ENROLLED
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ACT No. 399
Regular Session, 2011
HOUSE BILL NO. 569
BY REPRESENTATIVE ARNOLD
AN ACT1
To amend and reenact R.S. 11:185(C), 3685.1(A)(2) and (B)(2)(a), 3685.2(B) and (C),2
3688(A)(8), (9), (10), and (11), (B), (C), and (D), 3690, and 3695 and to enact R.S.3
11:185(D), 3685.2(D) and (E), 3688(A)(12) and (E), 3696, 3697, and 3698, and to4
repeal R.S. 11:3694, relative to the Harbor Police Retirement System for the Port of5
New Orleans; to provide with respect to financing, contributions, benefits,6
administration, and board of trustee education; to provide an effective date; and to7
provide for related matters.8
Notice of intention to introduce this Act has been published9
as provided by Article III, Section 13 and Article X, Section10
29(C) of the Constitution of Louisiana.11
Be it enacted by the Legislature of Louisiana:12
Section 1. R.S. 11:185(C), 3685.1(A)(2) and (B)(2)(a), 3685.2(B) and (C),13
3688(A)(8), (9), (10), and (11), (B), (C), and (D), 3690, and 3695 are hereby amended and14
reenacted and R.S. 11:185(D), 3685.2(D) and (E), 3688(A)(12) and (E), 3696, 3697, and15
3698 are hereby enacted to read as follows: 16
§185. Educational requirements for members of retirement system boards of17
trustees18
* * *19
C. The provisions of this Section shall apply to the following local retirement20
system: Harbor Police Retirement System.21 ENROLLEDHB NO. 569
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C.D.(1) For purposes of this Section "actuarial science" means the1
application of mathematical and statistical methods to estimate future payment for2
benefits, to set forth an orderly and convenient way to provide the funds necessary3
to make those future payments, to determine the effects of asset and liability4
experience on pension fund costs, and to study the demographics of plan members,5
particularly in relation to long-term risk assessments, mortality, and morbidity.6
(2) For each system to which the provisions of this Section apply, every7
member of the board of trustees shall complete continuing education or professional8
development training during each twelve-month period from September first to9
August thirty-first as provided in this Subsection. By October fifteenth of each year,10
the board of trustees of each state and statewide retirement system system to which11
this Section applies shall submit to the House and Senate committees on retirement12
a letter stating whether or not each member of that board has met the requirements13
of this Section in the previous twelve-month period and giving the date or dates upon14
which the required training hours were completed by each member.15
(3) Each year, any member to whom this Section applies shall attend at least16
eight hours of investment training, two hours of actuarial science information17
education, one hour of education regarding the laws, rules, and regulations applicable18
to his system, and one hour of instruction on fiduciary duty and ethics. These19
training hours may be conducted by the staff of the respective retirement systems or20
by outside experts. Two or more systems may combine any such training. Any21
member who is elected or appointed to the board for the first time on or after June22
first shall only be required to comply with the provisions of Paragraph (4) of this23
Subsection.24
(4) Except as otherwise provided by the constitution or in R.S. 42:3.1, no25
board member to whom this Section applies shall receive per diem during any26
calendar year unless and until he has completed the fiduciary and ethics requirement27
and at least one hour each of investment, actuarial science, and legal education in the28
current twelve-month cycle. The system shall submit evidence of training in29 ENROLLEDHB NO. 569
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compliance with this Paragraph to the speaker of the House of Representatives and1
the president of the Senate within fourteen days after the completion thereof.2
(5) Additionally, no new board member to whom this Section applies shall3
be permitted to vote on any matter until he has completed one hour of education in4
each of the four required areas.5
* * *6
§3685.1. Limitations on payment of benefits7
A.8
* * *9
(2) If the member is married and his spouse survives him, the designated10
beneficiary for at least a qualified joint and survivor annuity and fifty percent of the11
Deferred Retirement Option Plan Account shall be his spouse, unless such spouse12
has consented to the contrary in writing before a notary public. For purposes of this13
Paragraph, "spouse" shall mean that person who is married to the member under a14
legal regime of community of acquets and gains on his effective date of retirement15
or effective date of participation in the DROP, whichever is earlier.16
* * *17
B.18
* * *19
(2) However, the provisions of Paragraph (1) of this Subsection shall not20
apply:21
(a) To any portion of a member's benefit which is payable to or for the22
benefit of a designated beneficiary, over the life of or over the life expectancy of23
such beneficiary, provided that such distributions begin no later than one year after24
the date of the member's death, or in the case of the member's surviving spouse, the25
date the member would have attained the age of seventy years and six months. If the26
designated beneficiary is the member's surviving spouse and if the surviving spouse27
dies before the distribution of benefits commences, then Paragraph (1) of this28
Subsection shall be applied as if the surviving spouse were the member. If the29
designated beneficiary is a child of the member, for purposes of satisfying the30 ENROLLEDHB NO. 569
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requirement of Paragraph (1) of this Subsection, any amount paid to such child shall1
