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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, 1631(F)(1), and 1635 and to enact2
R.S. 11:1588, 1631(G), 1632(C), (D), (E), and (F), 1633(C), 1636(C) and (D),3
1638(C), 1645, and 1646, relative to the District Attorneys' Retirement System of4
Louisiana; to provide relative to federal tax qualification status of the system; to5
authorize changes to be made using the Administrative Procedure Act; and to6
provide for related matters.7
Notice of intention to introduce this Act has been published8
as provided by Article X, Section 29(C) of the Constitution9
of Louisiana.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 11:1581(5), 1612, 1614, 1617, 1631(F)(1), and 1635 are hereby12
amended and reenacted and R.S. 11:1588, 1631(G), 1632(C), (D), (E), and (F), 1633(C),13
1636(C) and (D), 1638(C), 1645, and 1646 are hereby enacted to read as follows:14
§1581. Definitions15
The following words and phrases, as used in this Chapter, unless a different16
meaning is plainly required by the context, shall have the following meanings:17
* * *18
(5)(a) "Average final compensation" shall mean the average monthly19
compensation earned by an employee during any period of thirty-six successive20
months of service as an employee during which the said earned compensation was21
the highest. The average monthly compensation shall include compensation not paid22
by the state, but only to the extent that non-state compensation for the thirteenth23 HLS 12RS-2059 REENGROSSED
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through the twenty-fourth month does not exceed one hundred ten percent of the1
total of non-state compensation for the first through twelfth month, and that non-state2
compensation for the final twelve months does not exceed one hundred ten percent3
of the total of non-state compensation for the thirteenth through the twenty-fourth4
month. Fees earned in connection with official duties shall not be included in5
average final compensation. In the event of interruption of employment, the6
thirty-six-month period shall be computed by joining employment periods7
immediately preceding and succeeding the interruption.8
(b) Compensation of a member in excess of two hundred thousand dollars,9
as adjusted for increases in the cost-of-living under 26 U.S.C. 401(a)(17)(B) for10
years beginning after January 1, 2002, shall not be taken into account. This11
limitation may be adjusted by rules promulgated by the board of trustees in12
accordance with the provisions of the Administrative Procedure Act, R.S. 49:950 et13
seq. For purposes of compliance with the requirements for qualification under 2614
U.S.C. 401(a), the board of trustees may promulgate rules further defining15
"compensation" and "section 415 compensation" in accordance with the16
Administrative Procedure Act.17
* * *18
§1588. Amendment of provisions of retirement system 19
A. The provisions of the retirement system may be amended by action of the20
legislature in the same manner as any other statute may be amended by the21
legislature. In addition, action by the board of trustees with respect to the payment22
of cost-of living adjustments, with respect to the payment of employee contributions,23
with respect to actuarial assumptions, and with respect to other actions authorized24
in this Chapter shall be considered amendments to the provisions of the retirement25
system.26
B. No amendment to the retirement system shall operate to deprive any27
member of a benefit to which he is entitled. In the case of any merger or28
consolidation with or transfer of assets or liabilities to any other retirement system,29 HLS 12RS-2059 REENGROSSED
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each member in the retirement system shall, if the retirement system is then1
terminated, receive a benefit immediately after the merger, consolidation, or transfer2
which is equal to or greater than the benefit he would have been entitled to receive3
immediately before the merger, consolidation, or transfer if the retirement system4
had then terminated.5
C. Upon the termination or partial termination of the retirement system, the6
board of trustees shall reevaluate and redetermine the benefit of each member, and7
the entire benefit of each member may be paid or commence to be paid and8
distributed to such member, or if he dies before such distribution, to the beneficiary9
or beneficiaries designated by the member. However, if the member is still10
employed and the system is partially terminated, payment shall not be made until11
retirement or termination and shall be held until payment is otherwise due under the12
provisions of the retirement system. A member's right to his benefit is not13
conditioned upon a sufficiency of assets in the event of termination.14
D. Upon termination or partial termination of the retirement system, a15
