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Regular Session, 2012
HOUSE BILL NO. 1202 (Substitute for House Bill No. 58 by Representative Pearson)
BY REPRESENTATIVE PEARSON
RETIREMENT/DISTRICT ATTY: Relative to the District Attorneys' Retirement System
AN ACT1
To amend and reenact R.S. 11:1581(5), 1612, 1614, 1617, and 1635 and to enact R.S.2
11:1588, 1632(C), (D), (E) and (F), 1633(C), 1636(C) and (D), 1638(C), 1645, and3
1646, relative to the District Attorneys' Retirement System of Louisiana; to provide4
relative to federal tax qualification status of the system; to authorize changes to be5
made using the Administrative Procedure Act; and to provide for related matters.6
Notice of intention to introduce this Act has been published7
as provided by Article X, Section 29(C) of the Constitution8
of Louisiana.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 11:1581(5), 1612, 1614, 1617, and 1635 are hereby amended and11
reenacted and R.S. 11:1588, 1632(C), (D), (E) and (F), 1633(C), 1636(C) and (D), 1638(C),12
1645, and 1646 are hereby enacted to read as follows:13
§1581. Definitions14
The following words and phrases, as used in this Chapter, unless a different15
meaning is plainly required by the context, shall have the following meanings:16
* * *17
(5)(a) "Average final compensation" shall mean the average monthly18
compensation earned by an employee during any period of thirty-six successive19
months of service as an employee during which the said earned compensation was20
the highest. The average monthly compensation shall include compensation not paid21
by the state, but only to the extent that non-state compensation for the thirteenth22
through the twenty-fourth month does not exceed one hundred ten percent of the23 HLS 12RS-2059 ORIGINAL
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total of non-state compensation for the first through twelfth month, and that non-state1
compensation for the final twelve months does not exceed one hundred ten percent2
of the total of non-state compensation for the thirteenth through the twenty-fourth3
month. Fees earned in connection with official duties shall not be included in4
average final compensation. In the event of interruption of employment, the5
thirty-six-month period shall be computed by joining employment periods6
immediately preceding and succeeding the interruption.7
(b) Compensation of a member in excess of two hundred thousand dollars,8
as adjusted for increases in the cost-of-living under 26 U.S.C. 401(a)(17)(B) for9
years beginning after January 1, 2002, shall not be taken into account. This10
limitation may be adjusted by rules promulgated by the board of trustees in11
accordance with the provisions of the Administrative Procedure Act, R.S. 49:950 et.12
seq. For purposes of compliance with the requirements for qualification under 2613
U.S.C. 401(a), the board of trustees may promulgate rules further defining14
"compensation" and "section 415 compensation" in accordance with the15
Administrative Procedure Act.16
* * *17
§1588 Amendment of provisions of retirement system 18
A. The provisions of the retirement system may be amended by action of the19
legislature in the same manner as any other statute may be amended by the20
legislature. In addition, action by the board of trustees with respect to the payment21
of cost-of living adjustments, with respect to the payment of employee contributions,22
with respect to actuarial assumptions, and with respect to other actions authorized23
in this Section shall be considered amendments to the provisions of the retirement24
system.25
B. No amendment to the retirement system shall operate to deprive any26
member of a benefit to which he is entitled. In the case of any merger or27
consolidation with or transfer of assets or liabilities to any other retirement system,28
each member in the retirement system shall, if the retirement system is then29 HLS 12RS-2059 ORIGINAL
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terminated, receive a benefit immediately after the merger, consolidation, or transfer1
which is equal to or greater than the benefit he would have been entitled to receive2
immediately before the merger, consolidation, or transfer if the retirement system3
had then terminated.4
C. Upon the termination or partial termination of the retirement system, the5
board of trustees shall reevaluate and redetermine the benefit of each member, and6
the entire benefit of each member may be paid or commence to be paid and7
distributed to such member, or if he dies before such distribution, to the beneficiary8
or beneficiaries designated by the member. However, if the member is still9
employed and the system is partially terminated, payment shall not be made until10
retirement or termination and shall be held until payment is otherwise due under the11
