2012 Louisiana Laws
Revised Statutes
TITLE 11 — Consolidated public retirement
RS 11:1399.3 — Cash balance plan account accumulation

§1399.3. Cash balance plan account accumulation

A. Contributions. (1) Each employee shall contribute to the retirement system the amount specified in R.S. 11:62 for cash balance plan members.

(2) Employer contributions to each retirement system shall be as provided in R.S. 11:102.

B. Credits. The cash balance plan member's account shall be credited with an amount equal to twelve percent of pay monthly. The credits shall include all employee contributions.

C. Interest. (1) For the duration of service covered by the cash balance plan, interest shall be payable on the member's account each plan year at a rate equal to the system's actuarial rate of return as certified by the system actuary in the system's actuarial valuation, less one percent. Interest shall be credited after the Public Retirement Systems' Actuarial Committee adopts the system's valuation containing the actuarial rate of return on investments, and shall be based on the balance of the account at the end of each month for the prior plan year.

(2) No interest shall be credited after the member separates from service covered by the cash balance plan of his retirement system, except that interest shall be credited for those months during the plan year prior to his separation from service.

(3) In no case shall the balance in the employee's account be debited for investment losses.

D. Withdrawal from the cash balance plan. A cash balance plan member who separates from employment covered by his retirement system may withdraw from the cash balance plan.

(1) Upon application for withdrawal, an employee who has been a cash balance plan member for less than five years shall receive a refund of employee contributions without interest. The system shall retain all interest and any employer contributions.

(2) Upon application for withdrawal, an employee who has been a cash balance plan member for five years or longer may receive a lump-sum payment of his account balance or the distribution of his total account balance in the form of a trustee-to-trustee, single-sum transfer between qualified plans or as a payment made directly to a conduit individual retirement account. The employee may opt to leave his account balance with the system and draw an annuity pursuant to R.S. 11:1399.4 when he attains age sixty.

(3)(a) A cash balance plan member shall be eligible to utilize the years of his membership in the cash balance plan for purposes of reciprocal recognition of credited service pursuant to R.S. 11:142.

(b) A cash balance plan member who elects to withdraw from the cash balance plan after becoming a member of a cash balance plan in another Louisiana public retirement system may execute the withdrawal provided for in this Subsection to transfer the amount the member is entitled to receive pursuant to Paragraphs (1) or (2) of this Subsection to a cash balance plan in another retirement system.

(4) If a cash balance plan member dies without withdrawing from the cash balance plan pursuant to this Subsection or annuitizing his benefit pursuant to R.S. 11:1399.4, the following shall apply:

(a) The applicable Tier 1 plan shall be the plan in which the member would have been enrolled in the absence of the cash balance plan. For purposes of this Paragraph, the member's service credit, accrual rate, eligibility, and benefit calculation shall be determined as if the member's cash balance service had been earned as a member of the applicable Tier 1 plan.

(b) If the cash balance plan member is survived by a spouse only and the cash balance plan member met the eligibility requirements for survivors' benefits in the applicable Tier 1 plan, the spouse may choose one of the following options:

(i) To receive the account balance in the cash balance plan as a lump-sum payment; a trustee-to-trustee, single-sum transfer between qualified plans; or a payment made directly to a conduit individual retirement account.

(ii) To receive the applicable Tier 1 survivors' benefit.

(c) If the cash balance plan member is survived by a minor or by a handicapped or mentally disabled child of any age and the cash balance plan member met the eligibility requirements for survivors' benefits in the applicable Tier 1 plan, all survivors otherwise qualifying under the Tier 1 plan shall receive the Tier 1 survivors' benefits but shall not receive the cash balance account balance.

(d) If the cash balance plan member has not met the eligibility requirements for survivors' benefits in the applicable Tier 1 plan, the system shall give his designated beneficiary or his estate the option to receive his account balance as a lump-sum payment; a trustee-to-trustee, single-sum transfer between qualified plans; or a payment made directly to a conduit individual retirement account.

(e) Subject to the provisions of R.S. 11:1399.7, if a survivor is eligible to and elects to receive a Tier 1 survivors' benefit, the account balance in the cash balance plan shall be retained by the retirement system.

(5) If a cash balance plan member becomes disabled before withdrawing from the cash balance plan pursuant to this Subsection or annuitizing his benefit pursuant to R.S. 11:1399.4, the following shall apply:

(a) The applicable Tier 1 plan is the plan in which the member would have been enrolled in the absence of the cash balance plan. For purposes of this Paragraph, the member's service credit, accrual rate, eligibility, and benefit calculation shall be determined as if the member's cash balance service had been earned as a member of the applicable Tier 1 plan.

(b) The member may choose one of the following options:

(i) To receive his cash balance account balance as a lump-sum payment; a trustee-to-trustee, single-sum transfer between qualified plans; or a payment made directly to a conduit individual retirement account.

(ii) To receive the applicable Tier 1 disability benefit if the member otherwise meets the eligibility requirements for disability benefits in Tier 1.

(c) Subject to the provisions of R.S.11:1399.7, if a cash balance plan member is eligible to and elects to receive a Tier 1 disability benefit, the account balance in the cash balance plan shall be retained by the retirement system.

Acts 2012, No. 483, §1, eff. June 30, 2012.