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Regular Session, 2012
HOUSE BILL NO. 41
BY REPRESENTATIVE PEARSON
RETIREMENT/CLERKS COURT: Provides relative to the federal tax qualification status
of the system
AN ACT1
To amend and reenact R.S. 11:1532 and to enact R.S. 11:1518, 1521.2, 1524(C), and2
1533(F), relative to the Clerks' of Court Retirement and Relief Fund; to provide3
relative to federal tax qualification status; to authorize changes to be made using the4
Administrative Procedure Act; and to provide for related matters.5
Notice of intention to introduce this Act has been published6
as provided by Article X, Section 29(C) of the Constitution7
of Louisiana.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 11:1532 is hereby amended and reenacted and R.S. 11:1518, 1521.2,10
1524(C), and 1533(F) are hereby enacted to read as follows: 11
§1518. Reemployment of a member after military service12
A. The qualified military service of a member who has been reemployed in13
accordance with 26 U.S.C. 414(u) shall be treated for vesting and benefit accrual14
purposes as service completed under R.S. 11:1514 if the member remits to the fund15
any employee contributions which would have been required but for the member's16
leave of absence to perform qualified military service.17
B. Effective January 1, 2007, if a member dies while on a leave of absence18
to perform qualified military service as described in 26 U.S.C. 414(u), his19
beneficiary is entitled to any benefits, except benefits that accrued during the period20 HLS 12RS-412 ORIGINAL
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of qualified military service, that would have been provided under the plan had the1
member resumed and then terminated employment due to death, in accordance with2
26 U.S.C. 401(a)(37).3
* * *4
§1521.2. Maximum compensation5
A. For the purposes of calculating any benefit payable under this plan, any6
compensation in excess of the limits set forth in 26 U.S.C. 401(a)(17) shall be7
disregarded.8
B. Subsection A of this Section shall not apply to members who enrolled in9
the plan on or before January 1, 1996.10
* * *11
§1524. Optional benefit payments 12
* * *13
C.(1) A retiree who has been married for one year or more shall elect Option14
2, 3, 4, or 5 of Subsection A of this Section. If the retiree chooses Option 2 or 3, he15
shall nominate his surviving spouse as the joint annuitant with the retiree. If the16
retiree chooses Option 4, he shall select a benefit ensuring that, upon his death, no17
less than fifty percent of the benefit shall be payable to his surviving spouse during18
the spouse's lifetime.19
(2) If a retiree’s spouse has executed a qualified waiver of the joint and20
survivor annuity requirements in accordance with 26 U.S.C. 417, Paragraph (1) of21
this Subsection is not applicable to the retiree.22
* * *23
§1532. Direct rollover of eligible rollover distributions24
A. Notwithstanding any provision of this pension plan to the contrary that25
would otherwise limit a distributee's election under this Section, a distributee may26
elect, at the time and in the manner prescribed by the board of trustees, to have any27
portion of an eligible rollover distribution paid directly to an eligible retirement plan28
specified by the distributee in a direct rollover. For this purpose, an eligible rollover29 HLS 12RS-412 ORIGINAL
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distribution is any distribution made on or after December 1, 1994, of all or any1
portion of the balance to the credit of the distributee, except that an eligible rollover2
distribution does not include: any equal periodic payments (not less frequently than3
annually) made for the life (or life expectancy) of the distributee or the joint lives (or4
joint life expectancies) of the distributee and the distributee's designated beneficiary5
or for a specified period of ten years or more; any distribution to the extent such6
distribution is required under Section 401(a)(9) of the Internal Revenue Code,7
hereinafter referred to in this Section as "the Code"; and the portion of any8
distribution that is not includable in gross income. An eligible retirement plan is an9
individual retirement account described in Section 408(b) of the Code, an individual10
retirement annuity described in Section 408(a) of the Code, or a qualified trust11
described in Section 401(a) of the Code, that accepts the distributee's eligible12
rollover distribution. In the case of an eligible rollover distribution to a surviving13
spouse, however, an eligible retirement plan is only an individual retirement account14
or individual retirement annuity. A distributee includes a member or former15
member. In addition, the member's or former member's surviving spouse and the16
member's or former member's spouse or former spouse who is an alternate payee17
under a qualified domestic relations order, as defined in Section 414(p) of the Code,18
are distributees with regard to the interest of the spouse or former spouse. A direct19
rollover is payment by the plan to the eligible retirement plan specified by the20
distributee.21
B.(1) The fund shall, within a reasonable period of time before making an22
eligible rollover distribution as provided for in Subsection A of this section, provide23
a written explanation of the following to the recipient of such distribution:24
(a) The provisions under which the recipient may have the distribution25
directly transferred to an eligible retirement plan and that the automatic distribution26
by direct transfer applies to certain distributions in accordance with 26 U.S.C.27
401(a)(31)(B).28 HLS 12RS-412 ORIGINAL
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(b) The provision which requires the withholding of tax on the distribution1
if it is not directly transferred to an eligible retirement plan.2
(c) The provisions under which the distribution will not be subject to tax if3
transferred to an eligible retirement plan within sixty days after the date on which the4
recipient received the distribution.5
(d) The provisions under which distributions from the eligible retirement6
plan receiving the distribution may be subject to restrictions and tax consequences7
that are different from those applicable to distributions from the plan making such8
distribution.9
(2) For the purposes of this Subsection, the term "reasonable period of time"10
shall have the meaning assigned to it by 26 U.S.C. 401(a)(31) and the regulations11
thereunder.12
* * *13
§1533. Internal Revenue Code qualification requirements14
* * *15
F. Amendments to the fund required for the purpose of maintaining16
continued compliance with the Internal Revenue Code and the regulations thereunder17
may be promulgated as rules in accordance with the Administrative Prodecure Act.18
* * *19
Section 2. This Act shall become effective upon signature by the governor or, if not20
signed by the governor, upon expiration of the time for bills to become law without signature21
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If22
vetoed by the governor and subsequently approved by the legislature, this Act shall become23
effective on the day following such approval.24 HLS 12RS-412 ORIGINAL
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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)]
Pearson HB No. 41
Abstract: Provides relative to maintaining the federal tax qualification status of the Clerks'
of Court Retirement and Relief Fund (CCRS).
Present law creates the CCRS. Provisions within present law qualify the CCRS to be a
"qualified plan" under the provisions of the federal tax code. Such status affords certain
benefits to the plan and its members (for example, earnings within the plan are not taxed
until distribution).
Proposed law retains present law and makes changes to present law in order to comply with
federal tax regulations.
Proposed law provides that a member who is reemployed after military service shall receive
service credit for the period of this military service if he remits employee contributions
which would have been required but for military service.
Proposed law, effective Jan. 1, 2007, provides that if a member dies during leave for military
service, his beneficiary is entitled to any benefit, except benefits that accrued during military
service, that would have been provided had the member resumed employment and then died.
Proposed law provides relative to the maximum compensation that members may receive
under the federal tax code.
Present law provides optional retirement selections for members relating to how the member
would like his benefits to be paid. Proposed law retains present law and further requires
payment of at least 50% of a member's benefits to his surviving spouse if he chooses an
option with an annuity.
Present law authorizes a member to roll an eligible distribution over to another tax vehicle
recognized by the federal tax code. Proposed law requires notice to the member on certain
information on tax consequences relative to the transfer.
Proposed law authorizes any future amendments necessary to comply with the federal tax
code to be promulgated by the governing board by rule, utilizing the Administrative
Procedure Act.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 11:1532; Adds R.S. 11:1518, 1521.2, 1524(C), and 1533(F))