provisions of the retirement system. A member's right to his benefit is not12
conditioned upon a sufficiency of assets in the event of termination.13
D. Upon termination or partial termination of the retirement system, a14
member's interest in the system shall be nonforfeitable to the extent funded.15
E. The retirement system is intended to qualify under 26 U.S.C. 401(a).16
Accordingly, any amendments to the provisions of the retirement system shall be17
designed to maintain this qualification.18
* * *19
§1612. Employees of Louisiana District Attorneys' Association; prior service credit20
A. Any employee of the Louisiana District Attorneys' Association shall be21
eligible to receive prior service credit for all service rendered as such an employee22
prior to the date as of which such employees become eligible to be included in the23
membership of this system. In order to obtain such credit, any such employee, prior24
to the date of application for retirement, shall make application to the board of25
trustees for such credit and shall furnish a detailed statement of all service for which26
credit is claimed in such form as the board may require. In addition, each such27
employee shall pay into the system an amount equal to the employee and employer28
contributions which would have been made had the employee been a member during29 HLS 12RS-2059 ORIGINAL
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the period for which credit is claimed, plus five percent compound interest per1
annum thereon from date of service until paid. 2
B. The system shall accept as the member’s payment of amounts payable by3
the member under this Section any assets held in an individual retirement account4
or annuity or a plan qualified under 26 U.S.C. 401(a) or under 26 U.S.C. 403(a), a5
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g), or a6
tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).7
* * *8
§1614. Service on which retirement allowances are based 9
A. Creditable service at retirement on which the retirement allowance of a10
member shall be based shall consist of the membership service rendered by him11
since he last became a member, and, also, if he has a prior service certificate which12
is in full force and effect, the amount of service certified on his prior service13
certificate.14
B. If a member takes a leave of absence governed by the Uniformed Services15
Employment and Reemployment Rights Act (USERRA) and returns to employment16
covered by the retirement system, the member shall share in employer contributions17
in the same manner as other members and shall not be considered to have terminated18
employment or to have incurred a break in service during such leave of absence. The19
employer shall be permitted to make an employer contribution in satisfaction of the20
affected member's rights under USERRA. This Subsection does not apply to a21
member who does not return to employment covered by the retirement system.22
C. The system shall accept as the member's payment of amounts payable by23
the member under this Section the direct transfer of any assets held for the benefit24
of the member in an individual retirement account or annuity, including a Roth25
account, or in a plan qualified under 26 U.S.C. 401(a) or 403(a), or in a26
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g), or in27
a tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).28 HLS 12RS-2059 ORIGINAL
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D. If a member dies or becomes disabled on or after January 1, 2007 while1
performing qualified military service as defined in 26 U.S.C. 414(u), the member’s2
beneficiary is entitled to any additional benefits, other than benefit accruals relating3
to the period of qualified military service, provided under the system as if the4
member had resumed and then terminated employment on account of death or5
disability. Also, the system will credit the member’s qualified military service as6
service for vesting purposes as though the member had resumed employment under7
USERRA immediately prior to the member’s death or disability.8
E. If a member is receiving differential wage payments while performing9
qualified military service as defined in 26 U.S.C. 414(u), the member shall be treated10
as an employee of the employer making the payment and the differential wage11
payment will be treated as compensation pursuant to 26 U.S.C. 414(u)(12)(A).12
F. The board of trustees shall adopt procedures which shall be part of the13
governing procedures of the system that shall implement the requirements of14
USERRA and the Heroes Earnings Assistance and Relief Tax Act of 2008.15
§1617. Service credit resulting from age discrimination16
A. Any person who retired from this system and was reemployed in a17
capacity as a district attorney or assistant district attorney but was denied18
