Louisiana House Bill HB152

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11

Caption

Relative to the Municipal Police Employees' Retirement System (MPERS), allows certain individuals employed by the city of Hammond to rescind their participation in the Deferred Retirement Option Plan (DROP) subject to certain conditions (OR +$943,000 APV)

Impact

The bill's enactment means that eligible members can unfreeze their level of compensation and creditable service, triggering a recalculation of their retirement benefits. This change targets the provisions around the Municipal Police Employees' Retirement System (MPERS) and is significant for employees who meet the stipulated conditions. As a one-time, irrevocable action, it also carries the implication that participants must forfeit any amounts credited to their DROP account before they can exercise this option. The intended effect is to aid long-term employees reestablishing benefits they might have forfeited through the DROP mechanism.

Summary

House Bill 152 allows certain employees of the city of Hammond who are participants in the Deferred Retirement Option Plan (DROP) to rescind their participation in the program under specific conditions. This legislation was introduced to provide a pathway for those who may have had their retirement options limited by their participation in DROP to re-enter active membership and regain the benefits associated with it. Key qualifications include having at least 20 years of service credit, being at least 53 years old, and having commenced DROP participation on or before January 31, 2006.

Sentiment

The sentiment surrounding HB 152 appears to be generally supportive among those who directly benefit from the changes. Many advocates for municipal employees express positive views regarding increased flexibility in retirement planning and the potential for improved financial security for eligible members. However, there may also be concerns from those worried about the implications of allowing participants to rescind DROP participation, including the potential financial impact on the pension system resources.

Contention

Notable points of contention arise around the eligibility criteria and the requirement for participants to forfeit their DROP account balance. Critics may raise concerns about fairness and the impact on long-term employees who have relied on the stability provided by the DROP structure. Furthermore, questions may be raised about the balance between employee choices and the sustainability of the pension fund if multiple participants decide to rescind DROP participation under the provisions outlined in the bill.