2023 Louisiana Laws › Revised Statutes › Title 11 - Consolidated Public Retirement › §11:1938. Deferred Retirement Option Plan

RS 11:1938 - Deferred Retirement Option Plan
A. In lieu of terminating employment and accepting a service retirement allowance pursuant to R.S. 11:1941 and 1942, 1961 and 1962, or 1971 and 1972, any member who is eligible for a normal retirement allowance pursuant to R.S. 11:1941, 1961, or 1971 may elect to participate in the Deferred Retirement Option Plan and defer the receipt of benefits in accordance with the provisions of this Section.
B.(1) For purposes of this Section, except as provided in Paragraph (2) of this Subsection, creditable service shall not include service credit reciprocally recognized under R.S. 11:142.
(2) Any member whose service in this system when combined with service in any other state or statewide public retirement system exceeds thirty years shall be eligible to include reciprocally recognized service credit for purposes of this Section.
C. The default duration of participation in the plan shall be for three years. A participant can terminate participation in the plan prior to the end of the three-year period with written notice to the system if the participant terminates his employment.
D. A person may participate in the plan only once.
E. Upon the effective date of the commencement of participation in the plan, inactive membership in the system shall commence. Employer contributions shall continue to be payable by the employer during the person's participation in the plan, but payment of employee contributions shall cease upon the effective date of the person's commencement of participation in the plan. For purposes of this Section, compensation and creditable service shall remain as they existed on the effective date of commencement of participation in the plan. The monthly retirement benefits that would have been payable, had the person elected to cease employment and receive a service retirement allowance, shall be paid into the Deferred Retirement Option Plan Fund. No change in the optional retirement allowance or change in beneficiary which was originally selected may be made after the effective date of commencement of participation in the plan.
F.(1) A person who participates in this plan shall not be eligible to receive a cost-of-living increase while participating, and shall not be eligible for a cost-of-living increase until his employment which made him eligible to become a member of the system has been terminated for at least one full year.
(2)(a) After a person terminates participation in this program, but provided that he has not terminated his employment which made him eligible to become a member of this system, all amounts which remain credited to the individual's subaccount after termination of participation in the plan shall be placed in liquid asset money market investments at the discretion of the board of trustees.
(b) The contributing period shall mean that time period when funds are being credited to the participant's subaccount which is maintained by the system.
(c) After the contributing period ends, the balance of the subaccount shall be credited annually with interest using the preceding twelve-month average of interest paid by the custodial bank's prime money market institutional shares fund.
G. The Deferred Retirement Option Plan Fund shall not be subject to any fees, charges, or other similar expenses of any kind for any purpose.
H. Upon termination of employment at the end of the specified period of participation, a participant in the plan shall receive, at his option, a lump sum payment from the Deferred Retirement Option Plan Fund equal to the payments made to that fund on his behalf, a true annuity based upon his account in that fund, or any other method of payment approved by the board of trustees. If a person elects to receive a true annuity or other method of payment approved by the board of trustees, funds shall be transferred from the Deferred Retirement Option Plan Fund to the Annuity Reserve Fund to provide for the annuity payments. The monthly benefits that were being paid into the Deferred Retirement Option Plan Fund shall begin to be paid to the retiree and he may not change the optional retirement allowance or beneficiary as originally selected.
I. If a participant dies during the period of participation in the plan, a lump sum equal to his account balance in the plan fund shall be paid to his named beneficiary or, if none, to his estate. If a participant terminates employment prior to the end of the specified period of participation, he shall receive a lump sum payment from the plan fund equal to his account in that fund, a true annuity based upon his account in that fund, or any other method of payment approved by the board of trustees and the monthly benefits that were being paid into the plan fund shall begin to be paid to the retiree. If a person elects to receive a true annuity or other method of payment approved by the board of trustees, funds shall be transferred from the plan fund to the Annuity Reserve Fund to provide for the annuity payments.