membership in this system based on provisions of law regarding age requirements19
shall have the option of establishing credit for the full-time service in that capacity20
by paying into the system the employer and employee amount plus interest that21
would have been withheld and paid into the system for such service based on the22
member's gross salary for the period of such reemployment.23
B. The system shall accept as the member’s payment of amounts payable by24
the member under this Section any assets held in an individual retirement account25
or annuity or a system qualified under 26 U.S.C. 401(a) or 26 U.S.C. 403(a), a26
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g) or a27
tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).28
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§1632. Retirement eligibility; benefits at three percent1
* * *2
C. (1) The annual benefit otherwise payable to a member under the system3
at any time shall not exceed the maximum permissible benefit. If the benefit the4
member would otherwise accrue in a limitation year would produce an annual benefit5
in excess of the maximum permissible benefit, then the benefit shall be limited or the6
rate of accrual reduced to a benefit that does not exceed the maximum permissible7
benefit.8
(2) The retirement benefit of any member that is not attributable to employee9
contributions, when expressed as an annual benefit, may not exceed two hundred10
thousand dollars per year, as adjusted for increases in the cost of living pursuant to11
26 U.S.C. 415(d). For purposes of determining whether a member's benefit exceeds12
this limitation, if the normal form of benefit is other than a single life annuity, such13
form shall be adjusted actuarially to the equivalent of a single life annuity. This14
single life annuity shall not exceed the maximum dollar limitation outlined in this15
Paragraph. No adjustment is required for qualified joint and survivor annuity16
benefits, pre-retirement disability benefits, or pre-retirement death benefits.17
(3)(a) If benefit distribution begins before the member has reached age18
sixty-two, the actual retirement benefit shall not exceed the adjusted dollar19
limitation. The adjusted dollar limitation shall be the equivalent, determined in a20
manner consistent with reduction of benefits for early retirement under the federal21
Social Security Act, of two hundred thousand dollars beginning at age sixty-two.22
(b) If the annuity starting date for the member's benefit is after he has23
reached age sixty-five, the defined benefit dollar limitation for the member’s annuity24
starting date is the annual amount of a benefit payable in the form of a straight life25
annuity commencing at the member’s annuity starting date that is the actuarial26
equivalent of the defined benefit dollar limitation adjusted for years of participation27
less than ten pursuant to Paragraph (4) of this Subsection.28 HLS 12RS-2059 ORIGINAL
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(c) The interest rate used for adjusting the maximum limitations above shall1
be:2
(i) For benefits commencing before the member has reached age sixty-two3
and for forms of benefit other than straight life annuity, the member's benefit shall4
be computed using an interest rate of five percent and the mortality table or other5
tabular factor used for actuarial equivalence for early retirement benefits under the6
system, expressing the member's age based on completed calendar months, as of the7
annuity starting date.8
(ii) For benefits commencing after the member has reached age sixty-five,9
the member’s benefit shall be computed using an interest rate of five percent and the10
mortality table or other tabular factor used for actuarial equivalence for11
postretirement benefits under the system, expressing the member's age based on12
completed calendar months, as of the annuity starting date.13
(iii) Notwithstanding the other requirements of this Subsection, no14
adjustment shall be made to the defined benefit dollar limitation to reflect the15
probability of a member's death between the annuity starting date and age sixty-two,16
or between age sixty-five and the annuity starting date, as applicable, if benefits are17
not forfeited upon the death of the member prior to the annuity starting date.18
(4) If retirement benefits are payable under this system to a member who has19
less than ten years of participation in the system, the dollar limitation referred to in20
Paragraph (1) of this Subsection shall be multiplied by a fraction, not in excess of21
one, the numerator of which is the member's number of years of participation in the22
system and the denominator of which is ten.23
(5) The two hundred thousand dollar limitation provided in this Subsection24
shall be adjusted annually to the maximum dollar limits allowable as determined by25
