2023 Louisiana Laws › Revised Statutes › Title 11 - Consolidated Public Retirement › §11:1530. Deferred Retirement Option Plan

RS 11:1530 - Deferred Retirement Option Plan
A.(1) The system shall establish a Deferred Retirement Option Plan Account which shall be a part of the system fund.
(2) The system shall maintain subaccounts within this account reflecting the credits attributed to each participant in the plan, but the monies in the account shall remain a part of the fund until disbursed to a participant in accordance with the plan provisions.
(3) In lieu of terminating employment and accepting a regular retirement allowance pursuant to R.S. 11:1521, any member who is eligible for a service retirement allowance under R.S. 11:1521 may elect to participate in the Deferred Retirement Option Plan and defer the receipt of benefits under the provisions of this Section.
B. For purposes of this Section, credited service shall not include service credit reciprocally recognized under R.S. 11:142.
C. The duration of participation in the plan shall be specified and shall not exceed three years.
D. A person may participate in the plan only once. At the time the member elects to participate in the plan, the member may select a retirement option for normal retirement under the provisions of R.S. 11:1524. No change in the option selected shall be permitted after it has been filed with the board.
E. Upon the effective date of commencement of participation in the plan, active membership and participation in the regular retirement plan of the system shall terminate, and inactive membership and participation in the Deferred Retirement Option Plan shall commence. Employer contributions shall continue to be payable by the employer during the person's membership and participation in the plan, but payment of employee contributions shall terminate 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 terminate employment and receive a service retirement allowance shall be paid into the Deferred Retirement Option Plan Fund.
F. Except as otherwise provided in this Subsection, a person's account in the plan fund shall not earn interest. 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 be a member of the system has been terminated for at least one full calendar year. With respect to any individual who was eligible to participate in the Deferred Retirement Option Plan prior to January 1, 2004, if employment is not terminated at the end of the period specified for participation in the plan, the person's account shall, for so long as the person remains in such continuous employment, earn interest at the actual rate of return earned on the account as certified by the custodian of such assets. The funds in all such accounts shall be invested as directed by the board. With respect to any individual who becomes eligible to participate in the Deferred Retirement Option Plan on or after January 1, 2004, 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. Such accounts may be credited with interest at the actual rate of return earned on such account investments less one-fourth of one percent per annum; or at the option of the system, the funds may be credited to subaccounts as herein established:
(1) The contributing period shall mean that time period when funds are being credited to the participant's subaccount which is maintained by the system.
(2) After the contributing period ends, the balance of the subaccount then may be transferred to a self-directed subaccount, which shall be known as the investment period.* Both subaccounts shall be within the Deferred Retirement Option Plan established herein. Management of the funds shall be by the system during the contributing period. When the funds are transferred to the self-directed subaccount for the investment period, the system is authorized to hire a third party provider. The third party provider shall act as an agent of the system for purposes of investing balances in the self-directed subaccounts of the participant as directed by the participant. The participant shall be given such options that comply with federal law for self-directed plans.
(3) The participant in the self-directed portion of this plan agrees that the benefits payable to the participant are not the obligations of the state or the system, and that any returns and other rights of the plan are the sole liability and responsibility of the participant and the designated provider to which contributions have been made. Furthermore, each participant, in accordance with this provision, shall expressly waive his rights as set forth in Article X, Section 29(A) and (B) of the Louisiana Constitution as it relates to his subaccount in the self-directed portion of the plan. By participating in the self-directed portion of the plan, the participant agrees that he and the provider shall be responsible for complying with all applicable provisions of the Internal Revenue Code. The participant also agrees that if any violation of the Internal Revenue Code occurs as a result of the participant's participation in the self-directed portion of the plan, it shall be the sole responsibility and liability of the participant and the provider, not the state or the system. There shall be no liability on the part of and no cause of action of any nature shall arise against the state, the system, or its agents or employees, for any action taken by the participant for choices the participant makes in relationship to the funds in which he chooses to place his subaccount balance.
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 partial lump sum payment and a true life annuity based upon the remaining balance in his account in that fund, or a true life annuity based upon his account in that fund; however, if a true life annuity is elected, the terms of the annuity shall be approved by the board of trustees. The monthly benefits payment that was being paid into the Deferred Retirement Option Plan Fund shall begin to be paid to the retiree.
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, at his option, a lump sum payment from the Deferred Retirement Option Plan equal to the payments made to that fund on his behalf, a partial lump sum payment and a true life annuity based upon the remaining balance in his account in that fund, or a true life annuity based upon his account in that fund; however, if a true life annuity is elected, the terms of the annuity shall be approved by the board of trustees. The monthly benefit payments that were being paid into the Deferred Retirement Option Plan Fund shall begin to be paid to the retiree.
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.
(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.
K.(1) Upon termination of employment, the person 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 partial lump sum payment and a true life annuity based upon the remaining balance in his account in that fund, or a true life annuity based upon his account in that fund; however, if a true life annuity is elected, the terms of the annuity shall be approved by the board of trustees.
(2) Upon termination of employment, and in addition to the payment provided for in Paragraph (1) of this Subsection, the monthly benefit payments that were being paid into the Deferred Retirement Option 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 benefits, subject to the following:
(a) If his period of additional service is less than sixty months, the monthly average final compensation figure used to calculate the additional benefit shall be computed as his total salary during the period of additional service divided by the number of months of such service, or that used to calculate his original benefit, whichever is less.
(b) If his period of additional service is sixty months or more, the monthly average final compensation figure used to calculate the additional benefit shall be based on his compensation during the period of additional service.
(c) In no event shall the additional benefit exceed an amount which, when combined with the original service retirement benefit, equals one hundred percent of the monthly average final compensation figure used to compute the additional benefit.
(3) 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.
Acts 1999, No. 33, §1, eff. July 1, 1999; Acts 2003, No. 962, §1, eff. Jan. 1, 2004; Acts 2008, No. 853, §1, eff. July 1, 2008; Acts 2010, No. 101, §1, eff. Jan. 1, 2011; Acts 2010, No. 273, §1, eff. Jan. 1, 2011; Acts 2014, No. 811, §4, eff. June 23, 2014.
*As appears in enrolled bill.
NOTE: For transitional provisions relative to R.S. 11:1530(K)(2)(a) and (b), see Acts 2010, No. 273, §3(A) and (C).
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)).