be treated as if paid to the member's surviving spouse if such amount would become2
payable to such surviving spouse, if alive, upon the child's reaching age eighteen or,3
if later, upon the child's completing a designated event. For purposes of this4
Subparagraph, a designated event shall be the later of the date the child is no longer5
disabled or the date the child ceases to be a full-time student or attains age6
twenty-three, if earlier.7
* * *8
§3685.2. Computation of retirement benefits9
* * *10
B.(1) If a member is a member or participant in more than one defined11
benefit pension plan maintained by the state, its agencies, or its political12
subdivisions, then such member's benefit, considered in the aggregate after taking13
into account the benefits provided by all such retirement plans, shall not exceed the14
limitations provided in this Subsection.15
(2) The benefits payable with respect to a participant under any defined16
benefit plan shall be deemed not to exceed the limitations of Section 415(b) of the17
Internal Revenue Code if:18
(a) The retirement benefits payable with respect to such participant under19
such plan and under all other defined benefit plans of the employer do not exceed ten20
thousand dollars for the plan year or for any prior plan years.21
(b) The employer has not at any time maintained a defined contribution plan22
in which the participant participated.23
The annual retirement benefit of any member of the retirement system who24
is not a qualified participant, as defined by Paragraph (2) of Subsection A of this25
Section, and which is not attributable to the member's after-tax employee26
contribution, cannot exceed the lesser of ninety thousand dollars or one hundred27
percent of such member's average compensation. For purposes of determining28
whether a member's benefit exceeds those limitations, the following shall apply:29
(1) Adjustment if benefit not single life annuity.30 ENROLLEDHB NO. 569
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(a) If the normal form of benefit is other than a single life annuity, such form1
shall be adjusted actuarially to the equivalent of a single life annuity. This single life2
annuity shall not exceed the maximum dollar or percent limitations outlined in this3
Section.4
(b) No adjustment is required for the following:5
(i) Qualified joint and survivor annuity benefits.6
(ii) Pre-retirement disability benefits.7
(iii) Pre-retirement death benefits.8
(iv) Post-retirement medical benefits.9
(2) Adjustment if benefit commences before social security retirement age.10
If benefit distribution commences before social security retirement age, the actual11
retirement benefit shall not exceed the lesser of one hundred percent of the member's12
average compensation or the adjusted dollar limitation. The adjusted dollar13
limitation shall be the equivalent, determined in a manner consistent with reduction14
of benefits for early retirement under the Social Security Act, of ninety thousand15
dollars commencing at social security retirement age. For purposes of this16
adjustment, survivor benefits, that portion of a joint and survivor annuity which is17
the survivor benefit, and any other ancillary benefits shall not be taken into account.18
(3) Adjustment if benefit commences after social security retirement age.19
If benefit distribution commences after social security retirement age, the dollar20
limitation shall be increased to the equivalent of ninety thousand dollars21
commencing at social security retirement age.22
(4) Social security retirement age defined. For purposes of this Subsection,23
the term "social security retirement age" means the age used as the retirement age24
under 42 U.S.C. §416(1) of the Social Security Act, except that such Section shall25
be applied:26
(a) Without regard to the age increase factor.27
(b) As if the early retirement age under 42 U.S.C. §416 were sixty-two.28
(3)(5) The interest rate used for adjusting the maximum limitations of29
Section 415(b) of the Internal Revenue Code shall be as follows:30 ENROLLEDHB NO. 569
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(a) For benefits commencing before social security retirement age and for1
forms of benefits other than straight life annuity, the greater of five percent or the2
rate used to determine the actuarial equivalent.3
(b) For benefits commencing after social security retirement age, the lesser4
of five percent or the rate used to determine actuarial equivalent.5
(6) Adjustment for less than ten years of participation or service.6
(a) If retirement system benefits are payable under this retirement system to7
a member who has less than ten years of participation in the retirement system, the8
dollar limitation referred to in the Introductory Paragraph of this Subsection shall be9
multiplied by a fraction, the numerator of which is the member's number of years of10
participation in the system, not greater than ten, and the denominator of which is ten.11
(b) If retirement benefits are payable under this retirement system to a12
member who has less than ten years of service with the employer, the percentage13
limitation referred to in the Introductory Paragraph of this Subsection and the dollar14
limitation referred to in Paragraph (9) of this Subsection shall be multiplied by a15
fraction, the numerator of which is the member's number of years of service with the16
employer, not greater than ten, and the denominator of which is ten.17
(7) Annual adjustment. The ninety thousand dollar limitation provided in18
this Subsection shall be adjusted annually to the maximum dollar limits allowable19
by the secretary of the Treasury of the United States under Section 415(d) of the20