the commissioner of the Internal Revenue Service under 26 U.S.C. 415(d).26
(6) If a member is a also a member in another defined benefit pension plan27
maintained by the state or one of its political subdivisions, his benefit, considered in28 HLS 12RS-2059 ORIGINAL
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the aggregate after taking into account the benefits provided by all such retirement1
plans, shall not exceed the limits provided in this Subsection.2
(7) That portion of the benefit that is attributable to member contributions3
shall be determined in accordance with Treasury Regulations § 1.415(b)-1(b)(2)(iii).4
(8) Notwithstanding the provisions of this Subsection, the benefits payable5
with respect to a participant under any defined benefit plan shall be deemed not to6
exceed the limitations of Subsection E of this Section if both of the following apply:7
(a) The retirement benefits payable with respect to such participant under8
such plan and under all other defined benefit plans of the employer do not exceed ten9
thousand dollars for the plan year, or for any prior plan year.10
(b) The employer has not at any time maintained a defined contribution plan11
in which the participant participated.12
D.(1) For purposes of this Section and R.S. 11:1633 and 1634, average13
compensation shall include any amounts properly considered as regular rate of pay14
of the member, as defined in R.S. 11:231, and unreduced by amounts excluded from15
income for federal income tax purposes by reason of 26 U.S.C. 125, 132(f),16
402(e)(3), 402(h)(1)(B), 403(b), 414(h), or 457 or any other provision of federal law17
of similar effect.18
(2) For years beginning on or after January 1, 2002, the annual compensation19
limitation shall not exceed two hundred thousand dollars, as adjusted for20
cost-of-living increases under 26 U.S.C. 401(a)(17)(B). If compensation for an21
earlier period is taken into account in determining an employee's benefits accruing22
in the current plan year, the compensation for the earlier period shall be subject to23
the compensation limit for the current year24
E.(1) The provisions of this Section shall apply if any member is covered or25
has ever been covered by another plan maintained by the employer, including a26
qualified plan, a welfare benefit fund as defined in 26 U.S.C. 419(e), or an individual27
medical account as defined in 26 U.S.C. 415(l)(2) that provides an annual addition28
as described in Paragraph (4) of this Subsection.29 HLS 12RS-2059 ORIGINAL
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(2) If a member is or has ever been covered under more than one defined1
benefit plan maintained by the employer, the sum of the member's annual benefits2
from all such plans shall not exceed the maximum permissible benefit set forth in3
Subsection C of this Section.4
(3) If the employer maintains or at any time maintained one or more5
qualified defined contribution plans covering any member in this system, a welfare6
benefit fund as defined in 26 U.S.C. 419(e), or an individual medical account as7
defined in 26 U.S.C. 415(l)(2), the member's annual additions for any year shall not8
exceed the maximum permissible amount, which is forty thousand dollars adjusted9
for increases in the cost-of-living pursuant to 26 U.S.C. 415(d).10
(4) "Annual additions" of a member for the year shall mean the sum of the11
following amounts credited to a member's account for the year:12
(a) Employer contributions.13
(b) Employee contributions.14
(c) Forfeitures.15
(d) Amounts allocated to an individual medical account as defined in 2616
U.S.C. 415(l)(2) that is a part of a pension or annuity plan maintained by the17
employer are treated as annual additions to a defined contribution plan.18
Additionally, amounts derived from contributions paid or accrued in taxable years19
ending after December 31, 1985, which are attributable to post-retirement medical20
benefits allocated to the separated account of a key employee as defined in 26 U.S.C.21
419A(d)(d) or under a welfare benefit fund as defined in 26 U.S.C. 419(e)22
maintained by the employer are treated as annual additions to a defined contribution23
plan.24
(e) The employee contribution shall be deemed to be a defined contribution25
plan. If a member has made employee contributions pursuant to the provisions of26
this retirement system, the amount of such contributions shall be treated as an annual27
addition to a qualified defined contribution plan for purposes of this Section.28 HLS 12RS-2059 ORIGINAL
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(5) The amount of annual additions that may be credited to the member's1
account for any limitation year shall not exceed the maximum permissible amount.2
Contributions and benefits under any other plan of the employer, to the extent that3
an adjustment is required to satisfy the requirements of this Section in the aggregate,4
