan. 1, 1992; Redesignated from R.S. 42:577 by Acts 1991, No. 74, §§3, 5, eff. June 25, 1991; Acts 1995, No. 1110, §1, eff. Jan. 1, 1996; Acts 2001, No. 412, §1, eff. June 15, 2001; Acts 2004, No. 266, §1, eff. July 1, 2004; Acts 2006, No. 770, §1, eff. June 30, 2006.
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