J.(1) If employment is not terminated at the end of the period specified for participation in the plan, payments into the plan fund shall cease and the person shall resume active contributing membership in the system. Interest shall accrue on the individual's account balance in the Deferred Retirement Option Plan Fund as specified in Paragraph (F)(2) of this Section.
(2) Payments from the plan fund shall not be made until employment is terminated, nor shall the monthly benefits which were being paid into the plan fund during the period of participation be payable to the person until he terminates employment.
(3) Upon termination of employment, the person shall receive a lump sum payment from the plan fund equal to his account in that fund, a true annuity based upon his account in that fund, or any other method of payment approved by the board of trustees. If a person elects to receive a true annuity or other method of payment approved by the board of trustees, funds shall be transferred from the plan fund to the Annuity Reserve Fund to provide for the annuity payments.
(4)(a) Also upon termination of employment, the monthly benefits which were being paid into the plan fund shall begin to be paid to the retiree and he shall receive an additional benefit based on his additional service rendered since termination of participation in the fund, using the normal method of computation of benefit, subject to the following:
(i) For any member hired on or before December 31, 2006:
(aa) If his period of additional service is less than thirty-six months, the final compensation figure used to calculate the additional benefit shall be that used to calculate his original benefit.
(bb) If his period of additional service is thirty-six months or more, the final compensation figure used to calculate the additional benefit shall be based on his compensation during the period of additional service.
(ii)(aa) For any member hired on or after January 1, 2007, whose period of additional service is less than sixty months, the final compensation figure used to calculate the additional benefit shall be that used to calculate his original benefit.
(bb) For any member hired on or after January 1, 2007, whose period of additional service is sixty months or more, the final compensation figure used to calculate the additional benefit shall be based on his compensation during the period of additional service.
(b) In no event shall the additional benefit exceed an amount which, when combined with the original benefit, equals one hundred percent of the final compensation figure used to compute the additional benefit.
(c) If a person dies or acquires a disability during the period of additional service, he shall be considered as having retired on the date of death or commencement of disability.
K. If the participant does not terminate employment at the end of the period specified for participation in the plan, he may select another optional retirement allowance and beneficiary, but only for the supplemental benefit based on any additional period of service rendered after termination under the plan.
L. A member who terminates employment and receives a lump sum or annuity distribution from the applicable Deferred Retirement Option Plan Fund and who subsequently returns to covered employment within a period less than the length of time that the member participated in the plan shall repay all funds withdrawn from the applicable fund, together with interest thereon from date of withdrawal to date of repayment at the valuation interest rate.
Acts 1990, No. 338, §2; Redesignated from R.S. 33:6134 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1991, No. 674, §1, eff. July 18, 1991; Acts 1995, No. 1035, §2, eff. June 29, 1995; Acts 1997, No. 867, §1, eff. July 1, 1997; Acts 1997, No. 876, §1; Acts 1997, No. 1266, §1, eff. July 1, 1998; Acts 2001, No. 695, §1, eff. Jan. 1, 2002; Acts 2003, No. 962, §1, eff. Jan. 1, 2004; Acts 2004, No. 631, §1, eff. July 5, 2004; Acts 2006, No. 584, §1, eff. July 1, 2006; Acts 2014, No. 811, §4, eff. June 23, 2014; Acts 2016, No. 424, §1, eff. June 9, 2016.
NOTE: See Acts 2006, No. 584, §3, relative to Act superseding conflicting provisions of Acts of 2006 R.S.
NOTE: Acts 2014, No. 811 changed terminology referring to persons with disabilities throughout the La. Revised Statutes and codes of law, and included a listing of terms that were deleted and their respective successor terms (See Acts 2014, No. 811, §36). The Act provides that it is not the intent of the legislature that changes in terminology effected therein alter or affect in any way the substance, interpretation, or application of any law or administrative rule; further provides that nothing in the Act shall be construed to expand or diminish any right of or benefit for any person provided by any law or administrative rule (See Acts 2014, No. 811, §35(C) and (D)).