Internal Revenue Code, such adjustments to take effect on the first day of each fiscal21
year following December 31, 1987. The adjustment shall not exceed the adjustment22
in effect for the calendar year in which the fiscal year of the system begins. The23
adjusted earlier limitation is applicable to employees who are members of the system24
and to members who have retired or otherwise terminated their service under the25
system with a nonforfeitable right to accrued benefits, regardless of whether they26
have actually begun to receive benefits. This system shall be considered specifically27
to provide for such post-retirement adjustments. For any limitation year beginning28
after separation from service occurs, the annual adjustment factor is a fraction, the29
numerator of which is the adjusted dollar limitation for the limitation year in which30 ENROLLEDHB NO. 569
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the compensation limitation is being adjusted and the denominator of which is the1
adjusted dollar limitation for the limitation year in which the member separated from2
service. No adjustment shall be permitted with respect to post October 14, 1987,3
limitations.4
(8) If a member is a member or participant in more than one defined benefit5
pension plan maintained by the state, its agencies, or its political subdivisions, then6
such member's benefit, considered in the aggregate after taking into account the7
benefits provided by all such retirement plans, shall not exceed the limitations8
provided in this Subsection.9
(9) The benefits payable with respect to a participant under any defined10
benefit plan shall be deemed not to exceed the limitations of Section 415(b) of the11
Internal Revenue Code if:12
(a) The retirement benefits payable with respect to such participant under13
such plan and under all other defined benefit plans of the employer do not exceed ten14
thousand dollars for the plan year or for any prior plan years.15
(b) The employer has not at any time maintained a defined contribution plan16
in which the participant participated.17
(4)(10) No benefit shall be considered to have exceeded the limitation18
provisions of this Section if the amount of the initial benefits did not exceed the19
limitations of Section 415(b) of the Internal Revenue Code, nor exceed any20
comparable provision in effect at the time of the initial payment, and the amount of21
any subsequent benefits payable in any year did not exceed the amount of the initial22
benefits, except for allowable cost-of-living adjustments.23
C. The board of trustees shall make no actuarial adjustment under this24
Section by reason of the member's retirement after normal retirement age.25
D. The board of trustees shall adopt rules for the administration of the limits26
provided in this Section and the limitations under Section 415 of the Internal27
Revenue Code including adjustments in the annual dollar limitation to reflect any28
cost-of-living adjustments authorized by the Internal Revenue Code.29 ENROLLEDHB NO. 569
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C E.(1) The provisions of this Section shall apply if any member is covered,1
or has been covered, by another plan maintained by the employer, including a2
qualified plan or a welfare benefit plan as defined in Internal Revenue Code Section3
419(e), or an individual medical account as defined by Internal Revenue Code4
Section 415(l)(2).5
(2) If a member is or has ever been covered under more than one defined6
benefit plan maintained by the employer, the sum of the members annual benefit7
from all such plans shall not exceed the maximum amount permissible.8
(3)(a) If the employer maintains or at any time maintained one or more9
qualified defined contribution plans covering any member in this system, a welfare10
benefit fund as defined in Internal Revenue Code Section 419(e), or an individual11
medical account as defined by Internal Revenue Code Section 415(l)(2), the sum of12
the member's defined contribution fraction and defined benefit fraction shall not13
exceed one percent in any limitation year and the annual benefit otherwise payable14
to the member under this system shall be limited in order to satisfy such limitations.15
This provision shall no longer be effective for plan years beginning after December16
31, 1999.17
* * *18
§3688. Administration19
A. Board of Trustees.20
* * *21
(8) The Board of Trustees shall elect from its membership a Chairman and22
shall by a unanimous vote appoint a Secretary who shall be one of its members. The23
Board of Trustees shall engage such actuarial and other services as shall be required24
to transact the business of the retirement system. The compensation of all persons25
engaged by the Board of Trustees, and all other expenses of the Board necessary for26
the operation of the retirement system shall be paid at such rates and in such amounts27
as the Board of Trustees shall approve.28
(9) The Board of Trustees shall engage such actuarial and other services as29
shall be required to transact the business of the retirement system. The30 ENROLLEDHB NO. 569
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compensation of all persons engaged by the Board of Trustees, and all other1
expenses of the board necessary for the operation of the retirement system shall be2
paid at such rates and in such amounts as the Board of Trustees shall approve. 3
(9)(10) The Board of Trustees shall keep in convenient form such data as4
shall be necessary for actuarial valuation of the various funds of the retirement5
system, and for checking the experience of the system.6
(10)(11) The Board of Trustees shall keep a record of all of its proceedings7
which shall be open to public inspection. It shall publish annually a report showing8
the fiscal transactions of the retirement system for the preceding fiscal year, the9
