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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.
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
* * *20
(6)21
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(c) Compensation of a member in excess of one hundred fifty thousand1
dollars, as adjusted for increases in the cost of living under Section 401(a)(17)(B) of2
the Internal Revenue Code shall not be taken into account for years beginning on or3
after January 1, 1994, and ending before January 1, 2002. Compensation of a4
member in excess of two hundred thousand dollars as adjusted for increases in the5
cost of living under Section 401(a)(17)(B) of the Internal Revenue Code shall not be6
taken into account for years beginning on or after January 1, 2002. However, in7
determining monthly average final compensation for a member retiring on or after8
January 1, 2002, compensation which is permitted to be taken into account on or9
after January 1, 2002, but which occurred in a prior year that was included in the10
averaging period shall be taken into account. This limitation may be adjusted from11
time to time by rules promulgated by the board in accordance with the provisions of12
the Administrative Procedure Act, R.S. 49:950 et seq.13
(d) For purposes of compliance with federal tax-qualification requirements,14
the board may promulgate rules further defining "compensation" and "Section 41515
compensation", in accordance with the provisions of the Administrative Procedure16
Act.17
* * *18
(8) "Actuarial equivalent" means a benefit of equivalent value to the19
accumulated contributions, annuity or benefits and regular interest, as the case may20
be, computed on the basis of such mortality and interest tables as shall be adopted21
by the board of trustees in accordance with the provisions of R.S. 11:1404. In the22
absence of resolution by the board, the following assumptions shall be used:23
(a) Interest shall be compounded annually at a rate of seven and one-half24
percent per annum.25
(b) Annuity rates shall be determined on the basis of one hundred ten percent26
of the 1971 Group Annuity Unisex Mortality Tables mortality tables utilized for the27
latest system valuation approved by the Public Retirement Systems' Actuarial28
Committee.29
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§1404. Amendment of provisions of retirement system1
A. The provisions of the retirement system established by R.S. 11:1401 may2
be amended by action of the legislature in the same manner as any other statute may3
be amended by the legislature. In addition, action of the board with respect to the4
payment of cost-of-living adjustments, with respect to as provided in R.S. 11:2415
through 248, the payment of employee contributions, with respect to actuarial6
assumptions, as provided in R.S. 11:1402, and any changes required for conformity7
with requirements of the Internal Revenue Code, shall be considered amendments8
to the provisions of the retirement fund.9
* * *10
§1411. Creditable service11
* * *12
D. If a member takes a leave of absence governed by the Uniformed Services13
Employment and Reemployment Rights Act (USERRA), then upon his return to14
employment covered by the fund, the member shall share in employer contributions15
in the same manner as other members and shall not be considered to have terminated16
employment or to have incurred a break in service during such leave of absence. The17
employer shall be permitted to make an employer contribution in satisfaction of the18
affected employee's rights under USERRA. A member who does not return to19
employme nt shall not be affected by this provision. The board shall promulgate20
rules pursuant to the Administrative Procedure Act, which shall be part of the21
governing provisions of the fund, to implement the requirements of USERRA.22
* * *23
§1444. Limitation on payment of benefits24
* * *25
C. If a survivor benefit is payable to a specified person or persons or if a26
benefit is payable at death under an option elected pursuant to R.S. 11:1932 1423,27
the member shall be considered to have designated such person as a designated28
beneficiary hereunder. If there is more than one such person, then the oldest such29
person shall be considered to have been so designated, or, if none, then the oldest30 ENROLLEDHB NO. 481
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person entitled to receive a survivor benefit shall be considered to have been so1
designated. The designation of a designated beneficiary hereunder shall not prevent2
payment to multiple beneficiaries but shall only establish the permitted period of3
payments.4
D. Distributions from the system shall be made in accordance with the5
requirements set forth in Section 401(a)(9) of the Internal Revenue Code, including6
the minimum distribution incidental benefit rules applicable thereunder. The board7
may promulgate rules in accordance with the provisions of the Administrative8
Procedure Act, R.S. 49:950 et seq., to carry out the requirements of this Subsection,9
and the board may adopt provisions that amend the other provisions of this Section.10
E.11
* * *12
(3) The board may promulgate rules in accordance with the Administrative13
Procedure Act, R.S. 49:950 et seq., regarding any change in the required beginning14
date necessary for compliance with federal tax-qualification requirements.15
* * *16
§1445. Guaranteed return of accumulated contributions17
* * *18
G. The board may promulgate rules in accordance with the provisions of the19
Administrative Procedure Act, R.S. 49:950 et seq., that specify the manner of20
distributions and the direct rollover of such distributions.21
§1451. Conditions for payment of benefit22
No regular, disability, survivor, or other benefit from the fund, including a23
refund of accumulated employee contributions and any optional benefit, shall be24
payable until and unless a written application therefor is filed with the board25
providing such information and in such form as the board may require and until and26
unless all contributions by or for the member or former member have been received27
by the board and until and unless the member or former member has terminated28 ENROLLEDHB NO. 481
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service. This Section shall not preclude the payment of benefits consistent with R.S.1