member's interest in the system shall be nonforfeitable to the extent funded.16
E. The retirement system is intended to qualify under 26 U.S.C. 401(a).17
Accordingly, any amendments to the provisions of the retirement system shall be18
designed to maintain this qualification.19
* * *20
§1612. Employees of Louisiana District Attorneys' Association; prior service credit21
A. Any employee of the Louisiana District Attorneys' Association shall be22
eligible to receive prior service credit for all service rendered as such an employee23
prior to the date as of which such employees become eligible to be included in the24
membership of this system. In order to obtain such credit, any such employee, prior25
to the date of application for retirement, shall make application to the board of26
trustees for such credit and shall furnish a detailed statement of all service for which27
credit is claimed in such form as the board may require. In addition, each such28
employee shall pay into the system an amount equal to the employee and employer29 HLS 12RS-2059 REENGROSSED
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contributions which would have been made had the employee been a member during1
the period for which credit is claimed, plus five percent compound interest per2
annum thereon from date of service until paid. 3
B. The system shall accept as the member's payment of amounts payable by4
the member under this Section any assets held in an individual retirement account5
or annuity or a plan qualified under 26 U.S.C. 401(a) or under 26 U.S.C. 403(a), a6
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g), or a7
tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).8
* * *9
§1614. Service on which retirement allowances are based 10
A. Creditable service at retirement on which the retirement allowance of a11
member shall be based shall consist of the membership service rendered by him12
since he last became a member, and, also, if he has a prior service certificate which13
is in full force and effect, the amount of service certified on his prior service14
certificate.15
B. If a member takes a leave of absence governed by the Uniformed Services16
Employment and Reemployment Rights Act (USERRA), such member shall be17
credited with service as provided under R.S. 11:153, provided that the member18
makes employee contributions attributable to such service.19
C. The system shall accept as the member's payment of amounts payable by20
the member under this Section the direct transfer of any assets held for the benefit21
of the member in an individual retirement account or annuity, including a Roth22
account, or in a plan qualified under 26 U.S.C. 401(a) or 403(a), or in a23
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g), or in24
a tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).25
D. If a member dies or becomes disabled on or after January 1, 2007, while26
performing qualified military service as defined in 26 U.S.C. 414(u), the member's27
beneficiary is entitled to any additional benefits, other than benefit accruals relating28
to the period of qualified military service, provided under the system as if the29 HLS 12RS-2059 REENGROSSED
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member had resumed and then terminated employment on account of death or1
disability. Also, the system will credit the member's qualified military service as2
service for vesting purposes as though the member had resumed employment under3
USERRA immediately prior to the member's death or disability.4
E. If a member is receiving differential wage payments while performing5
qualified military service as defined in 26 U.S.C. 414(u), the member shall be treated6
as an employee of the employer making the payment and the differential wage7
payment will be treated as compensation pursuant to 26 U.S.C. 414(u)(12)(A).8
F. The board of trustees shall adopt procedures which shall be part of the9
governing procedures of the system that shall implement the requirements of10
USERRA and the Heroes Earnings Assistance and Relief Tax Act of 2008.11
§1617. Service credit resulting from age discrimination12
A. Any person who retired from this system and was reemployed in a13
capacity as a district attorney or assistant district attorney but was denied14
membership in this system based on provisions of law regarding age requirements15
shall have the option of establishing credit for the full-time service in that capacity16
by paying into the system the employer and employee amount plus interest that17
would have been withheld and paid into the system for such service based on the18
member's gross salary for the period of such reemployment.19
B. The system shall accept as the member's payment of amounts payable by20
the member under this Section any assets held in an individual retirement account21
or annuity or a system qualified under 26 U.S.C. 401(a) or 26 U.S.C. 403(a), a22
governmental deferred compensation arrangement subject to 26 U.S.C. 457(g) or a23
