2009 Louisiana Laws TITLE 11 Consolidated public retirement :: RS 11:1338 Internal revenue code qualification requirements

§1338.  Internal Revenue Code qualification requirements

A.  The assets of this system's pension plan shall be held for the exclusive benefit of the employees who are or become participating members of the system and their survivors and beneficiaries, and of retirees and their survivors and beneficiaries.  No part of the corpus, the system's pension plan assets held in trust, or income of the system's pension plan shall be used for or diverted to purposes other than the exclusive benefit of such members and retirees, or their survivors or beneficiaries, whether by operation or natural termination of the system's pension plan, by power of revocation or amendment, by the happening of a contingency, by collateral assignment, or by any other means.

B.  The retirement benefit earned by a member shall be fully vested and nonforfeitable no later than the date he becomes eligible to retire.  Benefits of affected members shall also become vested and nonforfeitable to the extent funded, upon the termination or partial termination of the system's pension plan or the complete discontinuance of contributions thereto.

C.  Forfeitures resulting from a termination of employment or a withdrawal of a member's own contributions may not be used to increase benefits to remaining members.  This shall not preclude an increase in benefits by amendment to the benefit formula made possible by favorable investment results or for any other reason.

D.  A member's benefit shall be distributed, or begin to be distributed, to the member not later than April first of the year following the later of the calendar year in which such member attains age seventy and one-half years or in which such member terminates employment.  Distributions to a member and the member's beneficiary shall be made in accordance with Section 401(a)(9) of the Internal Revenue Code, including Section 401(a)(9)(G) thereof relating to incidental death benefits.  Except as otherwise provided in this Subsection, payments of death benefits to the survivor of a member who dies before any retirement benefits have been paid shall begin no later than one year after the death of the member.  Payments on behalf of any deceased member, including lump-sum payments, need not begin within the one-year period if all such payments on behalf of the deceased member are completed within five years after the member's death.  Furthermore, if the deceased member's spouse is the sole survivor, benefits to the spouse may begin as late as December thirty-first of the year the member would have attained age seventy and one-half years had such member lived.  If a member dies after retirement benefits have begun, benefits must continue to be distributed to the survivor at least as rapidly as provided for under the option elected by the member before his death.

E.  Benefits in the event of termination of this system's pension plan shall be limited as follows:

(1)  In the event of a termination of this system's pension plan, the benefit of any highly compensated member or former member is limited to a benefit that is nondiscriminatory under Section 401(a)(4) of the Internal Revenue Code.  Benefits distributed to any member who was one of the twenty-five most highly compensated active and most highly compensated former employees of the employer are restricted such that the annual payments are no greater than an amount equal to the payment that would be made on behalf of the member under a single-life annuity that is the actuarial equivalent of the sum of the member's accrued benefit and the member's other benefits under the system's pension plan.

(2)  Paragraph (1) of this Subsection shall not apply if, after payment of the benefit to a member described in Paragraph (1), the value of the system's pension plan assets equals or exceeds one hundred ten percent of the value of the current liabilities, as defined in Section 412(l)(7) of the Internal Revenue Code, or if the value of the benefits for a member described in Paragraph (1) is less than one percent of the value of all current liabilities of the system.

(3)  For purposes of this Subsection, benefit includes loans in excess of the amount set forth in Section 72(p)(2)(A) of the Internal Revenue Code, any periodic income, any withdrawal values payable to a living member, and any death benefits not provided for by insurance on the member's life.

Acts 2003, No. 876, §1, eff. July 1, 2003.