shall be limited or reduced to the extent necessary to satisfy such requirements5
without reducing accrued benefits; however, only after such other plans have been6
modified shall the benefits and contributions under this plan be reduced. As soon as7
it is administratively feasible after the end of the limitation year, the maximum8
permissible amount for the limitation year shall be determined on the basis of the9
member's actual compensation for the limitation year. If there is an excess amount,10
the excess shall be disposed of as follows:11
(a) Any non-deductible voluntary employee contribution to the extent it12
would reduce the excess amount shall be returned to the member.13
(b) If after the application of Subparagraph (a) of this Paragraph an excess14
amount still exists, then any non-deductible mandatory contribution to the extent it15
would reduce the excess amount shall be returned to the member.16
(c) If after the application of Subparagraph (b) of this Paragraph an excess17
amount still exists and the member is covered by the plan at the end of the limitation18
year, the excess amount in the member's account shall be used to reduce employer19
contributions, including any allocation of forfeitures, for such member in the next20
limitation year if necessary.21
(d) If after the application of Subparagraph (c) of this Paragraph an excess22
amount still exists and the member is not covered by the plan at the end of the23
limitation year, the excess amount shall be held unallocated in a suspense account.24
The suspense account shall be applied to reduce the future employer contributions25
for all remaining members in the next limitation year and each succeeding limitation26
year if necessary.27
(e) If a suspense account is in existence at any time during a limitation year28
pursuant to the provisions of this Section, it shall not participate in the allocation of29 HLS 12RS-2059 ORIGINAL
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the trust's investment gains and losses. If a suspense account is in existence at any1
time during a particular limitation year, all amounts in the suspense account shall be2
allocated and reallocated to members' accounts before any employer or any3
employee contributions may be made to the plan for that limitation year. Excess4
amounts shall not be distributed to members or former members.5
(6) "Excess Amounts" of a member for a limitation year shall mean the6
excess of the member's annual additions for the limitation year over the maximum7
permissible amount.8
(7) The "limitation year" shall be the calendar year or the twelve consecutive9
month period determined by the board of trustees.10
(8)(a) The "maximum permissible amount" for a member for a limitation11
year shall be the maximum annual addition that may be contributed or allocated to12
a member's account under the plan for any limitation year and shall not exceed the13
lesser of:14
(i) Forty thousand dollars, as adjusted after 2001 for changes in the cost of15
living in accordance with 26 U.S.C. 415(d).16
(ii) One hundred percent of the member's compensation for the limitation17
year.18
(b) The compensation limitation provided for in Item (a)(ii) of this Paragraph19
shall not apply to any contribution for medical benefits within the meaning of 2620
U.S.C. 401(h) or 419A(f)(2) that is otherwise treated as an annual addition pursuant21
to 26 U.S.C. 415(l) or 419A(d)(2).22
F. The board of trustees may adopt provisions of the system that will carry23
out the requirements of Subsections C, D, and E of this Section, and the board of24
trustees may adopt provisions as required for the system to maintain its qualified25
status under 26 U.S.C. 401(a).26
§1633. Retirement eligibility; benefits at three and one-half percent27
* * *28
C. The limitations of R.S. 11:1632(C) and (E) shall apply to this Section.29 HLS 12RS-2059 ORIGINAL
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* * *1
§1635. Return of accumulated contributions 2
A. Should a member cease to be an employee except by death or retirement3
under the provisions of this Chapter, he shall be paid such part of the amount of the4
accumulated contributions standing to the credit of his individual account in the5
annuity savings fund as he shall demand. Should a member die before retirement the6
amount of his accumulated contributions standing to the credit of his individual7
account shall be paid to his estate or to such person as he shall have nominated by8
written designation, duly executed and filed with the board of trustees, unless9
benefits are payable under R.S. 11:1636.10
B. Notwithstanding any other provision of law of the contrary that would11
otherwise limit a member's election under this Section, a distributee may elect, at the12
time and in the manner prescribed by the plan administrator, to have any portion of13