tax sheltered annuity or other arrangement under 26 U.S.C. 403(b).24
§1631. Retirement benefits; application; eligibility requirements25
* * *26
F.(1) Except as provided in Paragraph (2) of this Subsection, if any member27
who has retired from this system is reemployed as an employee by any district28
attorney in the state, his retirement benefit shall be suspended during said29 HLS 12RS-2059 REENGROSSED
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employment, and he shall not be paid any benefits for the period covered by such1
employment. He shall, upon such reemployment, again become an active2
contributing member of the system, with the option of establishing service credit for3
any period of full-time employment as district attorney or assistant district attorney4
since returning to such employment following retirement by payment into the system5
the employer and employee amount plus interest that would have been withheld and6
paid into the system for that period based upon his total salary for such period. He7
shall accrue a supplemental retirement benefit based on his service rendered after8
reemployment. If the member continues employment after retirement for a period9
of less than thirty-six sixty months, his supplemental monthly retirement benefit10
shall equal the benefit accrued under R.S. 11:1632 or 1633, whichever is applicable,11
based on the lesser of his average final compensation at his original retirement date12
or his average compensation during the period of his subsequent reemployment. If13
the member continues in employment after retirement for a period of thirty-six sixty14
months or more, his supplemental monthly retirement benefit shall equal the benefit15
accrued under R.S. 11:1632 or 1633, whichever is applicable, based on his average16
final compensation during his period of reemployment. Upon retirement subsequent17
to reemployment, his benefit shall be equal to the benefits he was receiving18
immediately prior to reemployment plus the supplemental benefit earned during his19
reemployment.20
* * *21
G. Forfeitures resulting from a termination of employment or a withdrawal22
of a member's own contributions may not be used to increase benefits to remaining23
members.24
§1632. Retirement eligibility; benefits at three percent25
* * *26
C.(1) The annual benefit otherwise payable to a member under the system27
at any time shall not exceed the maximum permissible benefit. If the benefit the28
member would otherwise accrue in a limitation year would produce an annual benefit29 HLS 12RS-2059 REENGROSSED
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in excess of the maximum permissible benefit, then the benefit shall be limited or the1
rate of accrual reduced to a benefit that does not exceed the maximum permissible2
benefit.3
(2) The retirement benefit of any member that is not attributable to employee4
contributions, when expressed as an annual benefit, may not exceed two hundred5
thousand dollars per year, as adjusted for increases in the cost of living pursuant to6
26 U.S.C. 415(d). For purposes of determining whether a member's benefit exceeds7
this limitation, if the normal form of benefit is other than a single life annuity, such8
form shall be adjusted actuarially to the equivalent of a single life annuity. This9
single life annuity shall not exceed the maximum dollar limitation outlined in this10
Paragraph. No adjustment is required for qualified joint and survivor annuity11
benefits, preretirement disability benefits, or preretirement death benefits.12
(3)(a) If benefit distribution begins before the member has reached age13
sixty-two, the actual retirement benefit shall not exceed the adjusted dollar14
limitation. The adjusted dollar limitation shall be the equivalent of two hundred15
thousand dollars beginning at age sixty-two.16
(b) If the annuity starting date for the member's benefit is after he has17
reached age sixty-five, the defined benefit dollar limitation for the member's annuity18
starting date is the annual amount of a benefit payable in the form of a straight life19
annuity commencing at the member's annuity starting date that is the actuarial20
equivalent of the defined benefit dollar limitation adjusted for years of participation21
less than ten pursuant to Paragraph (4) of this Subsection.22
(c) The interest rate and mortality table used for adjusting the maximum23
limitations above shall be:24
(i) For benefits commencing before the member has reached age sixty-two25
and for forms of benefit other than straight life annuity, the member's benefit shall26
be the lesser of the benefit computed using an interest rate of five percent and the27
applicable mortality table and the benefit computed using the defined benefit dollar28
limit at age sixty-two, multiplied by the ratio of the annual amount of the29 HLS 12RS-2059 REENGROSSED
