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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. 602
BY SENATOR B. GAUTREAUX
RETIREMENT SYSTEMS. Relative to Louisiana State Employees' Retirement System,
Teachers' Retirement System of Louisiana, and Louisiana School Employees' Retirement
System, places restrictions on participation in the Deferred Retirement Option Plan. (7/1/10)
AN ACT1
To amend and reenact R.S. 11:447(A), 786(A), and 1152(A), relative to state retirement2
systems; to restrict participation in the Deferred Retirement Option Plan; to provide3
for an effective date; and to provide for related matters.4
Notice of intention to introduce this Act has been published.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 11:447(A), 786(A), and 1152(A) are hereby amended and reenacted7
to read as follows: 8
§447. Deferred Retirement Option Plan9
A. In lieu of terminating employment and accepting a retirement allowance,10
any member of this system who is eligible for regular retirement may elect to11
participate in the Deferred Retirement Option Plan subject to the provisions of R.S.12
11:447 through 454, except that no member who has less than ten years of13
creditable service in the system on July 1, 2010, shall be permitted to participate14
in the Deferred Retirement Option Plan.15
* * *16
§786. Deferred Retirement Option Plan17 SB NO. 602
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words in boldface type and underscored are additions.
A. In lieu of terminating employment and accepting a retirement allowance,1
any member of this system who is not covered by R.S. 11:801 who has thirty years2
of service credit at any age, twenty-five years of service credit and is at least age3
fifty-five, or has twenty years of service credit exclusive of military service and is4
at least age sixty-five may elect to participate in the Deferred Retirement Option5
Plan. A member with ten years of service credit exclusive of military service and6
who is at least age sixty may elect to participate in the plan, but all benefits payable7
at any time shall only be calculated using a two percent benefit formula. Any8
member of this system who is covered by the provisions of R.S. 11:801 who has9
thirty years of service credit and is at least age fifty-five or has ten years of service10
credit and is at least age sixty may elect to participate in the Deferred Retirement11
Option Plan. Notwithstanding any provision of law to the contrary, no member12
who has less than ten years of creditable service in the system on July 1, 2010,13
shall be permitted to participate in the Deferred Retirement Option Plan.14
* * *15
§1152. Deferred Retirement Option Plan16
A. In lieu of terminating employment and accepting a service retirement17
allowance pursuant to this Part, any member who has ten or more years of creditable18
service at sixty years of age, twenty-five or more years of creditable service at fifty-19
five years of age, or thirty or more years of creditable service at any age may elect20
to participate in the Deferred Retirement Option Plan and defer the receipt of21
benefits in accordance with the provisions of this Section, except that no member22
who has less than ten years of creditable service credit in the system on July 1,23
2010, shall be permitted to participate in the Deferred Retirement Option Plan.24
* * *25
Section 2. The cost of this Act, if any, shall be funded with additional employer26
contributions in compliance with Article X, Section 29(E)(5)(b) of the Constitution of27
Louisiana.28
Section 3. This Act shall become effective on July 1, 2010; if vetoed by the governor29 SB NO. 602
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and subsequently approved by the legislature, this Act shall become effective on July 1,1
2010, or on the day following such approval by the legislature, whichever is later.2
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren B. Bailey.
DIGEST
Present law provides for various options for payment of retirement benefits among which
a member of the Louisiana State Employees' Retirement System (LASERS), the Teachers'
Retirement System of Louisiana (TRSL), or the Louisiana School Employees' Retirement
System (LSERS) may choose upon application for retirement.
Present law establishes a Deferred Retirement Option Plan (DROP) for members of each
system. Provides that a member who is eligible for regular retirement may, for a limited
time after first reaching eligibility, elect to participate in DROP in lieu of terminating
employment.
Present law DROP provisions generally provide that a DROP participant "freezes" his
retirement accruals as of the date he enters DROP and has his "base benefit" calculated.
Provides that during participation in DROP, the member continues working and receiving
a salary. Further provides that the "base benefit" shall be deposited in a special subaccount
within the system's trust fund. Provides that upon termination of DROP participation and
employment, the person begins to receive a monthly annuity, and has access to the
accumulated DROP balance.
Present law provides, among the various payment options, for a retiree who has not
participated in DROP to elect to receive an initial lump-sum benefit and an actuarially
reduced monthly annuity.
Proposed law retains present law but provides that no member who has less than ten years
of creditable service on July 1, 2010, in LASERS, TRSL, or LSERS shall be permitted to
participate in DROP.
Proposed law requires that any cost of proposed law be funded with additional employer
contributions in compliance with Art. X, Sec. 29(E)(5)(b) of the state constitution.
Effective July 1, 2010.
(Amends R.S. 11:447(A), 786(A), and 1152(A))