an eligible rollover distribution paid directly to an eligible retirement plan specified14
by the distributee in a direct rollover.15
C. If a distribution is one to which 26 U.S.C. 401(a)(11) and 417 do not16
apply, the distribution may commence fewer than thirty days after the notice required17
under 26 U.S.C. 1.411(a)-11(c) is given, if both of the following apply:18
(1) The plan administrator clearly informs the participant that the participant19
has a right to a period of at least thirty days after receiving the notice to consider the20
decision of whether or not to elect a distribution and, if applicable, a particular21
distribution option.22
(2) The participant, after receiving the notice, affirmatively elects a23
distribution.24
D. As used in this Section, the following terms shall mean the following:25
(1) "Direct rollover" means a payment by the plan to the eligible retirement26
plan specified by the distributee.27
(2) "Distributee" means a member or former member. In addition, the28
member's or former member's surviving spouse, or the member's spouse or former29 HLS 12RS-2059 ORIGINAL
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member's spouse with whom a benefit or return of employee contributions is to be1
divided pursuant to R.S. 11:291(B) are distributees with reference to an interest of2
the member or former spouse.3
(3) "Eligible retirement plan" means an individual retirement account4
described in 26 U.S.C. 408(a), an individual retirement annuity described in 265
U.S.C. 408(b), an annuity plan described in 26 U.S.C. 403(a), or a qualified trust6
described in 26 U.S.C. 401(a), 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 26 U.S.C. 403(b) and an eligible plan under 26 U.S.C. 457(b) that is11
maintained by the state or any political subdivision or instrumentality thereof12
agreeing to account separately for amounts transferred into such plan from this fund.13
A distribution to a surviving spouse or to a spouse or former spouse who is the14
alternate payee under a qualified domestic relations order shall not make the15
retirement plan ineligible.16
(4) "Eligible rollover distribution" means any distribution of all or any17
portion of the balance to the credit of the distribution, except that an eligible rollover18
distribution does not include any distribution that is one of a series of substantially19
equal periodic payments, not less frequently than annually, made for the life or life20
expectancy of the distributee or the joint lives or joint life expectancies of the21
distributee and the distributee's designated beneficiary, or for a specified period of22
ten years or more; any distribution to the extent such distribution is required under23
26 U.S.C. 401(a)(9); and the portion of any distribution that is not includable in gross24
income, determined without regard to the exclusion for net unrealized appreciation25
with respect to employer securities. A portion of a distribution shall not fail to be an26
eligible rollover distribution merely because the portion consists of after-tax27
employee contributions which are not includable in gross income; however, such28
portion may be paid only to an individual retirement account or annuity described29 HLS 12RS-2059 ORIGINAL
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in 26 U.S.C. 408(a) or (b), or to a qualified defined contribution plan described in 261
U.S.C. 401(a) or 403(a) that agrees to account separately for amounts so transferred,2
including accounting separately for the portion of such distribution which is3
includable in gross income and the portion of such distribution which is not4
includable. The fund shall accept participant rollover contributions, direct rollovers5
of distributions made after December 31, 2011, or both, from the following types of6
plans: individual retirement accounts or annuities or plans qualified under 26 U.S.C.7
401(a) or 403(a), or governmental deferred compensation arrangements subject to8
26 U.S.C. 457(b) or tax sheltered annuities or other arrangements under 26 U.S.C.9
403(b), beginning on the effective date specified; but only for the purposes of10
repaying prior distributions or purchasing service credits permitted under 26 U.S.C.11
415(k)(3) and 415(n).12
E. The board of trustees may adopt provisions of the system that carry out13
the requirements of Subsections B, C, and D of this Section, and the board of trustees14
may adopt provisions as required to maintain the qualified status of the system under15
26 U.S.C. § 401(a).16
§1636. Survivors' benefits 17
* * *18
C.(1) If a survivor benefit is payable to a specified person or persons or if a19
benefit is payable at death under an option elected pursuant to R.S. 11:1637, the20
member shall be considered to have designated such person as a designated21