amount of the accumulated cash and securities of the system, and the last balance10
sheet showing the financial condition of the system by means of an actuarial11
valuation of the assets and liabilities of the retirement system.12
(11)(12)(a) Notwithstanding any other provisions of law to the contrary, the13
The members of the board of trustees of the Harbor Police Retirement System shall14
receive for attendance at meetings of the board a per diem of seventy-five dollars per15
meeting, provided funds are available for this purpose and Civil Service rules are16
followed.17
(b) The members of the board of trustees shall receive a per diem for each18
meeting of the board. However, no member of the board shall be eligible for a per19
diem for more than six board meetings in any year.20
B. Legal advisor. The Attorney General shall be the legal advisor of the21
Board of Trustees.22
C. Medical board advisor. The Board of Trustees shall may designate a23
Medical Board to be composed of three group of licensed medical professionals to24
provide medical advice to the trustees related to disability and other medical25
determinations. The trustees will obtain the advice of physicians not eligible to26
participate in the retirement system to provide such advice. If required, other27
physicians may be employed to report on special cases. The board of trustees may28
use Medical Board shall the medical advisor firm to provide physicians to arrange29
for and pass upon all medical examinations required under the provisions of this30 ENROLLEDHB NO. 569
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Subpart, and the physicians approved by the trustees shall investigate all essential1
statements and certificates by or on behalf of a member in connection with an2
application for disability retirement, and shall report in writing to the Board of3
Trustees its conclusion and recommendations upon the matters referred to it.4
D. Actuary; duties and actuarial assumptions. (1) The Board of Trustees5
and the Board of Commissioners of the Port of New Orleans shall jointly designate6
an actuary who shall be the technical advisor of the Board of Trustees on actuarial7
matters regarding the operation of the fund created by the provisions of this Subpart,8
and shall perform such other duties as are required in connection therewith.9
(2) Immediately after the establishment of the retirement system, the actuary10
shall make such investigation of the mortality, service and compensation experience11
of the members of the system as he shall recommend and the Board of Trustees shall12
authorize, and on the basis of such investigation he shall recommend for adoption by13
the Board of Trustees such tables and such rates as are required in Subparagraphs14
(3)(a) and (b) of this Section. The Board of Trustees shall adopt all actuarial tables,15
assumptions, and certify rates, and as soon as practicable thereafter the. The actuary16
shall make a valuation valuations and determinations based on such tables,17
assumptions, and rates of the assets and liabilities of the funds created by this18
Subpart.19
(3) In the year of nineteen hundred seventy-two, and at At least once in each20
five-year period thereafter, and upon approval of the Board of Trustees, the actuary21
shall make an actuarial investigation into the mortality, service and compensation22
experience of the members and beneficiaries of the retirement system, system. and23
shall make a valuation of the assets and liabilities of the funds of the system, and24
taking into account the result of such investigation and valuation, the The Board of25
Trustees shall:26
(a) Adopt adopt for the retirement system such mortality, service, and other27
tables and actuarial assumptions as shall be deemed necessary.28
(b) Certify the rates of contribution payable by the employer on account of29
new entrants.30 ENROLLEDHB NO. 569
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(4) On the basis of such tables and actuarial assumptions as the Board of1
Trustees shall adopt, the actuary shall make an annual valuation of the assets and2
liabilities of the funds of the system created by this Subpart.3
(5)(a) Unless different actuarial assumptions are formally adopted and4
disclosed, the following assumptions shall be used in determining actuarial5
equivalents:6
(i) Interest shall be compounded annually at the rate of seven percent per7
annum.8
(ii) Annuity rates shall be determined on the basis of the 1971 Group9
Annuity Unisex Mortality Tables. most current mortality table recommended by the10
Society of Actuaries for retirement systems.11
(iii) Effective July 1, 2011, interest for calculating transfers into the Harbor12
Police Retirement System and for buying back refunded service shall be eight and13
one-quarter percent per annum.14
(b) The board of trustees Board of Trustees may authorize the use of interest15
and mortality rates in determining the actuarial equivalents which are different from16
the actuarial assumptions used for other purposes in this Subpart. Any change in17
such actuarial assumptions shall be considered a part of this retirement system and18
shall be considered an amendment to the provisions of this Section. In order to be19
effective, such change must be formally adopted by the board of trustees and20
disclosed to members of the retirement system.21
E. All service providers including the certified public accountant, actuary,22
legal consultant, bank custodian, investment advisor, and plan administrator shall be23
selected jointly by the board of trustees and the Board of Commissioners of the Port24
of New Orleans.25
* * *26
§3690. Method of financing27
A. All of the assets of the retirement system shall be credited according to28
