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Regular Session, 2011
HOUSE BILL NO. 481
BY REPRESENTATIVE BARRAS
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT/ASSESSORS: Relative to the La. Assessors' Retirement Fund, provides for
compliance with applicable federal tax qualification requirements
AN ACT1
To amend and reenact R.S. 11:1402(6)(c) and (8), 1404(A), 1411(D), 1444(C) and (D),2
1451, 1457(C), 1458(B)(1), (2)(a), (b), and (d), (3)(caption), and (4) and (E)(2) and3
(5)(c), to enact R.S. 11:1402(6)(d), 1444(E)(3), 1445(G), 1455(C), and 1458(A)(3),4
and to repeal R.S. 11:1404(E), 1457(B), 1458(B)(2)(c) and (E)(5)(d) and (e),5
relative to the Louisiana Assessors' Retirement Fund; to provide relative to6
compliance with applicable federal tax qualification requirements; to provide for an7
effective date; and to provide for related matters.8
Notice of intention to introduce this Act has been published9
as provided by Article X, Section 29(C) of the Constitution10
of Louisiana.11
Be it enacted by the Legislature of Louisiana:12
Section 1. R.S. 11:1402(6)(c) and (8), 1404(A), 1411(D), 1444(C) and (D), 1451,13
1457(C), 1458(B)(1), (2)(a), (b), and (d), (3)(caption), and (4) and (E)(2) and (5)(c) are14
hereby amended and reenacted and R.S. 11:1402(6)(d), 1444(E)(3), 1445(G), 1455(C), and15
1458(A)(3) are hereby enacted to read as follows:16
§1402. Definitions17
As used in this Chapter, the following words and phrases shall have the18
meanings ascribed to them unless the context clearly indicates otherwise:19
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(6)1
* * *2
(c) Compensation of a member in excess of one hundred fifty thousand3
dollars, as adjusted for increases in the cost of living under Section 401(a)(17)(B) of4
the Internal Revenue Code shall not be taken into account for years beginning on or5
after January 1, 1994, and ending before January 1, 2002. Compensation of a6
member in excess of two hundred thousand dollars as adjusted for increases in the7
cost of living under Section 401(a)(17)(B) of the Internal Revenue Code shall not be8
taken into account for years beginning on or after January 1, 2002. However, in9
determining monthly average final compensation for a member retiring on or after10
January 1, 2002, compensation which is permitted to be taken into account on or11
after January 1, 2002, but which occurred in a prior year that was included in the12
averaging period shall be taken into account. This limitation may be adjusted from13
time to time by rules promulgated by the board in accordance with the provisions of14
the Administrative Procedure Act, R.S. 49:950 et seq.15
(d) For purposes of compliance with federal tax-qualification requirements,16
the board may promulgate rules further defining "compensation" and "Section 41517
compensation", in accordance with the provisions of the Administrative Procedure18
Act.19
* * *20
(8) "Actuarial equivalent" means a benefit of equivalent value to the21
accumulated contributions, annuity or benefits and regular interest, as the case may22
be, computed on the basis of such mortality and interest tables as shall be adopted23
by the board of trustees in accordance with the provisions of R.S. 11:1404. In the24
absence of resolution by the board, the following assumptions shall be used:25
(a) Interest shall be compounded annually at a rate of seven and one-half26
percent per annum.27
(b) Annuity rates shall be determined on the basis of one hundred ten percent28
of the 1971 Group Annuity Unisex Mortality Tables the mortality tables utilized for29 HLS 11RS-800 ORIGINAL
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the latest system valuation approved by the Public Retirement Systems' Actuarial1
Committee.2
* * *3
§1404. Amendment of provisions of retirement system4
A. The provisions of the retirement system established by R.S. 11:1401 may5
be amended by action of the legislature in the same manner as any other statute may6
be amended by the legislature. In addition, action of the board with respect to the7
payment of cost-of-living adjustments, with respect to the payment of employee8
contributions, with respect to actuarial assumptions, as provided in R.S. 11:1402,9
changes required for conformity with requirements of the Internal Revenue Code,10
and any other changes deemed by the board to be necessary and appropriate for the11
functioning of the fund shall be considered amendments to the provisions of the12
retirement fund.13
* * *14
§1411. Creditable service15
* * *16
D. If a member takes a leave of absence governed by the Uniformed Services17
Employment and Reemployment Rights Act (USERRA), then upon his return to18
employment covered by the fund, the member shall share in employer contributions19
in the same manner as other members and shall not be considered to have terminated20
employment or to have incurred a break in service during such leave of absence. The21
employer shall be permitted to make an employer contribution in satisfaction of the22
affected employee's rights under USERRA. A member who does not return to23
employment shall not be affected by this provision. The board shall promulgate24
rules pursuant to the Administrative Procedure Act, which shall be part of the25
governing provisions of the fund, to implement the requirements of USERRA.26
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§1444. Limitation on payment of benefits1