beneficiary hereunder. If there is more than one such person, then the oldest such22
person shall be considered to have been so designated, or, if none, the oldest person23
entitled to receive a survivor benefit shall be considered to have been so designated.24
The designation of a designated beneficiary hereunder shall not prevent payment to25
multiple beneficiaries but shall only establish the permitted period of payments.26
(2) Distributions from the retirement system shall be made in accordance27
with the requirements set forth in 26 U.S.C. 401(a)(9), including the minimum28
distribution incidental benefit rules applicable thereunder.29 HLS 12RS-2059 ORIGINAL
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(3) A member's benefits shall be made or shall commence to be paid on or1
before the required beginning date.2
(4) The required beginning date shall be April first of the calendar year3
following the later of the calendar year in which the member attains seventy and4
one-half years of age, or the calendar year in which the employee retires.5
D. The board of trustees may adopt provisions of the system that will carry6
out the requirements of Subsection C of this Section, and the board of trustees may7
adopt provisions as required to maintain the qualified status of the system under 268
U.S.C.§ 401(a).9
* * *10
§1638. Cost-of-living increase of benefits11
* * *12
C. No increase in benefits pursuant to Subsection A of this Section shall13
apply if the resulting benefit would exceed the limitations of R.S. 11:1632(C).14
* * *15
§1645. Excess benefit arrangement16
A. A separate, nonqualified, unfunded excess benefit arrangement is hereby17
created outside the trust fund of the retirement system. This excess benefit18
arrangement shall be administered as a governmental excess benefit arrangement19
under 26 U.S.C. 415(m). The purpose of the excess benefit arrangement is to pay20
to retirees of the retirement system benefits otherwise payable by the retirement21
system that exceed the limitations on benefits imposed by 26 U.S.C. 415(b)(1)(A).22
B. The board of trustees shall be responsible for the administration of the23
arrangement provided for in this Section. Except as otherwise provided by this24
Section, the board has the same rights, duties, and responsibilities concerning the25
excess benefit arrangement as it has to the trust fund and may adopt rules and26
regulations necessary to administer this arrangement in accordance with the27
Administrative Procedure Act and in compliance with 26 U.S.C. 415(m).28 HLS 12RS-2059 ORIGINAL
HB NO. 1202
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
C. Benefits under this Section are exempt from execution to the same extent1
as provided by R.S. 11:1583, subject to the exceptions in R.S. 11:291 and 292, and2
the benefits are completely unassignable. Contributions to this arrangement are not3
held in trust and may not be commingled with other funds of the retirement system.4
D. A retiree is entitled to a monthly benefit under this Section in an amount5
equal to the amount by which the benefit otherwise payable by the retirement system6
has been reduced by the limitation on benefits imposed by 26 U.S.C. 415(b)(1)(A).7
The benefit payable by this arrangement is payable at the time and in the form that8
the benefit payable under the trust fund is paid.9
E. The benefit payable under this Section shall be paid from contributions10
that otherwise would be made to the trust fund under this Chapter. In lieu of deposit11
in the trust account, an amount determined by the retirement system to be necessary12
to pay benefits under this Section shall be paid monthly to the credit of a separately13
dedicated account maintained only for the excess benefit arrangement. The account14
may include amounts needed to pay reasonable and necessary expenses of15
administering this arrangement. The monthly amounts to be paid to the credit of the16
account shall be transferred to the account prior to the date of a monthly17
disbursement under this Section. No assets of the trust system shall be used to18
provide such benefits.19
F. The board may amend, terminate, or reestablish the arrangement at any20
time. Such amendment or termination may be retroactive to the extent that the board21
deems such action necessary to maintain the tax qualified status of the pension plan22
or the status of this arrangement as an excess benefit arrangement or to avoid23
jeopardizing the funded status of the pension plan. In addition, the arrangement may24
be amended or terminated to eliminate all benefits with respect to any member or25
other person who has not become eligible to participate in an excess benefit plan26
arrangement as of the date of such amendment or termination.27
§1646. Reversion of funds prohibited28 HLS 12RS-2059 ORIGINAL
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are additions.