the purpose for which they are held to one of four funds, namely, the Annuity29 ENROLLEDHB NO. 569
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Savings Fund, the Annuity Reserve Fund, the Pension Accumulation Fund, and the1
Expense Fund.2
B. Annuity savings fund. The Annuity Savings Fund shall be the fund in3
which shall be accumulated contributions from the compensation of members to4
provide for their annuities. Contributions to the Annuity Savings Fund shall be made5
as follows:6
A. Employee contributions.7
(1) The port commission shall make deductions from any salary or wages8
paid by them to any member of this fund equal to seven nine percent of the9
compensation paid him in each and every payroll after August 1, 1971.10
(2) The deductions provided for herein shall be made notwithstanding that11
the minimum compensation provided for by law for any member shall be reduced12
thereby. Every member shall be deemed to consent and agree to the deductions13
made and provided for herein and shall receipt for his full salary or compensation,14
and payment of salary or compensation less said deductions shall be a full and15
complete discharge and acquittance of all claims and demands whatsoever for the16
services rendered by such person during the period covered by such payment, except17
as to the benefits provided under this Subpart. The employer shall certify to the18
Board of Trustees board of trustees on each and every payroll or in such other19
manner as the Board of Trustees board may prescribe, the amounts to be deducted;20
and each of said amounts shall be deducted, and when deducted shall be paid into21
said Annuity Savings Fund, and shall be credited to the individual account of the22
member from whose compensation said deduction was made.23
C. Annuity reserve fund. The Annuity Reserve Fund shall be the fund in24
which shall be held the reserves on all annuities in force and from which shall be25
paid all annuities and all benefits in lieu of annuities, payable as provided in this26
Subpart. Should a beneficiary retired on account of disability be restored to active27
service with a compensation not less than his average final compensation at the time28
of his last retirement, his annuity reserve shall be transferred from the Annuity29 ENROLLEDHB NO. 569
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Reserve Fund to the Annuity Savings Fund and credited to his individual account1
therein.2
D. Pension accumulation fund. The Pension Accumulation Fund shall be the3
fund in which shall be accumulated all reserves for the payment of all pensions and4
other benefits payable from contributions made by employers. Contributions to and5
payments from the Pension Accumulation Fund shall be made as follows:6
(1) On account of each member there shall be paid annually into the Pension7
Accumulation Fund for the preceding fiscal year an amount equal to a certain8
percentage of the earnable compensation of each member to be known as the9
"Normal Contribution", and an additional amount equal to a percentage of his10
earnable compensation to be known as the "Accrued Liability Contribution". The11
rate per centum of such contributions shall be fixed on the basis of the liabilities of12
the retirement system as shown by actuarial valuation; subject to the limitation of13
Paragraph D(8).14
(2) The total amount that shall be contributed annually to the pension15
accumulation fund shall be equal to the amount obtained by applying the total rate16
("normal contribution" plus "accrued liability contribution") to the earnable17
compensation of all members. This amount shall be paid as provided in Paragraphs18
D(3) and (4).19
B. Employer contributions.20
(3)(1) The Port Commission shall annually contribute an amount equal to the21
rate per centum determined herein in accordance with Paragraphs D(4) and (8) (2)22
and (3) of this Subsection. The first contribution under this Subpart shall begin with23
the fiscal year beginning July 1, 1971 and shall be made annually thereafter.24
Contributions shall be made monthly based on the same salary or wages used to25
calculate the members' contributions.26
(4)(2) On the basis of regular interest and of such mortality and other tables27
as shall be adopted by the Board of Trustees, the actuary engaged by the Board to28
make each valuation required by this Subpart during the period over which the29
accrued liability contribution is payable, immediately after making such valuation,30 ENROLLEDHB NO. 569
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shall determine the uniform and constant percentage of the compensation of the1
average new entrant, which if contributed on the basis of compensation of such new2
entrant throughout the entire period of active service would be sufficient to provide3
for the payment of any pension payable on his account. The rate per centum so4
determined shall be known as the "normal contribution" rate. After the accrued5
liability contribution has ceased to be payable, the The normal contribution rate shall6
be the rate per centum of the earned salary of all members obtained by deducting7
from the total liabilities of the Pension Accumulation Fund fund the amount of the8
funds in hand to the credit of that the fund and dividing the remainder by one9
percentum of the present value of the prospective future salaries of all members as10
computed on the basis of the mortality and service tables adopted by the Board of11
Trustees board of trustees and regular interest as set forth in R.S.12
11:3688(D)(5)(a)(i). The normal rate of contributions shall be determined by the13
actuary after each valuation.14
(5) Immediately succeeding the first valuation the actuary engaged by the15
Board of Trustees shall compute the rate per centum of the total annual16
compensation of all members which is necessary to liquidate the amount of the total17