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C. If a survivor benefit is payable to a specified person or persons or if a3
benefit is payable at death under an option elected pursuant to R.S. 11:1932 1423,4
the member shall be considered to have designated such person as a designated5
beneficiary hereunder. If there is more than one such person, then the oldest such6
person shall be considered to have been so designated, or, if none, then the oldest7
person entitled to receive a survivor benefit shall be considered to have been so8
designated. The designation of a designated beneficiary hereunder shall not prevent9
payment to multiple beneficiaries but shall only establish the permitted period of10
payments.11
D. Distributions from the system shall be made in accordance with the12
requirements set forth in Section 401(a)(9) of the Internal Revenue Code, including13
the minimum distribution incidental benefit rules applicable thereunder. The board14
may promulgate rules in accordance with the provisions of the Administrative15
Procedure Act, R.S. 49:950 et seq., to carry out the requirements of this Subsection,16
and the board may adopt provisions that amend the other provisions of this Section.17
E.18
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(3) The board may promulgate rules in accordance with the Administrative20
Procedure Act, R.S. 49:950 et seq., regarding any change in the required beginning21
date necessary for compliance with federal tax-qualification requirements.22
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§1445. Guaranteed return of accumulated contributions24
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G. The board may promulgate rules in accordance with the provisions of the26
Administrative Procedure Act, R.S. 49:950 et seq., that specify the manner of27
distributions and the direct rollover of such distributions.28
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§1451. Conditions for payment of benefit1
No regular, disability, survivor, or other benefit from the fund, including a2
refund of accumulated employee contributions and any optional benefit, shall be3
payable until and unless a written application therefor is filed with the board4
providing such information and in such form as the board may require and until and5
unless all contributions by or for the member or former member have been received6
by the board and until and unless the member or former member has terminated7
service. This Section shall not preclude the payment of benefits consistent with R.S.8
11:1444 and any rules promulgated by the board thereunder.9
* * *10
§1455. Withdrawal of accumulated employee contributions; repayment11
* * *12
C. The board may promulgate rules in accordance with the provisions of the13
Administrative Procedure Act, R.S. 49:950 et seq., that permit the repayment from14
funds held for the member's benefit in another retirement plan or individual15
retirement account or annuity.16
* * *17
§1457. Qualified plan; direct rollover; eligible retirement plan; election18
* * *19
C. As used in this Section, the following terms shall mean the following:20
(1) "Direct rollover" means a payment by the plan to the eligible retirement21
plan specified by the distributee.22
(2) "Distributee" means a member or former member. In addition, the23
member's or former member's surviving spouse, or the member's spouse or former24
member's spouse with whom a benefit or return of employee contributions is to be25
divided pursuant to R.S. 11:291(B) are distributees with reference to an interest of26
the member or former spouse. The board may promulgate rules in accordance with27
the Administrative Procedure Act, R.S. 49:950 et seq., that change this definition in28 HLS 11RS-800 ORIGINAL
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order to conform to the provisions of the Internal Revenue Code and regulations1
thereunder.2
(3) "Eligible retirement plan" means an individual retirement account3
described in Section 408(a) of the Internal Revenue Code, an individual retirement4
annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan5
described in Section 403(a) of the Code, or a qualified trust described in Section6
401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover7
distribution. However, in the case of an eligible rollover distribution to the surviving8
spouse, an eligible retirement plan is an individual retirement account or individual9
retirement annuity. "Eligible retirement plan" shall also mean an annuity contract10
described in Section 403(b) of the Internal Revenue Code and an eligible plan under11
Section 457(b) of the Internal Revenue Code which is maintained by a state, a12
political subdivision of a state, or any agency or instrumentality of a state or political13
subdivision of a state agreeing to account separately for amounts transferred into14
such plan from this fund. A distribution to a surviving spouse or to a spouse or15
former spouse who is the alternate payee under a qualified domestic relations order16
shall not make the retirement plan ineligible. The board may promulgate rules in17
accordance with the Administrative Procedure Act, R.S. 49:950 et seq., that change18
this definition in order to conform to provisions of the Internal Revenue Code and19
regulations thereunder.20