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immediately commencing straight life annuity to the annual amount of the straight1
life annuity commencing at age sixty-two, with both amounts determined without the2
limitations of this Section.3
(ii) For benefits commencing after the member has reached age sixty-five,4
the member's benefit shall be the lesser of the benefit computed using an interest rate5
of five percent and the applicable mortality table and the benefit computed using the6
defined benefit dollar limit at age sixty-five, multiplied by the ratio of the annual7
amount of the immediately commencing straight life annuity to the annual amount8
of the straight life annuity commencing at age sixty-five, with both amounts9
determined without the limitations of this Section.10
(iii) Notwithstanding the other requirements of this Subsection, no11
adjustment shall be made to the defined benefit dollar limitation to reflect the12
probability of a member's death between the annuity starting date and age sixty-two,13
or between age sixty-five and the annuity starting date, as applicable, if benefits are14
not forfeited upon the death of the member prior to the annuity starting date.15
(4) If retirement benefits are payable under this system to a member who has16
less than ten years of participation in the system, the dollar limitation referred to in17
Paragraph (2) of this Subsection shall be multiplied by a fraction, not in excess of18
one, the numerator of which is the member's number of years of participation in the19
system and the denominator of which is ten.20
(5) The two hundred thousand dollar limitation provided in this Subsection21
shall be adjusted annually to the maximum dollar limits allowable as determined by22
the commissioner of the Internal Revenue Service under 26 U.S.C. 415(d).23
(6) If a member is a also a member in another defined benefit pension plan24
maintained by the state or one of its political subdivisions, his benefit, considered in25
the aggregate after taking into account the benefits provided by all such retirement26
plans, shall not exceed the limits provided in this Subsection.27
(7) That portion of the benefit that is attributable to member contributions28
shall be determined in accordance with Treasury Regulations §1.415(b)-1(b)(2)(iii).29 HLS 12RS-2059 REENGROSSED
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(8) Notwithstanding the provisions of this Subsection, the benefits payable1
with respect to a participant under any defined benefit plan shall be deemed not to2
exceed the limitations of Subsection E of this Section if both of the following apply:3
(a) The retirement benefits payable with respect to such participant under4
such plan and under all other defined benefit plans of the employer do not exceed ten5
thousand dollars for the plan year, or for any prior plan year.6
(b) The employer has not at any time maintained a defined contribution plan7
in which the participant participated.8
D.(1) For purposes of this Section and R.S. 11:1633 and 1634, average9
compensation shall include any amounts properly considered as regular rate of pay10
of the member, as defined in R.S. 11:231, and unreduced by amounts excluded from11
income for federal income tax purposes by reason of 26 U.S.C. 125, 132(f),12
402(e)(3), 402(h)(1)(B), 403(b), 414(h), or 457 or any other provision of federal law13
of similar effect.14
(2) For years beginning on or after January 1, 2002, the annual compensation15
limitation shall not exceed two hundred thousand dollars, as adjusted for16
cost-of-living increases under 26 U.S.C. 401(a)(17)(B). If compensation for an17
earlier period is taken into account in determining an employee's benefits accruing18
in the current plan year, the compensation for the earlier period shall be subject to19
the compensation limit for the current year.20
E.(1) The provisions of this Section shall apply if any member is covered or21
has ever been covered by another plan maintained by the employer, including a22
qualified plan, a welfare benefit fund as defined in 26 U.S.C. 419(e), or an individual23
medical account as defined in 26 U.S.C. 415(l)(2) that provides an annual addition24
as described in Paragraph (4) of this Subsection.25
(2) If a member is or has ever been covered under more than one defined26
benefit plan maintained by the employer, the sum of the member's annual benefits27
from all such plans shall not exceed the maximum permissible benefit set forth in28
Subsection C of this Section.29 HLS 12RS-2059 REENGROSSED
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(3) If the employer maintains or at any time maintained one or more1
qualified defined contribution plans covering any member in this system, a welfare2
benefit fund as defined in 26 U.S.C. 419(e), or an individual medical account as3
defined in 26 U.S.C. 415(l)(2), the member's annual additions for any year shall not4
exceed the maximum permissible amount, which is forty thousand dollars adjusted5
for increases in the cost of living pursuant to 26 U.S.C. 415(d).6
(4) "Annual additions" of a member for the year shall mean the sum of the7
following amounts credited to a member's account for the year:8
(a) Employer contributions.9
(b) Employee contributions.10
(c) Forfeitures.11
(d) Amounts allocated to an individual medical account as defined in 2612
U.S.C. 415(l)(2) that is a part of a pension or annuity plan maintained by the13
employer are treated as annual additions to a defined contribution plan.14
Additionally, amounts derived from contributions paid or accrued in taxable years15
ending after December 31, 1985, which are attributable to postretirement medical16
benefits allocated to the separated account of a key employee as defined in 26 U.S.C.17
419A(d)(3) or under a welfare benefit fund as defined in 26 U.S.C. 419(e)18
maintained by the employer are treated as annual additions to a defined contribution19
plan.20
(e) The employee contribution shall be deemed to be a defined contribution21
plan. If a member has made employee contributions pursuant to the provisions of22
this retirement system, the amount of such contributions shall be treated as an annual23
addition to a qualified defined contribution plan for purposes of this Section.24
(5) The amount of annual additions that may be credited to the member's25
account for any limitation year shall not exceed the maximum permissible amount.26
Contributions and benefits under any other plan of the employer, to the extent that27
an adjustment is required to satisfy the requirements of this Section in the aggregate,28
shall be limited or reduced to the extent necessary to satisfy such requirements29 HLS 12RS-2059 REENGROSSED
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without reducing accrued benefits; however, only after such other plans have been1
modified shall the benefits and contributions under this plan be reduced. As soon as2
it is administratively feasible after the end of the limitation year, the maximum3
permissible amount for the limitation year shall be determined on the basis of the4
member's actual compensation for the limitation year. If there is an excess amount,5
the excess shall be disposed of as follows:6
(a) Any nondeductible voluntary employee contribution to the extent it7
would reduce the excess amount shall be returned to the member.8
(b) If after the application of Subparagraph (a) of this Paragraph an excess9
amount still exists, then any nondeductible mandatory contribution to the extent it10
would reduce the excess amount shall be returned to the member.11
(c) If after the application of Subparagraph (b) of this Paragraph an excess12
amount still exists and the member is covered by the plan at the end of the limitation13
year, the excess amount in the member's account shall be used to reduce employer14
contributions, including any allocation of forfeitures, for such member in the next15
limitation year if necessary.16
(d) If after the application of Subparagraph (c) of this Paragraph an excess17
amount still exists and the member is not covered by the plan at the end of the18
limitation year, the excess amount shall be held unallocated in a suspense account.19
The suspense account shall be applied to reduce the future employer contributions20
for all remaining members in the next limitation year and each succeeding limitation21
year if necessary.22
(e) If a suspense account is in existence at any time during a limitation year23
pursuant to the provisions of this Section, it shall not participate in the allocation of24
the trust's investment gains and losses. If a suspense account is in existence at any25
time during a particular limitation year, all amounts in the suspense account shall be26
allocated and reallocated to members' accounts before any employer or any27
employee contributions may be made to the plan for that limitation year. Excess28
amounts shall not be distributed to members or former members.29 HLS 12RS-2059 REENGROSSED
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(6) "Excess amounts" of a member for a limitation year shall mean the1
excess of the member's annual additions for the limitation year over the maximum2
permissible amount.3
(7) The "limitation year" shall be the calendar year or the twelve consecutive4
month period determined by the board of trustees.5
(8)(a) The "maximum permissible amount" for a member for a limitation6
year shall be the maximum annual addition that may be contributed or allocated to7
a member's account under the plan for any limitation year and shall not exceed the8
lesser of:9
(i) Forty thousand dollars, as adjusted after 2001 for changes in the cost of10
living in accordance with 26 U.S.C. 415(d).11
(ii) One hundred percent of the member's compensation for the limitation12
year.13
(b) The compensation limitation provided for in Item (a)(ii) of this Paragraph14
shall not apply to any contribution for medical benefits within the meaning of 2615
U.S.C. 401(h) or 419A(f)(2) that is otherwise treated as an annual addition pursuant16
to 26 U.S.C. 415(l) or 419A(d)(2).17
F. The board of trustees may adopt provisions of the system that will carry18
out the requirements of Subsections C, D, and E of this Section, and the board of19
trustees may adopt provisions as required for the system to maintain its qualified20
status under 26 U.S.C. 401(a).21
§1633. Retirement eligibility; benefits at three and one-half percent22
* * *23
C. The limitations of R.S. 11:1632(C) and (E) shall apply to this Section.24
* * *25
§1635. Return of accumulated contributions 26
A. Should a member cease to be an employee except by death or retirement27
under the provisions of this Chapter, he shall be paid such part of the amount of the28
accumulated contributions standing to the credit of his individual account in the29 HLS 12RS-2059 REENGROSSED
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annuity savings fund as he shall demand. Should a member die before retirement the1
amount of his accumulated contributions standing to the credit of his individual2
account shall be paid to his estate or to such person as he shall have nominated by3
written designation, duly executed and filed with the board of trustees, unless4
benefits are payable under R.S. 11:1636.5
B. Notwithstanding any other provision of law to the contrary that would6
otherwise limit a member's election under this Section, a distributee may elect, at the7
time and in the manner prescribed by the plan administrator, to have any portion of8
an eligible rollover distribution paid directly to an eligible retirement plan specified9
by the distributee in a direct rollover.10
C. If a distribution is one to which 26 U.S.C. 401(a)(11) and 417 do not11
apply, the distribution may commence fewer than thirty days after the notice required12
under 26 CFR 1.411(a)-11(c) is given, if both of the following apply:13
(1) The plan administrator clearly informs the member that he has a right to14
a period of at least thirty days after receiving the notice to consider the decision of15
whether or not to elect a distribution and, if applicable, a particular distribution16
option.17
(2) The participant, after receiving the notice, affirmatively elects a18
distribution.19
D. As used in this Section, the following terms shall mean the following:20
(1) "Direct rollover" means a payment by the plan to the eligible retirement21
plan specified by the distributee.22
(2) "Distributee" means a member or former member. In addition, the23
member's or former member's surviving spouse, or the member's spouse or former24
member's spouse with whom a benefit or return of employee contributions is to be25
divided pursuant to R.S. 11:291(B) are distributees with reference to an interest of26
the member or former spouse.27
(3) "Eligible retirement plan" means an individual retirement account28
described in 26 U.S.C. 408(a), an individual retirement annuity described in 2629 HLS 12RS-2059 REENGROSSED
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U.S.C. 408(b), an annuity plan described in 26 U.S.C. 403(a), or a qualified trust1
described in 26 U.S.C. 401(a), that accepts the distributee's eligible rollover2
distribution. However, in the case of an eligible rollover distribution to the surviving3
spouse, an eligible retirement plan is an individual retirement account or individual4
retirement annuity. "Eligible retirement plan" shall also mean an annuity contract5
described in 26 U.S.C. 403(b) and an eligible plan under 26 U.S.C. 457(b) that is6
maintained by the state or any political subdivision or instrumentality thereof7
agreeing to account separately for amounts transferred into such plan from this8
system. A distribution to a surviving spouse or to a spouse or former spouse who is9
the alternate payee under a qualified domestic relations order shall not make the10
retirement plan ineligible.11
(4) "Eligible rollover distribution" means any distribution of all or any12
portion of the balance to the credit of the distribution, except that an eligible rollover13
distribution does not include any distribution that is one of a series of substantially14
equal periodic payments, not less frequently than annually, made for the life or life15
expectancy of the distributee or the joint lives or joint life expectancies of the16
distributee and the distributee's designated beneficiary, or for a specified period of17
ten years or more; any distribution to the extent such distribution is required under18
26 U.S.C. 401(a)(9); and the portion of any distribution that is not includable in gross19
income, determined without regard to the exclusion for net unrealized appreciation20
with respect to employer securities. A portion of a distribution shall not fail to be an21
eligible rollover distribution merely because the portion consists of after-tax22
employee contributions which are not includable in gross income; however, such23
portion may be paid only to an individual retirement account or annuity described24
in 26 U.S.C. 408(a) or (b), or to a qualified defined contribution plan described in 2625
U.S.C. 401(a) or 403(a) that agrees to account separately for amounts so transferred,26
including accounting separately for the portion of such distribution which is27
includable in gross income and the portion of such distribution which is not28
includable. The system shall accept member rollover contributions, direct rollovers29 HLS 12RS-2059 REENGROSSED
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of distributions made after December 31, 2011, or both, from the following types of1
plans: individual retirement accounts or annuities or plans qualified under 26 U.S.C.2
401(a) or 403(a), governmental deferred compensation arrangements defined in 263
U.S.C. 457(b), or tax sheltered annuities or other arrangements under 26 U.S.C.4
403(b), beginning on the effective date specified; but only for the purposes of5
repaying prior distributions or purchasing service credits permitted under 26 U.S.C.6
415(k)(3) and 415(n).7
E. The board of trustees may adopt provisions of the system that carry out8
the requirements of Subsections B, C, and D of this Section, and the board of trustees9
may adopt provisions as required to maintain the qualified status of the system under10
26 U.S.C. 401(a).11
§1636. Survivors' benefits 12
* * *13
C.(1) If a survivor benefit is payable to a specified person or persons or if a14
benefit is payable at death under an option elected pursuant to R.S. 11:1637, the15
member shall be considered to have designated such person as a designated16
beneficiary hereunder. If there is more than one such person, then the oldest such17
person shall be considered to have been so designated, or, if none, the oldest person18
entitled to receive a survivor benefit shall be considered to have been so designated.19
The designation of a designated beneficiary hereunder shall not prevent payment to20
multiple beneficiaries but shall only establish the permitted period of payments.21
(2) Distributions from the retirement system shall be made in accordance22
with the requirements set forth in 26 U.S.C. 401(a)(9), including the minimum23
distribution incidental benefit rules applicable thereunder.24
(3) A member's benefits shall be made or shall commence to be paid on or25
before the required beginning date.26
(4) The required beginning date shall be April first of the calendar year27
following the later of the calendar year in which the member attains seventy and28
one-half years of age, or the calendar year in which the employee retires.29 HLS 12RS-2059 REENGROSSED
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D. The board of trustees may adopt provisions of the system that will carry1
out the requirements of Subsection C of this Section, and the board of trustees may2
adopt provisions as required to maintain the qualified status of the system under 263
U.S.C. 401(a).4
* * *5
§1638. Cost-of-living increase of benefits6
* * *7
C. No increase in benefits pursuant to Subsection A of this Section shall8
apply if the resulting benefit would exceed the limitations of R.S. 11:1632(C).9
* * *10
§1645. Excess benefit arrangement11
A. A separate, nonqualified, unfunded excess benefit arrangement is hereby12
created outside the trust fund of the retirement system. This excess benefit13
arrangement shall be administered as a governmental excess benefit arrangement14
under 26 U.S.C. 415(m). The purpose of the excess benefit arrangement is to pay15
to retirees of the retirement system benefits otherwise payable by the retirement16
system that exceed the limitations on benefits imposed by 26 U.S.C. 415(b)(1)(A).17
B. The board of trustees shall be responsible for the administration of the18
arrangement provided for in this Section. Except as otherwise provided by this19
Section, the board has the same rights, duties, and responsibilities concerning the20
excess benefit arrangement as it has to the trust fund and may adopt rules and21
regulations necessary to administer this arrangement in accordance with the22
Administrative Procedure Act and in compliance with 26 U.S.C. 415(m).23
C. Benefits under this Section are exempt from execution to the same extent24
as provided by R.S. 11:1583, subject to the exceptions in R.S. 11:291 and 292, and25
the benefits are completely unassignable. Contributions to this arrangement are not26
held in trust and may not be commingled with other funds of the retirement system.27
D. A retiree is entitled to a monthly benefit under this Section in an amount28
equal to the amount by which the benefit otherwise payable by the retirement system29 HLS 12RS-2059 REENGROSSED
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has been reduced by the limitation on benefits imposed by 26 U.S.C. 415(b)(1)(A).1
The benefit payable by this arrangement is payable at the time and in the form that2
the benefit payable under the trust fund is paid.3
E. The benefit payable under this Section shall be paid from contributions4
that otherwise would be made to the trust fund under this Chapter. In lieu of deposit5
in the trust account, an amount determined by the retirement system to be necessary6
to pay benefits under this Section shall be paid monthly to the credit of a separately7
dedicated account maintained only for the excess benefit arrangement. The account8
may include amounts needed to pay reasonable and necessary expenses of9
administering this arrangement. The monthly amounts to be paid to the credit of the10
account shall be transferred to the account prior to the date of a monthly11
disbursement under this Section. No assets of the system shall be used to provide12
such benefits.13
F. The board may amend, terminate, or reestablish the arrangement at any14
time. Such amendment or termination may be retroactive to the extent that the board15
deems such action necessary to maintain the tax qualified status of the system or the16
status of this arrangement as an excess benefit arrangement or to avoid jeopardizing17
the funded status of the system. In addition, the arrangement may be amended or18
terminated to eliminate all benefits with respect to any member or other person who19
has not become eligible to participate in an excess benefit plan arrangement as of the20
date of such amendment or termination.21
§1646. Reversion of funds prohibited22
A. Plan assets shall not be used for, or diverted to, any person or purpose23
other than for the exclusive benefit of the members and their beneficiaries, except24
that contributions made by the employer may be returned to the employer if the25
contribution was made due to a mistake of fact and the contribution is returned26
within one year of the mistaken payment of the contribution.27
B. The amount of any contribution returned shall not exceed the difference28
between the amount actually contributed and the amount which would have been29 HLS 12RS-2059 REENGROSSED
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contributed had there been no mistake of fact and shall not include the earnings1
attributable to such contribution. The amount of the contribution returned shall be2
reduced by any losses attributable to the contribution, and no member shall have his3
benefit reduced by the return of the contribution to less than such benefit would have4
been had the contribution not been returned.5
C. Notwithstanding the provisions of Subsections A and B of this Section,6
if the retirement system is terminated and all obligations under the retirement system7
are fully funded and provided for, any excess funds held by the system shall be8
returned to the employer.9
Section 2. This Act shall become effective on January 1, 2013.10
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.
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 for a supplemental benefit if a member retires and then comes back to
work in a covered position. His original benefit is suspended during the period of his
reemployment, and if the member works less than 36 months, his supplemental benefit
(benefit based on reemployed service) will be calculated using the lesser of his average final
compensation at his original retirement date or his average compensation during the period
of his reemployment. If the member works more than 36 months, his benefits shall be
calculated using the average final compensation during his period of reemployment.
Proposed law changes 36 months to 60 months. HLS 12RS-2059 REENGROSSED
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Further provides that forfeitures in the system resulting from termination of employment or
withdrawal of member contributions shall not result in augmented benefits to remaining
members.
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. 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 Jan. 1, 2013.
(Amends R.S. 11:1581(5), 1612, 1614, 1617, 1631(F)(1), and 1635; Adds R.S. 11:1588,
1631(G), 1632(C), (D), (E), and (F), 1633(C), 1636(C) and (D), 1638(C), 1645, and 1646)
Summary of Amendments Adopted by House
House Floor Amendments to the engrossed bill.
1. Provides that military service may be credited toward the member's accrued
service as provided in present law.
2. Provides for calculation of supplemental benefit for employment after retirement
based on working more or less than 60 months rather than the 36 in present law. HLS 12RS-2059 REENGROSSED
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3. Provides that excesses remaining in the system from forfeitures due a member
terminating employment or withdrawing his contributions shall not be used to
augment the benefits of remaining members.
4. Provides relative to the interest rate used in the calculation of retirement benefits.