pension liability on account of all members and beneficiaries which is not18
dischargeable by the aforesaid normal contribution made on account of such19
members during the remainder of the active service. The rate per centum originally20
so determined shall be known as the "Accrued Liability Contribution" rate.21
(6) The total amount payable in each year to the Pension Accumulation Fund22
shall be not less than the sum of the rate per centum known as the "Normal23
Contribution Rate" and the "Accrued Liability Contribution Rate" of the total24
compensation earned by all members during the preceding year and shall not exceed25
the limitation set forth in Paragraph D(8).26
(7) The accrued liability contributions shall be discontinued as soon as the27
accumulated reserve in the Pension Accumulation Fund shall equal the present value,28
as actuarially computed and approved by the Board of Trustees, of the total liability29
of such fund less the present value, computed on the basis of the normal contribution30 ENROLLEDHB NO. 569
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rate then in force, of the prospective normal contributions to be received on account1
of all persons who are at that time members.2
(8)(3) The maximum contribution by the employer, Board of Commissioners3
of the Port of New Orleans, shall not exceed thirteen twenty percent of the earned4
compensation of the members in any one year. There shall be no contribution by5
employer other than the percentage of earned compensation of the members as6
provided in this Subpart, and subject to the maximum stated above, even in the event7
that the payment by employer should not be sufficient, when combined with the8
amount in the fund, to provide the retirement allowances and other benefits payable9
out of the fund.10
(9) C. Court fines.11
All fines collected by any court, official or agency from violators of12
ordinances of the City of New Orleans applicable to the wharves, landings and river13
front of the city or ordinances of the Board of Commissioners of the Port of New14
Orleans, as provided for in R.S. 34:25, shall be transmitted to the board of trustees15
of this system. Such funds shall be used by the board solely for the payment of the16
retirement allowances provided for in Subsections B, C, and D of this Section, and17
such funds shall be supplemented by such other funds as are now or may be hereafter18
paid into the system on account of members of the harbor police department of the19
Port of New Orleans.20
(10) All pensions, and benefits in lieu thereof, with the exception of those21
payable on account of members who receive no prior service allowance, payable22
from contributions of employees, shall be paid from the Pension Accumulation Fund23
to the Annuity Reserve Fund.24
(11) Upon the retirement of a member not entitled to credit for prior service,25
an amount equal to his pension reserve shall be transferred from the Pension26
Accumulation Fund to the Annuity Reserve Fund.27
(12) D. Annual expenses.28
The Board of Trustees board of trustees may transfer annually from the29
Pension Accumulation Fund to the Expense Fund incur annual expenses up to a sum30 ENROLLEDHB NO. 569
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not to exceed one and one-half percent of the total assets of the system as shown by1
the balance sheet at the end of the last fiscal year.2
E. Expense fund. The Expense Fund shall be the fund from which the3
expenses of the retirement system shall be paid, exclusive of amount payable as4
retirement allowances and other benefits provided therein. Contributions shall be5
made to the Expense Fund as follows. The Board of Trustees shall determine6
annually the amount required to defray such expenses for the ensuing fiscal year and7
shall have the right to transfer the amount required to defray the cost of expenses of8
administration from the amount transferred from the Pension Accumulation Fund.9
F E. Collections of contributions.10
(1) The collection of members' contributions shall be as follows:11
(a) The Port Commission shall cause to be deducted on each and every12
payroll of a member for each and every payroll period subsequent to the date of13
establishment of the retirement system the contributions payable by such member as14
provided in this Subpart.15
(b) The Treasurer, or other officer authorized to issue warrants, shall make16
deductions from salaries of members as provided in this Subpart, and shall transmit17
monthly the amount specified to be deducted to the Secretary-Manager of the Board18
of Trustees. The Secretary-Manager of the Board of Trustees after making a record19
of all such receipts shall deposit them in a bank or banks selected by the Board of20
Trustees.21
(2) The collection of employers' contributions, if and when assessed or22
required, shall be as follows. Upon the basis of each actuarial valuation provided23
herein, the Board of Trustees shall annually prepare a statement of the total amount24
necessary for the ensuing fiscal year to the Pension Accumulation and Expense25
Funds as provided under Subsections D and E of this Section.26
* * *27
§3695. Direct rollover28
A. Notwithstanding any other provision of law to the contrary that would29
otherwise limit a member's election under this Section, a member may elect, at the30 ENROLLEDHB NO. 569
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time and in the manner prescribed by the board of trustees, to have any portion of an1
eligible rollover distribution paid directly to an eligible retirement plan specified by2
the member in a direct rollover.3
B. This Section shall apply to all eligible rollover distributions by the system4
made on or after January 1, 1993. An "eligible rollover distribution" is any5