(4) "Eligible rollover distribution" means any distribution of all or any21
portion of the balance to the credit of the distributee, except that an eligible rollover22
distribution does not include: any distribution that is one of a series of substantially23
equal periodic payments, not less frequently than annually, made for the life or life24
expectancy of the distributee or the joint lives or joint life expectancies of the25
distributee and the distributee's designated beneficiary, or for a specified period of26
ten years or more; any distribution to the extent such distribution is required under27
Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution28
that is not includable in gross income, determined without regard to the exclusion for29 HLS 11RS-800 ORIGINAL
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net unrealized appreciation with respect to employer securities. A portion of a1
distribution shall not fail to be an eligible rollover distribution merely because the2
portion consists of after-tax employee contributions which are not includable in gross3
income; however, such portion may be paid only to an individual retirement account4
or annuity described in Section 408(a) or (b) of the Internal Revenue Code, or to a5
qualified defined contribution plan described in Section 401(a) or 403(a) of the6
Internal Revenue Code that agrees to account separately for amounts so transferred,7
including accounting separately for the portion of such distribution which is8
includable in gross income and the portion of such distribution which is not9
includable. The fund shall accept participant rollover contributions, direct rollovers10
of distributions made after December 31, 2001, or both, from the following types of11
plans: individual retirement accounts or annuities or plans qualified under Section12
401(a) or Section 403(a) of the Internal Revenue Code, or governmental deferred13
compensation arrangements subject to Section 457(b) of the Internal Revenue Code14
or tax sheltered annuities or other arrangements under Section 403(b) of the Internal15
Revenue Code, beginning on the effective date specified; but only for the purposes16
of repaying prior distributions or purchasing service credits as permitted under17
Section 415(k)(3) and Section 415(n) of the Internal Revenue Code. The board may18
promulgate rules in accordance with the provisions of the Administrative Procedure19
Act, R.S. 49:950 et seq., that change this definition in order to conform to provisions20
of the Internal Revenue Code and regulations thereunder.21
§1458. Computation of retirement benefits22
A.23
* * *24
(3) The board may promulgate rules in accordance with the provisions of the25
Administrative Procedure Act, R.S. 49:950 et seq., for purposes of compliance with26
Section 415 of the Internal Revenue Code which modify the requirements hereunder.27
B.(1) Maximum annual benefit. The retirement benefit of any member of28
the retirement system and which is not attributable to the member's after-tax29 HLS 11RS-800 ORIGINAL
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employee contribution, when expressed as an annual benefit may not exceed one1
hundred sixty-five thousand dollars per year, as adjusted for increases in the cost of2
living pursuant to Section 415 of the Internal Revenue Code. For purposes of3
determining whether a member's benefit exceeds this limitation, if the normal form4
of benefit is other than a single life annuity, such form shall be adjusted actuarially5
to the equivalent of a single life annuity. This single life annuity shall not exceed the6
maximum dollar limitation outlined in this Paragraph. No adjustment is required for7
qualified joint and survivor annuity benefits; pre-retirement disability benefits; or8
pre-retirement death benefits.9
(2)(a) Adjustment if benefit begins at age other than social security10
retirement age before age sixty-two. If benefit distribution begins before age sixty-11
two, the actual retirement benefit shall not exceed the adjusted dollar limitation. The12
adjusted dollar limitation shall be the equivalent, determined in a manner consistent13
with reduction of benefits for early retirement under the federal Social Security Act,14
of one hundred sixty-five thousand dollars beginning at age sixty-two, or, if greater,15
for a benefit beginning on or after age fifty-five, seventy-five thousand dollars per16
year. For benefits beginning before age fifty-five, the dollar limitation shall not17
exceed the actuarial equivalent of seventy-five thousand dollars per year beginning18
at age fifty-five.19
(b) Adjustment if benefit begins after social security retirement age age sixty-20
five. If benefit distribution begins after social security retirement age age sixty-five,21
the dollar limitation shall be increased to the equivalent of one hundred sixty-five22
thousand dollars beginning at social security retirement age, as adjusted for increases23
in the cost of living pursuant to Section 415 of the Internal Revenue Code.24
* * *25
(d) Interest assumption. The interest rate used for adjusting the maximum26
limitations above shall be:27
(i) For benefits commencing before social security retirement age and for28
forms of benefit other than straight life annuity age sixty-two, the greater of five29 HLS 11RS-800 ORIGINAL
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percent, or the rate used to determine actuarial equivalence for other purposes of this1
