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Regular Session, 2010
SENATE BILL NO. 58
BY SENATOR B. GAUTREAUX
RETIREMENT CREDIT. Allows members of the Louisiana State Employees' Retirement
System to purchase service credit for purposes of retirement eligibility. (7/1/10)
AN ACT1
To amend and reenact R.S. 11:429(B), relative to the purchase of service credit in the2
Louisiana State Employees' Retirement System; to provide for the purchase of3
service credit and the use of such credit for the purposes of attaining eligibility for4
retirement subject to certain limitations; to provide for an effective date; and to5
provide for related matters.6
Notice of intention to introduce this Act has been published.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 11:429(B) is hereby amended and reenacted to read as follows: 9
ยง429. Purchase of service credit10
* * *11
B.(1) Notwithstanding any other provision of law to the contrary, any12
member of the system who has credit in the system for at least five years of service13
shall be eligible to obtain credit for up to five years of service credit in one-year14
increments provided that he shall apply to the system for such credit and pay to the15
system the greater of the amount calculated in accordance with the actuarial cost16
provisions of R.S. 11:158 or the employee and employer contributions plus interest17 SB NO. 58
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based on the member's current salary, which totally offsets the increase in accrued1
liability of the system resulting from the receipt of the credit by the member. The2
amount to be paid shall be paid in one lump sum, and no service credit shall be given3
to the member until or unless the amount is paid in full. Any credit purchased4
pursuant to this Subsection Paragraph shall be used for calculation of benefits only5
and shall not be used for purposes of attaining eligibility for retirement except as6
otherwise authorized in this Subsection.7
(2) Notwithstanding any other provision of law to the contrary, any8
member of the system who has credit in the system for at least five years of9
service and has attained the age at which the member would be eligible to retire10
but who lacks five years or less of service credit to become eligible to retire shall11
be eligible to obtain credit for purposes of attaining eligibility for retirement12
and calculation of benefits for up to five years of service credit in one-year13
increments provided that he shall apply to the system for such credit on or14
before August 31, 2010, and pay to the system by December 31, 2010, the15
greater of the amount calculated in accordance with the actuarial cost16
provisions of R.S. 11:158 or the employee and employer contributions plus17
interest based on the member's current salary, which totally offsets the increase18
in accrued liability of the system resulting from the receipt of the credit by the19
member. The amount to be paid shall be paid in one lump sum, and no service20
credit shall be given to the member until or unless the amount is paid in full.21
Any member who avails himself of this option shall file an application for22
retirement pursuant to R.S. 11:442 within thirty days of notification from the23
system that the credit purchase has been completed. If the system does not24
receive the member's application for retirement on or before January 31, 2011,25
the system shall return the member's payment and notify the member that the26
transaction has been canceled. In no case shall the member's retirement occur27
on or after February 1, 2011.28
(3) Notwithstanding any other provision of law to the contrary, any29 SB NO. 58
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member of the system who has purchased service credit under the provisions1
of Paragraph (1) of this Subsection and has attained the age at which the2
member would be eligible to retire but who lacks five years or less of service3
credit to become eligible to retire shall be eligible to upgrade all or a portion of4
his or her prior service credit purchased for calculation of benefits to credit for5
attaining eligibility and benefit calculation in one-year increments provided that6
he shall apply to the system for such credit on or before August 31, 2010, and7
pay to the system by December 31, 2010, the greater of the amount calculated8
in accordance with the actuarial cost provisions of R.S. 11:158 or the employee9
and employer contributions plus interest based on the member's current salary,10
which totally offsets the increase in accrued liability of the system resulting11
from the receipt of the credit by the member. The amount to be paid shall be12
paid in one lump sum, and no service credit shall be given to the member until13
or unless the amount is paid in full. Any member who avails himself of this14
option shall file an application for retirement pursuant to R.S. 11:442 within15
thirty days of notification from the system that the credit purchase has been16
completed. If the system does not receive the member's application for17
retirement on or before January 31, 2011, the system shall return the member's18
payment and notify the member that the transaction has been canceled. In no19
case shall the member's retirement occur on or after February 1, 2011.20
* * *21
Section 2. This Act shall become effective on July 1, 2010; if vetoed by the governor22
and subsequently approved by the legislature, this Act shall become effective on July 1,23
2010, or on the day following such approval by the legislature, whichever is later.24 SB NO. 58
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren Bailey.
DIGEST
Present law (R.S. 11:429(A)) permits any member of the Louisiana State Employees'
Retirement System (LASERS) who has credit in the system for at least one year of service
to purchase up to five years of service credit in one-year increments. Provides that the
member shall apply to the system for such credit on or before June 30, 2005, and pay to the
system by June 30, 2006, the greater of the amount calculated in accordance with the
actuarial cost provisions of present law or the employee and employer contributions plus
interest based on the member's current salary, which totally offsets the increase in accrued
liability of the system resulting from such purchase of service credit. Provides the amount
to be paid shall be paid in one lump sum, and no service credit shall be given to the member
until or unless the amount is paid in full.
Proposed law retains present law.
Present law (R.S. 11:429(B)) permits any member of LASERS who has credit in the system
for at least five years of service to purchase up to five years of service credit in one-year
increments. Provides that the member shall apply to the system for such credit and pay to
the system the greater of the amount calculated in accordance with the actuarial cost
provisions of present law or the employee and employer contributions plus interest based on
the member's current salary, which totally offsets the increase in accrued liability of the
system resulting from such purchase of service credit. Provides the amount to be paid shall
be paid in one lump sum, and no service credit shall be given to the member until or unless
the amount is paid in full. Present law provides that the service credit purchased pursuant
to present law shall be used for calculation of benefits only and shall not be used for
purposes of attaining eligibility for retirement.
New Purchase of eligibility
Proposed law provides that any member of LASERS who has credit in the system for at least
five years of service and has attained the age at which the member would be eligible to retire
but who lacks five years or less of service credit to become eligible to retire shall be eligible
to purchase up to five years of service credit in one-year increments for purposes of attaining
eligibility for retirement and calculation of benefits. Provides that the member shall apply
to the system for such credit on or before August 31, 2010, and pay to the system by
December 31, 2010, the greater of the amount calculated in accordance with the actuarial
cost provisions of present law or the employee and employer contributions plus interest
based on the member's current salary, which totally offsets the increase in accrued liability
of the system resulting from the receipt of the credit by the member. Further provides that
the amount shall be paid in one lump sum, and no service credit shall be given to the
member until or unless the amount is paid in full. Proposed law provides that any member
who avails himself of this option shall file an application for retirement pursuant to present
law within thirty days of notification from the system that the credit purchase has been
completed. Proposed law provides that if the system does not receive the member's
application for retirement on or before January 31, 2011, the system shall return the
member's payment and notify the member that the transaction has been canceled. Proposed
law provides that any member who avails himself of this option shall retire prior to February
1, 2011. SB NO. 58
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words in boldface type and underscored are additions.
Upgrade of previously purchased service credit
Proposed law provides for an upgrade of service credit previously purchased for benefit
calculation only pursuant to present law (R.S. 11:429(B)) to service credit applicable to both
calculation of benefits and retirement eligibility for a member who would otherwise be
allowed to make a first-time purchase pursuant to proposed law.
Effective July 1, 2010.
(Amends R.S. 11:429(B))