distribution of all or any portion of the balance to the credit of a member, except that6
an eligible rollover distribution does not include:7
(1) Any distribution that is one of a series of substantially equal periodic8
payments, not less frequently than annually, made for the life or life expectancy of9
the member, or the joint lives or joint life expectancies of the member and the10
member's designated beneficiary, or for a specified period of ten years or more.11
(2) Any distribution to the extent that such distribution is required under12
Section 401(a)(9) of the Internal Revenue Code.13
C. An "eligible retirement plan" shall mean any of the following:14
(1) An individual retirement account described in Section 408(a) of the15
Internal Revenue Code.16
(2) An individual retirement annuity described in Section 408(b) of the17
Internal Revenue Code.18
(3) An annuity plan described in Section 403(a) of the Internal Revenue19
Code.20
(4) A qualified trust as described in Section 401(a) of the Internal Revenue21
Code, provided that such trust accepts the member's eligible rollover distribution.22
(5) An eligible deferred compensation plan described in Section 457(b) of23
the Internal Revenue Code that is maintained by an eligible governmental employer,24
provided the plan contains provisions to account separately for amounts transferred25
into such plan.26
(6) An annuity contract described in Section 403(b) of the Internal Revenue27
Code.28
D. A "distributee" as provided for in this Section shall include:29
(1) A member or former member.30 ENROLLEDHB NO. 569
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(2) The member's or former member's surviving spouse, or the member's or1
former member's former spouse with whom a benefit or a return of employee2
contributions is to be divided pursuant to R.S. 11:291(B), with reference to an3
interest of the member or former spouse.4
(3) The member's or former member's non-spouse beneficiary, provided the5
specified distribution is to an eligible retirement plan as defined in Subsection C of6
this Section.7
§3696. Errors and omissions8
Should any change or error in the records result in any member or beneficiary9
receiving from the retirement system more or less than he would have been entitled10
to receive had the records been correct, the board of trustees shall correct such error,11
and as far as practicable, shall adjust the payment in such a manner that the actuarial12
equivalent of the benefit to which such member or beneficiary was correctly entitled13
shall be paid.14
The corrected benefit amount shall be paid prospectively. When considering15
corrections to the account of members for past erroneous benefit payments, the16
collection of overpayments or payment of underpayments may be waived if (1) it is17
deemed by the trustees to not be cost-effective for the system, in relation to the18
amount of the overpayment or underpayment, to attempt to locate the beneficiary or19
estate of such members and collect the overpayment or pay the underpayment or (2)20
if it is deemed by the trustees to cause an extreme hardship on the member or21
beneficiary.22
§3697. Effective dates23
All benefit changes shall be prospective only unless stated otherwise in the24
Act. Statutory benefit changes shall not apply to members who have already retired.25
§3698. Unusual Benefit Adjustments26
A. Should it be discovered through an audit or review for statutory27
compliance and benefit payment calculations to be concluded in 2011, that unusual28
errors in benefit determinations and calculations were made, such errors shall be29 ENROLLEDHB NO. 569
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adjusted pursuant to the requirements of R.S. 11:3683 and 3685 and the following1
provisions:2
(1) For members who were hired on July 9, 1957, January 3, 1959, June 28,3
1961, June 21, 1969, and September 23, 1970, and whose retirement eligibility4
determination erroneously included unused annual leave and unused sick leave as5
creditable service in determining eligibility for retirement, the use of such leave shall6
be allowed. This adjustment shall be effective for the designated members only and7
only in determining the amount of the correct benefit payments going forward.8
(2) For members hired on August 29, 1990, and April 4, 1994, who were9
over the age of eligibility for membership and erroneously allowed to become a10
member and for whom all normal member and employer contributions have been11
made, whether the member is still employed or retired from the system, the member12
shall be considered as a fully qualified member of the system. This adjustment shall13
be effective for the designated members only and only in determining the amount of14
the correct benefit payments going forward.15
(3) For members hired on July 1, 1947, November 8, 1956, July 9, 1957,16
January 3, 1959, June 28, 1961, February 20, 1967, July 3, 1968, December 2, 1968,17
January 1, 1969, March 25, 1969, April 21, 1969, June 21, 1969, October 4, 1969,18
November 15, 1969, and September 23, 1970, who were granted military credit19
eligibility in accordance with R.S. 11:3684 but who did not purchase such eligible20
military credit in accordance with R.S. 29:251.2(B) and such unpurchased credit was21
erroneously used in determining their eligibility for retirement and/or erroneously22
used in their retirement benefit calculation, the use of such military credit shall be23
allowed. When a member hired on September 22, 1948, who had been granted24
military credit eligibility by another retirement system in accordance with R.S.25
11:143 but who did not purchase such eligible credit in the Harbor Police Retirement26
System as required by R.S. 11:143 and such unpaid credit was erroneously used in27