11:1444 and any rules promulgated by the board thereunder.2
* * *3
§1455. Withdrawal of accumulated employee contributions; repayment4
* * *5
C. The board may promulgate rules in accordance with the provisions of the6
Administrative Procedure Act, R.S. 49:950 et seq., that permit the repayment from7
funds held for the member's benefit in another retirement plan or individual8
retirement account or annuity.9
* * *10
§1457. Qualified plan; direct rollover; eligible retirement plan; election11
* * *12
C. As used in this Section, the following terms shall mean the following:13
(1) "Direct rollover" means a payment by the plan to the eligible retirement14
plan specified by the distributee.15
(2) "Distributee" means a member or former member. In addition, the16
member's or former member's surviving spouse, or the member's spouse or former17
member's spouse with whom a benefit or return of employee contributions is to be18
divided pursuant to R.S. 11:291(B) are distributees with reference to an interest of19
the member or former spouse. The board may promulgate rules in accordance with20
the Administrative Procedure Act, R.S. 49:950 et seq., that change this definition in21
order to conform to the provisions of the Internal Revenue Code and regulations22
thereunder.23
(3) "Eligible retirement plan" means an individual retirement account24
described in Section 408(a) of the Internal Revenue Code, an individual retirement25
annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan26
described in Section 403(a) of the Code, or a qualified trust described in Section27
401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover28
distribution. However, in the case of an eligible rollover distribution to the surviving29
spouse, an eligible retirement plan is an individual retirement account or individual30 ENROLLEDHB NO. 481
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retirement annuity. "Eligible retirement plan" shall also mean an annuity contract1
described in Section 403(b) of the Internal Revenue Code and an eligible plan under2
Section 457(b) of the Internal Revenue Code which is maintained by a state, a3
political subdivision of a state, or any agency or instrumentality of a state or political4
subdivision of a state agreeing to account separately for amounts transferred into5
such plan from this fund. A distribution to a surviving spouse or to a spouse or6
former spouse who is the alternate payee under a qualified domestic relations order7
shall not make the retirement plan ineligible. The board may promulgate rules in8
accordance with the Administrative Procedure Act, R.S. 49:950 et seq., that change9
this definition in order to conform to provisions of the Internal Revenue Code and10
regulations thereunder.11
(4) "Eligible rollover distribution" means any distribution of all or any12
portion of the balance to the credit of the distributee, except that an eligible rollover13
distribution does not include: any distribution that is one of a series of substantially14
equal periodic payments, not less frequently than annually, made for the life or life15
expectancy of the distributee or the joint lives or joint life expectancies of the16
distributee and the distributee's designated beneficiary, or for a specified period of17
ten years or more; any distribution to the extent such distribution is required under18
Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution19
that is not includable in gross income, determined without regard to the exclusion for20
net unrealized appreciation with respect to employer securities. A portion of a21
distribution shall not fail to be an eligible rollover distribution merely because the22
portion consists of after-tax employee contributions which are not includable in gross23
income; however, such portion may be paid only to an individual retirement account24
or annuity described in Section 408(a) or (b) of the Internal Revenue Code, or to a25
qualified defined contribution plan described in Section 401(a) or 403(a) of the26
Internal Revenue Code that agrees to account separately for amounts so transferred,27
including accounting separately for the portion of such distribution which is28
includable in gross income and the portion of such distribution which is not29
includable. The fund shall accept participant rollover contributions, direct rollovers30 ENROLLEDHB NO. 481
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of distributions made after December 31, 2001, or both, from the following types of1
plans: individual retirement accounts or annuities or plans qualified under Section2
401(a) or Section 403(a) of the Internal Revenue Code, or governmental deferred3
compensation arrangements subject to Section 457(b) of the Internal Revenue Code4
or tax sheltered annuities or other arrangements under Section 403(b) of the Internal5
Revenue Code, beginning on the effective date specified; but only for the purposes6
of repaying prior distributions or purchasing service credits as permitted under7
Section 415(k)(3) and Section 415(n) of the Internal Revenue Code. The board may8
promulgate rules in accordance with the provisions of the Administrative Procedure9
Act, R.S. 49:950 et seq., that change this definition in order to conform to provisions10
of the Internal Revenue Code and regulations thereunder.11
§1458. Computation of retirement benefits12
A.13
* * *14
(3) The board may promulgate rules in accordance with the provisions of the15
Administrative Procedure Act, R.S. 49:950 et seq., for purposes of compliance with16
Section 415 of the Internal Revenue Code which modify the requirements hereunder.17
B.(1) Maximum annual benefit. The retirement benefit of any member of18
the retirement system and which is not attributable to the member's after-tax19
employee contribution, when expressed as an annual benefit may not exceed one20
hundred sixty-five thousand dollars per year, as adjusted for increases in the cost of21
living pursuant to Section 415 of the Internal Revenue Code. For purposes of22
determining whether a member's benefit exceeds this limitation, if the normal form23
of benefit is other than a single life annuity, such form shall be adjusted actuarially24
to the equivalent of a single life annuity. This single life annuity shall not exceed the25
