2009 Louisiana Laws TITLE 11 Consolidated public retirement :: RS 11:1404 Amendment of provisions of retirement system

§1404.  Amendment of provisions of retirement system

A.  The provisions of the retirement system established by R.S. 11:1401 may be amended by action of the legislature in the same manner as any other statute may be amended by the legislature.  In addition, action of the board with respect to the payment of cost-of-living adjustments, with respect to the payment of employee contributions, with respect to actuarial assumptions, as provided in R.S. 11:1402 shall be considered amendments to the provisions of the retirement fund.

B.  No amendment to this retirement system shall operate to deprive any member of a benefit to which he is already entitled.  In the case of any merger or consolidation with, or transfer of assets or liabilities to, any other retirement system, each member in the retirement system would, if the retirement system is then terminated, receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer if the retirement system had then terminated.

C.  Upon the termination or partial termination of the retirement system, the board of trustees shall reevaluate and redetermine the benefit of each member, and the entire benefit of each member may be paid or commence to be paid and distributed to such member, or in the case of his death before such distribution, to the beneficiary or beneficiaries designated by such member, unless the member is still employed, in the case of a partial termination, in which case payment shall not be made until retirement or termination, or may be held until payment is otherwise due under the provisions of the retirement system.  A member's right to his benefit is not conditioned upon a sufficiency of plan assets in the event of termination.

D.  Upon termination or partial termination of the retirement system, a member's interest in the system shall be nonforfeitable to the extent funded.

E.(1)  Employer contributions on behalf of any of twenty-five highest paid employees at the time the plan is established and whose anticipated annual benefit exceeds one thousand five hundred dollars shall be restricted as provided in Paragraph (2) of this Subsection upon the occurrence of the following conditions:

(a)  The plan is terminated within ten years after its establishment.

(b)  The benefits of the employee described in the introductory Paragraph of this Paragraph become payable within ten years after the establishment of the plan.

(c)  If Section 412 of the Internal Revenue Code, without regard to Section 412(h)(2) thereof, does not apply to this plan, the benefits of the employee described in the introductory Paragraph  of this Paragraph become payable after the plan has been in effect for ten years and the full current costs of the plan for the first ten years have not been funded.

(2)  Employer contributions which may be used for the benefit of an employee described in Paragraph (1) of this Subsection shall not exceed the greater of twenty thousand dollars or twenty percent of the first fifty thousand dollars of the employee's compensation multiplied by the number of years between the date of the establishment of the plan and:

(a)  If Subparagraph (1)(a) of this Subsection applies, the date of the termination of the plan.

(b)  If Subparagraph (1)(b) of this Subsection applies, the date the benefits become payable.

(c)  If Subparagraph (1)(c) of this Subsection applies, the date of the failure to meet the full current costs.

(3)  If the plan is amended so as to increase the benefit actually payable in the event of the subsequent termination of the plan, or the subsequent discontinuance of contributions thereunder, the provisions of Paragraph (2) of this Subsection shall be applied to the plan as so changed as if it were a new plan established on the date of the change.  The original group of twenty-five employees as described in Paragraph (1) of this Subsection shall continue to have the limitations in Paragraph (2) of this Subsection apply as if the plan had not been changed.  The restrictions relating to the change of plan shall apply to benefits or funds for each of the twenty-five highest paid employees on the effective date of the change except that such restrictions shall not apply with respect to any employee in this group for whom the normal annual pension or annuity provided by employer contributions prior to that date and during the ensuing ten years, based on his rate of compensation on that date, could not have exceeded one thousand five hundred dollars.

(4)  The employer contributions used for the benefit of the new group of twenty-five employees shall be limited to the greater of:

(a)  The employer contributions, or funds attributable thereto, which would have applied to provide the benefits for the employee if the previous plan had been continued without change;

(b)  Twenty thousand dollars; or

(c)  The sum of (i) the employer contributions, or funds attributable thereto, which would have applied to provide benefits for the employee under the previous plan if it had been terminated the day before the effective date of change, and (ii) an amount computed by multiplying the number of years for which the current costs of the plan after that date are met by either twenty percent of his annual compensation or ten thousand dollars, whichever is smaller.

(5)  Notwithstanding the limitations provided in Paragraph (4) of this Subsection, the following limitations shall apply if they would result in a greater amount of employer contributions to be used for the benefit of the restricted employee:

(a)  In the case of a substantial owner, as defined in 29 U.S.C. 4022(b)(5), a dollar amount which equals the present value of their benefit guaranteed for such employee under 29 U.S.C. 4022, or if the plan has not terminated, the present value of the benefit that would be guaranteed if the plan terminated on the date the benefit commences, determined in accordance with the regulations of the Pension Benefit Guaranty Corporation.

(b)  In the case of the other restricted employees, a dollar amount which equals the present value of the maximum benefit described in 29 U.S.C. 4022(b)(3)(B), determined on the date the plan terminates or the date benefits commence, whichever is earlier, and determined in accordance with regulations of the Pension Benefit Guaranty Corporation, without regard to any other limitations of 29 U.S.C. 4022.

(6)(a)  If, as of the date this plan terminates, the value of plan assets is not less than the present value of all accrued benefits, whether or not nonforfeitable, distributions of assets to each member equal to the present value of that member's accrued benefit shall not be discriminatory if the formula for computing benefits as of the date of termination is not discriminatory.  All present values and the value of plan assets shall be computed using assumptions satisfying 29 U.S.C. 4044.2.

(b)  If the provisions of Subparagraph (a) of this Paragraph become applicable, the amount by which the value of plan assets exceeds the present value of accrued benefits, whether or not nonforfeitable, shall revert to the employer.

(7)  Notwithstanding the otherwise applicable restrictions on distributions of benefits incidental to early plan termination, a member's otherwise restricted benefit may be distributed in full upon depositing with an acceptable depository property having a fair market value equal to one hundred twenty-five percent of the amount which would be repayable had the plan terminated on the date of the lump sum distribution.  If the market value of the property held by the depository falls below one hundred ten percent of the amount which would be repayable if the plan were then to terminate, additional property necessary to bring the value of the property held by the depository up to one hundred twenty-five percent of such amount shall be deposited.

Acts 1997, No. 691, §1, eff. July 1, 1997.