HLS 12RS-527 ORIGINAL
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Regular Session, 2012
HOUSE BILL NO. 1004
BY REPRESENTATIVE TALBOT (BY REQUEST)
RETIREMENT/TEACHERS: Provides for the ability of certain members of the Teachers'
Retirement System of La. to change their election to enter the Deferred Retirement
Option Plan
AN ACT1
To enact R.S. 11:786(F), relative to the Deferred Retirement Option Plan for the Teachers'2
Retirement System of Louisiana; to provide for recision of election to participate3
subject to certain limitations; to provide for the disposition of amounts credited to4
the rescinding member's Deferred Retirement Option Plan; to provide with respect5
to service credit during the period of plan participation; to provide for calculation of6
average compensation of a rescinding member; to provide for an effective date; and7
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. 11:786(F) is hereby enacted to read as follows: 13
ยง786. Deferred Retirement Option Plan14
* * *15
F.(1) Notwithstanding the provisions of Subsection B of this Section or any16
other provision of law to the contrary, any member of the system who completed17
participation in the Deferred Retirement Option Plan on or before December 31,18
2011, shall be eligible to make a one-time, irrevocable election to rescind his19 HLS 12RS-527 ORIGINAL
HB NO. 1004
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participation period in the plan and return to active contributing membership1
provided he satisfies the following conditions:2
(a) The member has remained employed after his participation period in the3
Deferred Retirement Option Plan without a break in service.4
(b) The member has not received a distribution from his Deferred Retirement5
Option Plan Account.6
(c) The member forfeits to the system all amounts credited to his Deferred7
Retirement Option Plan Account.8
(d) The member's application to rescind participation in the Deferred9
Retirement Option Plan is received by the system on or before December 31, 2012.10
(2) A member who makes an irrevocable election to rescind his participation11
in the Deferred Retirement Option Plan pursuant to Paragraph (1) of this Subsection12
is responsible for all amounts in excess of the amount forfeited in his Deferred13
Retirement Option Plan Account necessary to offset any actuarial impact to the14
retirement system from his recision. The total amount due, prior to forfeiture of the15
amounts credited to the member's Deferred Retirement Option Plan Account, shall16
be determined pursuant to R.S. 11:158(C).17
(3) Average compensation for a member who makes an irrevocable election18
to rescind his participation in the Deferred Retirement Option Plan pursuant to19
Paragraph (1) of this Subsection shall be calculated as otherwise provided by law.20
Section 2. This Act shall become effective upon signature by the governor or, if not21
signed by the governor, upon expiration of the time for bills to become law without signature22
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If23
vetoed by the governor and subsequently approved by the legislature, this Act shall become24
effective on the day following such approval.25 HLS 12RS-527 ORIGINAL
HB NO. 1004
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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)]
Talbot HB No. 1004
Abstract: Relative to the Deferred Retirement Option Plan (DROP) of the Teachers'
Retirement System of La. (TRSL), allows a member who completed DROP prior to
Dec. 31, 2011, to make a one-time, irrevocable election to rescind participation in
DROP and return to active contributing membership if certain conditions are
satisfied.
Present law, relative to TRSL, provides that once DROP participation commences, the
election to participate is irrevocable and the term of participation may not be extended.
Provides that only one period of DROP participation is permitted. Provides that final
average compensation and election of retirement benefit option, if any, are fixed upon
commencement of participation and may not be changed after entry.
Proposed law provides that notwithstanding present law, any member of the system who
completed participation in DROP on or before Dec. 31, 2011, is eligible to make a one-time,
irrevocable election to rescind his participation period in the plan and return to active
contributing membership provided he satisfies the following conditions:
(1)The member has remained employed after participation in DROP without a break in
service.
(2)The member has not received a distribution from his DROP Account.
(3)The member forfeits to the system all amounts credited to his DROP Account.
(4)The member's application to rescind participation in DROP is received by the system
on or before Dec. 31, 2012.
Further provides that the member is responsible for all amounts in excess of the amount
forfeited in his DROP Account necessary to offset any actuarial impact from his recision.
The total amount due shall be determined pursuant to present law, which provides the
amount due shall be the greater of either:
(1)An amount which, on an actuarial basis, totally offsets the increase in accrued
liability of the system resulting from the purchase of the credit.
(2)The employee and employer contributions that would have been paid to the
applicable system, fund, or plan, plus interest thereon, compounded annually from
the time the contributions would have been paid, at the assumed actuarial valuation
rate of interest of the system, fund, or plan in which the credit is being purchased.
Present law relative to the calculation of such amounts, further provides that the amount
payable shall be calculated based on the actuarial funding method, assumptions, and tables
in use by the system at the time of application for credit, however, the actuary may modify
the assumptions utilized to reflect the effects of anti-selection.
Present law provides that average compensation for a member whose first employment
making him eligible for membership in the system began on or before June 30, 2006, means
the average annual earned compensation of the state employee for the 36 highest months of HLS 12RS-527 ORIGINAL
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successive employment or for the highest 36 successive joined months of employment where
interruption of service occurred.
Proposed law provides that after recision, the employe e's average compensation shall be
calculated as provided in present law.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 11:786(F))