maximum dollar limitation outlined in this Paragraph. No adjustment is required for26
qualified joint and survivor annuity benefits; pre-retirement disability benefits; or27
pre-retirement death benefits.28
(2)(a) Adjustment if benefit begins at age other than social security29
retirement age before age sixty-two. If benefit distribution begins before age sixty-30 ENROLLEDHB NO. 481
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two, the actual retirement benefit shall not exceed the adjusted dollar limitation. The1
adjusted dollar limitation shall be the equivalent, determined in a manner consistent2
with reduction of benefits for early retirement under the federal Social Security Act,3
of one hundred sixty-five thousand dollars of one hundred sixty thousand dollars, as4
adjusted. , or, if greater, for a benefit beginning on or after age fifty-five, seventy-5
five thousand dollars per year. For benefits beginning before age fifty-five, the6
dollar limitation shall not exceed the actuarial equivalent of seventy-five thousand7
dollars per year beginning at age fifty-five.8
(b) Adjustment if benefit begins after social security retirement age age9
sixty-five. If benefit distribution begins after social security retirement age age10
sixty-five, the dollar limitation shall be increased to the equivalent of one hundred11
sixty-five thousand dollars beginning at social security retirement age, as adjusted12
for increases in the cost of living pursuant to Section 415 of the Internal Revenue13
Code.14
* * *15
(d) Interest assumption. The interest rate used for adjusting the maximum16
limitations above shall be:17
(i) For benefits commencing before social security retirement age and for18
forms of benefit other than straight life annuity age sixty-two, the greater of five19
percent, or the rate used to determine actuarial equivalence for other purposes of this20
retirement system. specified under the fund.21
(ii) For benefits commencing after social security retirement age age sixty-22
five, the lesser of five percent, or the rate used to determine actuarial equivalence for23
other purposes under this retirement system. specified under the fund.24
(iii) For purposes of adjusting benefits for those benefits payable in a form25
other than a straight life annuity, the greater of five and one-half percent, the rate26
specified under the fund, and the rate that provides a benefit of not more than one27
hundred five percent of the benefit that would be provided if the applicable interest28
rate under Section 417(e)(3) of the Internal Revenue Code were the rate being used.29 ENROLLEDHB NO. 481
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(3) Adjustment for less than ten years of participation or service.1
* * *2
(4) Annual adjustment. The one hundred sixty-five thousand dollar3
limitation and seventy-f ive thousand dollar limitation provided in this Subsection4
shall be adjusted annually to the maximum dollar limits allowable as determined by5
the commissioner of the Internal Revenue Service under Section 415(d) of the6
Internal Revenue Code.7
* * *8
E.9
* * *10
(2) If the employer maintains or at any time maintained one or more11
qualified defined contribution plans covering any member in this system, a welfare12
benefit fund as defined in Internal Revenue Code Section 419(e), or an individual13
medical account as defined in Internal Revenue Code Section 415(l)(2), the sum of14
the member's defined contribution fraction and defined benefit fraction shall not15
exceed 1.0 in any limitation year, and the annual benefit otherwise payable to the16
member under this system shall be limited in order to satisfy such limitation. This17
provision shall no longer be effective for plan years beginning after December 31,18
1999. If the employer maintains one or more qualified defined contribution plans19
covering a member of the fund, the amount allocated as an annual addition to a20
member shall not exceed the defined contribution dollar limitation. The board may21
promulgate rules in accordance with the provisions of the Administrative Procedure22
Act, R.S. 49:950 et seq., that determine how such aggregation shall take place, what23
portion of the fund shall be considered a defined contribution plan, and what benefits24
generated by member contributions shall be considered attributable to a defined25
contribution plan.26
* * *27
(5) The amount of annual additions which may be credited to the member's28
account for any limitation year shall not exceed the maximum permissible amount.29
Contributions and benefits under any other plan of the employer, to the extent that30 ENROLLEDHB NO. 481
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an adjustment is required to satisfy the requirements of this Section in the aggregate,1
shall be limited or reduced to the extent necessary to satisfy such requirement2
without reducing accrued benefits; however, only after such other plans have been3
modified shall the benefits and contributions under this plan be reduced. As soon as4
it is administratively feasible after the end of the limitation year, the maximum5
permissible amount for the limitation year shall be determined on the basis of the6
member's actual compensation for the limitation year. If there is an excess amount,7
the excess shall be disposed of as follows:8
* * *9
(c) If, after the application of Subparagraph (b) of this Paragraph, an excess10
amount still exists, and the member is covered by the plan at the end of the limitation11
year, the excess amount in the member's account shall be used to reduce employer12
contributions, including any allocation of forfeitures, for such member in the next13
limitation year if necessary. For a limitation year beginning on or after July 1, 2007,14
excess amounts allocated to a member shall be corrected through the Employee Plans15
Compliance Resolution System or such other method permitted by the secretary of16
the treasury.17
* * *18
Section 2. R.S. 11:1404(E), 1457(B), and 1458(B)(2)(c) and (E)(5)(d) and (e) are19
hereby repealed.20
Section 3. This Act shall become effective on July 1, 2011; if vetoed by the governor21
and subsequently approved by the legislature, this Act shall become effective on July 1,22
2011, or on the day following such approval by the legislature, whichever is later.23
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: