SLS 10RS-118 ENGROSSED Page 1 of 5 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. 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 SLS 10RS-118 ENGROSSED Page 2 of 5 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. 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 SLS 10RS-118 ENGROSSED Page 3 of 5 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. 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 SLS 10RS-118 ENGROSSED Page 4 of 5 Coding: Words which are struck through are deletions from existing law; words in boldface type and underscored are additions. The original instrument and the following digest, which constitutes no part of the legislative instrument, were prepared by Lauren Bailey. DIGEST B. Gautreaux (SB 58) 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 SLS 10RS-118 ENGROSSED Page 5 of 5 Coding: Words which are struck through are deletions from existing law; 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))