A. Plan assets shall not be used for, or diverted to, any person or purpose1
other than for the exclusive benefit of the members and their beneficiaries, except2
that contributions made by the employer may be returned to the employer if the3
contribution was made due to a mistake of fact and the contribution is returned4
within one year of the mistaken payment of the contribution.5
B. The amount of any contribution returned shall not exceed the difference6
between the amount actually contributed and the amount which would have been7
contributed had there been no mistake of fact and shall not include the earnings8
attributable to such contribution. The amount of the contribution returned shall be9
reduced by any losses attributable to the contribution, and no member shall have his10
benefit reduced by the return of the contribution to less than such benefit would have11
been had the contribution not been returned.12
C. Notwithstanding the provisions of Subsections A and B of this Section,13
if the retirement system is terminated and all obligations under the retirement system14
are fully funded and provided for, any excess funds held by the system shall be15
returned to the employer.16
Section 2. This Act shall become effective on January 1, 2013.17
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)]
Pearson HB No. 1202
Abstract: Relative to the District Attorneys' Retirement System (DARS): provides relative
federal tax qualification status of the system.
Proposed law provides for compliance by DARS with applicable federal tax qualification
requirements of the Internal Revenue Code and federal regulations as follows:
Present law provides for the calculation of the average final compensation of a member
which is used to calculate his retirement benefit.
Proposed law provides that average final compensation shall not take into account
compensation in excess of $200,000, but provides that this cap is subject to cost-of-living
adjustments in accordance with federal law.
Present law provides for purchase of service credit under specified circumstances. HLS 12RS-2059 ORIGINAL
HB NO. 1202
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are additions.
Proposed law requires the system to accept as payment for such service credit funds from
various federally qualified retirement and annuity accounts and governmental deferred
compensation arrangements.
Present law provides that a retirement benefit is based on the member's years of service.
Proposed law provides that if a member takes a leave of absence for certain military service
and returns to employment, he shall share in employer contributions made during his
military service and shall be allowed to make the employee contributions that he would have
made during that time. Requires the system to accept direct transfers from specified
federally qualified accounts or arrangements in satisfaction of the member's payment.
Further provides that if a member dies or becomes disabled on or after Jan. 1, 2007 while
performing qualified military service, the member's beneficiary is entitled to any additional
benefits, other than benefit accruals relating to the period of qualified military service,
provided under the system as if the member had resumed and then terminated employment
on account of death or disability. Requires the system to credit the member's qualified
military service as service for vesting purposes.
Proposed law provides that the maximum benefit a retiree may receive that is not attributable
to employee contributions is $200,000 as adjusted for cost of living increases in accordance
with federal law and adjusted annually to the maximum dollar limits allowable as
determined by the commissioner of the Internal Revenue Service. Requires this maximum
amount also be adjusted in accordance with the Social Security Act if the member begins
receiving a benefit before age 62. If the annuity starting date for the member's benefit is
after he has reached age 65, the limitation is the annual amount of a benefit payable in the
form of a straight life annuity commencing at the member's annuity starting date that is the
actuarial equivalent of the defined benefit dollar limitation adjusted for years of participation
less than 10. Proposed law requires the board of trustees of the system to administer a
separate, nonqualified, unfunded excess benefit arrangement from which retirees may be
paid benefits in excess of the limitation provided by proposed law.
Proposed law further provides for calculation of aggregate contribution and benefit limits
for members also covered by other plans maintained by the employer.
Present law provides that if a member ceases to be an employee except by death or
retirement, he shall be paid the accumulated contributions that have been credited to him.
If a member dies before retirement, his accumulated contributions shall be paid to his estate
or to his designee.
Proposed law requires that the member or other recipient of such funds be allowed to have
the funds distributed as a direct rollover to a qualified retirement plan.
Present law provides for payment of survivor benefits upon the death of an active
contributing member with at least five years of service or any member with at least 23 years
of service who has not retired Proposed law requires such distributions to survivors be made
in accordance with federal law.
Effective January 1, 2013.
(Amends R.S. 11:1581(5), 1612, 1614, 1617, and 1635; Adds R.S. 11:1588, 1632(C), (D),
(E), and (F), 1633(C), 1636(C) and (D), 1638(C), 1645, and 1646)