2020 Louisiana Laws
Revised Statutes
Title 11 - Consolidated Public Retirement
§2254. Creditable service

RS 2254 - Creditable service

A. Creditable service at retirement on which the retirement allowance of a member shall be based shall consist of the membership service rendered by him since he last became a member. Additionally, any active contributing member shall be entitled to receive credit for service as an employee, as the term "employee" is defined in this Chapter, for which the member has not received credit, provided that such service credit is purchased, at the option of the member, under the provisions of R.S. 11:158. No credit shall be given unless and until this amount is paid in full.

B. Any member who has terminated membership in the system and withdrawn his contributions and who later becomes a member of this system shall, after eighteen months of additional service and membership, be eligible to obtain credit for his previous service in the system, provided that he pays back into the system the amount of contributions which was refunded to him plus interest at the system's then currently assumed actuarial valuation rate of interest, compounded annually, from date of refund until date paid.

C. Any member terminated by his employer, which termination has subsequently been declared to have been wrongful, who has withdrawn his contributions during this period of wrongful termination, may repay the refunded contributions without the payment of interest on the refunded amount within thirty days of the exhaustion of all legal remedies or legal delays for appealing decisions regarding such wrongful termination, or within thirty days after reinstatement in his position of employment, whichever is longer. If the repayment of refunded contributions does not take place within this thirty-day period, the member shall repay the amount of the refunded contributions in accordance with the provisions of R.S. 11:144.

D. The system shall permit direct rollovers from other qualified retirement plans. Amounts so rolled over may be used to purchase service credits at the accrual rate established by the system actuary using actuarial assumptions consistently applied, subject to the limitations of Section 415(n) of the Internal Revenue Code of 1986, as amended. Any such service credit may be purchased only if authorized by statutory authority, other than this Subsection, specifically identifying the type of credit authorized to be purchased. Amounts may not be rolled over which are in excess of the amounts which may be used to purchase creditable service under Section 415(n). No member shall receive a benefit for purchased creditable service if to do so would cause the member to receive a retirement benefit for the same service under more than one retirement plan.

E.(1) Notwithstanding any other provision of law to the contrary that would otherwise limit a distributee's election under this Subsection, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(2) If a mandatory distribution greater than one thousand dollars is made on or after March 28, 2005, and the distributee does not elect to have such distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover or to receive the distribution directly, then the plan administrator shall pay the distribution in a direct rollover to an individual retirement plan designated by the plan administrator. For purposes of determining whether a mandatory distribution is greater than one thousand dollars, the portion of the distributee's distribution attributable to any rollover contribution is included.

F. For purposes of this Section, the following words and phrases shall have the following meanings:

(1) "Direct rollovers" shall mean trustee-to-trustee transfers of sums from other qualified plans which are permitted to roll over sums to other qualified plans under the provisions of the Internal Revenue Code of 1986, as amended.

(2)(a) "Distributee" shall mean:

(i) A member or former member.

(ii) A member's or former member's surviving spouse, or a member's or former member's spouse or former spouse who is the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Internal Revenue Code are distributees with regard to the interest of the spouse or former spouse.

(iii) For distributions occurring in plan years beginning after December 31, 2009, the member's or former member's nonspouse designated beneficiary if the direct rollover is made only to a traditional individual retirement account or a Roth IRA that is established on behalf of the designated beneficiary and is treated as an inherited individual retirement account pursuant to the provisions of Section 402(c)(11) of the Internal Revenue Code. In this case, the determination of any required minimum distribution under Section 401(a)(9) of the Internal Revenue Code that is ineligible for rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 Internal Revenue Bulletin 395.

(3) "Eligible retirement plan" shall mean:

(a) An eligible plan described in Section 457(b) of the Internal Revenue Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this system.

(b) A traditional individual retirement account.

(c) An annuity plan described in Section 403(b) of the Internal Revenue Code.

(d) A qualified defined benefit or defined contribution plan described in Section 401(a) of the Internal Revenue Code that accepts the distributee's eligible rollover distribution.

(e) A distribution to a surviving spouse or to a spouse or former spouse who is the alternative payee under a qualified domestic relations order as defined in Section 414(p) of the Internal Revenue Code.

(4)(a) "Eligible rollover distribution" shall mean any distribution of all or any portion of the balance to the credit of the distributee. An eligible rollover distribution shall not include:

(i) Any distribution that is one of a series of substantially equal periodic payments, not less frequently than annually, made for the life or life expectancy of the distributee, or the joint lives or joint life expectancies of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more.

(ii) Any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code.

(iii) The portion of any distribution that is not includible in gross income, determined without regard to the exclusion for net unrealized appreciation with respect to employer securities.

(iv) Any other distribution that is reasonably expected to total less than two hundred dollars during a year.

(b) A portion of the distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. Such portion may be transferred only to one of the following:

(i) A traditional individual retirement account or annuity described in Section 408(a) or (b) of the Internal Revenue Code or a Roth IRA or annuity described in Section 408A of the Internal Revenue Code.

(ii) A qualified defined contribution, defined benefit, or annuity plan described in Section 401(a) or 403(b) of the Internal Revenue Code, or to an annuity contract described in Section 403(b) of the Internal Revenue Code, if such plan or contract provides for separate accounting for amounts so transferred, including interest thereon, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

G. The qualified military service of a member who has been reemployed in accordance with 26 U.S.C. 414(u) shall be treated for vesting and benefit accrual purposes as service completed under Subsection A of this Section if the member timely remits to the system any employee contributions which would have been required but for the member's leave of absence to perform qualified military service in accordance with the terms of federal law.

Added by Acts 1979, No. 434, §1. Amended by Acts 1980, No. 178, §1; Redesignated from R.S. 33:2154 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1993, No. 324, §1; Acts 1993, No. 756, §1; Acts 2006, No. 492, §1, eff. July 1, 2006; Acts 2006, No. 507, §1, eff. June 22, 2006; Acts 2012, No. 480, §1, eff. July 1, 2012; Acts 2018, No. 109, §1.