retirement system.2
(ii) For benefits commencing after social security retirement age age sixty-3
five, the lesser of five percent, or the rate used to determine actuarial equivalence for4
other purposes under this retirement system.5
(iii) For benefits payable in a form other than a straight life annuity, the6
greater of five and one-half percent, the rate used to determine actuarial equivalence7
for other purposes under the fund, and the rate that provides a benefit of not more8
than one hundred five percent of the benefit that would be provided if the applicable9
interest rate under Section 417(e)(3) of the Internal Revenue Code were the rate10
being used.11
(3) Adjustment for less than ten years of participation or service.12
* * *13
(4) Annual adjustment. The one hundred sixty-five thousand dollar14
limitation and seventy-five thousand dollar limitation provided in this Subsection15
shall be adjusted annually to the maximum dollar limits allowable as determined by16
the commissioner of the Internal Revenue Service under Section 415(d) of the17
Internal Revenue Code.18
* * *19
E.20
* * *21
(2) If the employer maintains or at any time maintained one or more22
qualified defined contribution plans covering any member in this system, a welfare23
benefit fund as defined in Internal Revenue Code Section 419(e), or an individual24
medical account as defined in Internal Revenue Code Section 415(l)(2), the sum of25
the member's defined contribution fraction and defined benefit fraction shall not26
exceed 1.0 in any limitation year, and the annual benefit otherwise payable to the27
member under this system shall be limited in order to satisfy such limitation. This28
provision shall no longer be effective for plan years beginning after December 31,29 HLS 11RS-800 ORIGINAL
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1999. If the employer maintains one or more qualified defined contribution plans1
covering a member of the fund, the amount allocated as an annual addition to a2
member shall not exceed the defined contribution dollar limitation. The board may3
promulgate rules in accordance with the provisions of the Administrative Procedure4
Act, R.S. 49:950 et seq., that determine how such aggregation shall take place, what5
portion of the fund shall be considered a defined contribution plan, and what benefits6
generated by member contributions shall be considered attributable to a defined7
contribution plan.8
* * *9
(5) The amount of annual additions which may be credited to the member's10
account for any limitation year shall not exceed the maximum permissible amount.11
Contributions and benefits under any other plan of the employer, to the extent that12
an adjustment is required to satisfy the requirements of this Section in the aggregate,13
shall be limited or reduced to the extent necessary to satisfy such requirement14
without reducing accrued benefits; however, only after such other plans have been15
modified shall the benefits and contributions under this plan be reduced. As soon as16
it is administratively feasible after the end of the limitation year, the maximum17
permissible amount for the limitation year shall be determined on the basis of the18
member's actual compensation for the limitation year. If there is an excess amount,19
the excess shall be disposed of as follows:20
* * *21
(c) If, after the application of Subparagraph (b) of this Paragraph, an excess22
amount still exists, and the member is covered by the plan at the end of the limitation23
year, the excess amount in the member's account shall be used to reduce employer24
contributions, including any allocation of forfeitures, for such member in the next25
limitation year if necessary. For a limitation year beginning on or after July 1, 2007,26
excess amounts allocated to a member shall be corrected through the Employee Plans27 HLS 11RS-800 ORIGINAL
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Compliance Resolution System or such other method permitted by the secretary of1
the treasury.2
* * *3
Section 2. R.S. 11:1404(E), 1457(B), and 1458(B)(2)(c) and (E)(5)(d) and (e) are4
hereby repealed.5
Section 3. This Act shall become effective on July 1, 2011; if vetoed by the governor6
and subsequently approved by the legislature, this Act shall become effective on July 1,7
2011, or on the day following such approval by the legislature, whichever is later.8
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Barras HB No. 481
Abstract: Relative to the La. Assessors' Retirement Fund provides relative to compliance
with applicable federal tax qualification requirements
Present law provides for compliance by the La. Assessors' Retirement Fund with applicable
federal tax qualification requirements of the Internal Revenue Code and federal regulations.
Proposed law retains present law and continues compliance with applicable federal tax
qualification requirements of the Internal Revenue Code by incorporating changes in federal
law and regulations.
Effective July 1, 2011.
(Amends R.S. 11:1402(6)(c) and (8), 1404(A), 1411(D), 1444(C) and (D), 1451, 1457(C),
1458(B)(1), (2)(a), (b), and (d), (3)(caption), and (4) and (E)(2) and (5)(c); Adds R.S.
11:1402(6)(d), 1444(E)(3), 1445(G), 1455(C), and 1458(A)(3); Repeals R.S. 11:1404(E),
1457(B), 1458(B)(2)(c) and (E)(5)(d) and (e))