determining his eligibility for retirement and/or was erroneously used in his benefit28
calculation, the use of such military credit shall be allowed. When a member who29
was hired on September 23, 1970, and who resigned on July 31, 1971, and was30 ENROLLEDHB NO. 569
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rehired on September 23, 1971, and who therefore was not a member on August 1,1
1971, and therefore not eligible for military service credit in accordance with R.S.2
11:3684, but who was erroneously granted eligibility for such military credit and3
who did not purchase such eligible military credit in accordance with R.S.4
29:251.2(B) and such unpurchased credit was erroneously used in determining5
eligibility for retirement and/or erroneously used in the retirement benefit6
calculation, the use of such military credit shall be allowed. This adjustment shall7
be effective for the designated members only and only in determining the amount of8
the correct benefit payments going forward.9
(4) Act 474 of the 1985 Regular Session of the Legislature increased the10
service benefit of three percent per year of service to three and one-third percent per11
year of service and stipulated that "This Act shall become effective upon approval12
of the Board of Commissioners of the Port of New Orleans." Although no formal13
approval was given by the Board of Commissioners of the Port of New Orleans, the14
increase was implemented by the Harbor Police Retirement System upon the Act's15
signature by the governor. The benefits shall be calculated as if the required Board16
of Commissioners of the Port of New Orleans approval had been given on the17
effective date of the Act. This Act applies to all members who retired after the date18
of the act and the increased rate applies to all years of service credit. This19
adjustment shall be effective only for members currently employed on July 1, 2011,20
and retired as of July 1, 2011, and only in determining the amount of the correct21
benefit payments already paid to retirees and the correct benefit payments going22
forward.23
(5) The increase in service benefit in Act 474 of the 1985 Regular Session24
of the Legislature from three percent to three and one-third percent, as well as the25
increase from two and one-half percent to three percent in 1975, were implemented26
without containing language that stipulated for what years the increase was to apply,27
such as for all past years of service for active members, or for all future years of28
service for all active members, or for all past and future years of service for all active29
members. Instead of a "blended rate" wherein the rates in effect when the service30 ENROLLEDHB NO. 569
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credit was earned are used in the retirement benefit calculation, the increases were1
implemented as if each increase applied to all past and future years of service for all2
active members and such implementation shall apply for these adjustments. This3
adjustment shall be effective only for members currently employed on July 1, 2011,4
and retired members and only in determining the amount of the correct benefit5
payments already paid to retirees and the correct benefit payments going forward6
relative to the herein specified percentage changes.7
(6) Any member hired on November 8, 1976, who completed a period of8
DROP participation prior to July 1, 2008, and who is still employed on July 1, 2008,9
shall be subject to R.S. 11:3864(E)(2). This adjustment shall be effective for the10
designated member only and only in determining the amount of the correct benefit11
payment going forward.12
(7) Any cumulative net overpayment error will be forgiven in its entirety and13
any cumulative net underpayment error will be paid in its entirety in a lump sum.14
(8) For members hired on November 8, 1956, March 25, 1960, June 28,15
1961, September 29, 1966, April 5, 1967, March 27, 1968, July 3, 1968, December16
2, 1968, December 3, 1968, June 21, 1969, July 28, 1969, October 4, 1969,17
September 23, 1970, March 30, 1971, and July 8, 1971, who transferred into the18
Harbor Police Retirement System when the system was started on August 1, 1971,19
thereby transferring service credit from the Louisiana State Employees' Retirement20
System which was earned at a benefit factor of two and one-half percent per year21
and for a member hired on May 3, 1983, who transferred prior service credit from22
the Louisiana State Employees' Retirement System which was earned at a benefit23
factor of two and one-half percent per year, all of whom retired from the Harbor24
Police Retirement System and were paid benefits at the higher benefit factor of three25
percent per year or three and one-third percent per year for all years of service,26
including the transferred years, instead of the benefit factor from the transferring27
system of two and one half percent as specified in R.S. 11:1423, the higher28
percentage factor shall be allowed. This adjustment shall be effective for the29 ENROLLEDHB NO. 569
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designated members only and only in determining the amount of the correct benefit1
payments going forward.2
B. The adjustments authorized by this Section are not to be considered a3
waiver of any statute provision governing this system. The provisions of this Section4
shall be null and void and removed from the statute on July 1, 2012.5
Section 2. R.S. 11:3694 is hereby repealed in its entirety.6
Section 3. This Act shall become effective on July 1, 2011; if vetoed by the governor7
and subsequently approved by the legislature, this Act shall become effective on July 1,8
2011, or on the day following such approval by the legislature, whichever is later.9
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: