SLS 12RS-122 ORIGINAL
Page 1 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2012
SENATE BILL NO. 33
BY SENATOR GUILLORY
RETIREMENT SYSTEMS. Requires employers to continue contributing to state and
statewide public retirement systems for the duration of DROP participation. (6/30/12)
AN ACT1
To amend and reenact R.S. 11:102(B)(1), 103(B)(1), 448(A), 450(B), 787(A)(1), 1152(E)2
and (H), 2221(E)(1)(a), and 2257(E), relative to deferred retirement option plans or3
programs; to provide for employer contributions in state and statewide retirement4
systems pursuant to such plans or programs; to require employer contributions to5
continue during any employee's participation in such a plan or program; to provide6
for an effective date; and to provide for related matters.7
Notice of intention to introduce this Act has been published.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 11:102(B)(1), 103(B)(1), 448(A), 450(B), 787(A)(1), 1152(E) and10
(H), 2221(E)(1)(a), and 2257(E), are hereby amended and reenacted to read as follows:11
§102. Employer contributions; determination; state systems12
* * *13
B.(1) Except as provided in Subsection C of this Section for the Louisiana14
State Employees' Retirement System and except as provided in R.S. 11:102.1 and15
102.2 and in Paragraph (5) of this Subsection, for each fiscal year, commencing with16
Fiscal Year 1989-1990, for each of the public retirement systems referenced in17 SB NO. 33
SLS 12RS-122 ORIGINAL
Page 2 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Subsection A of this Section, the legislature shall set the required employer1
contribution rate equal to the actuarially required employer contribution, as2
determined under Paragraph (3) of this Subsection, divided by the total projected3
payroll of all active members of each particular system for the fiscal year. Active4
member payroll shall include participants in the Deferred Retirement Option5
Plan. Each entity funding a portion of a member's salary shall also fund the6
employer's contribution on that portion of the member's salary at the employer7
contribution rate specified in this Subsection.8
* * *9
§103. Employer contributions; determination; statewide systems10
* * *11
B.(1) Except as provided in Subsection C of this Section, for each fiscal year12
beginning with Fiscal Year 1989-1990, for each statewide retirement system, the13
employer contribution rate shall equal the actuarially required employer contribution14
as determined under Paragraph (3) of this Subsection, divided by the total projected15
payroll of all active members of the particular system for the fiscal year. Active16
member payroll shall include participants in the Deferred Retirement Option Plan,17
but only if direct employer contributions are made based on salaries for such18
participants.19
* * *20
§448. Plan participation21
A. Upon the effective date of commencement of participation in the plan and22
during the period of participation in the plan, neither the no employee nor the23
employer contributions shall be payable, and the participant in the plan shall be24
considered as a Deferred Retirement Option Plan participant, and except as provided25
in R.S. 11:447 through 454, the Deferred Retirement Option Plan participant shall26
be treated as a member of the system. Employer contributions shall continue to27
be payable by the employer during the person's plan participation.28
* * *29 SB NO. 33
SLS 12RS-122 ORIGINAL
Page 3 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
§450. Termination of participation1
* * *2
B. Upon termination of participation in the plan but not employment, credits3
to the account shall cease and no retirement benefits shall be paid to the participant4
until employment is terminated. The balance in the participant's subaccount shall be5
placed in a self-directed subaccount in the name of the participant as provided for in6
R.S. 11:451.1, and the participant shall then be bound by the provisions of said7
Section. No payment shall be made based on credits in the subaccount until8
employment is terminated as defined in this Section. The participant may continue9
employment after termination of participation in the plan for the sole purpose of10
accruing a supplemental benefit, and employer and employee contributions shall11
resume. Correction officers, probation and parole officers, and security officers of12
the Department of Public Safety and Corrections; peace officers of the Department13
of Public Safety and Corrections, office of state police, other than state troopers, as14
provided in R.S. 11:444(A)(2)(b); and personnel employed by the Department of15
Revenue, office of alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c),16
who have ended their participation in the Deferred Retirement Option Plan but not17
employment shall make contributions at the rate established in R.S. 11:62(5)(b).18
* * *19
§787. Plan participation20
A.(1) During participation in the plan, although the member shall remain a21
member of this retirement system, neither no regular member nor employer22
contributions to the regular plan shall be payable. Employer contributions shall23
continue to be payable by the employer during the member's plan participation.24
* * *25
§1152. Deferred Retirement Option Plan26
* * *27
E. Upon the effective date of the commencement of participation in the plan,28
active membership in the regular retirement plan of the system shall terminate, and29 SB NO. 33
SLS 12RS-122 ORIGINAL
Page 4 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
the participant shall be considered by the system to be in a retired status. Employee1
and employer contributions to the regular retirement plan shall cease upon the2
effective date of the person's commencement of participation in the plan. Employer3
contributions shall continue to be payable by the employer during the person's4
plan participation. For purposes of this Section, average compensation and5
creditable service shall remain as they existed on the effective date of6
commencement of participation in the plan. Creditable service shall not include7
conversion of sick and annual leave. The monthly retirement benefits that would8
have been payable, had the person elected to cease employment and receive a service9
retirement allowance, shall be paid into the Deferred Retirement Option Plan Fund10
Account which shall be a part of the system fund. This account shall not be subject11
to any fees, costs, or expenses of any kind.12
* * *13
H. Upon termination of participation in the plan but not employment, credits14
to the account shall cease, and no retirement benefits shall be paid to the participant15
until employment is terminated. No payment shall be made based on credits in the16
account until employment is terminated. Employer and employee Employee17
contributions shall resume.18
* * *19
§2221. Deferred Retirement Option Plan20
* * *21
E.(1)(a) Upon the effective date of the commencement of participation in the22
plan, membership in the system shall terminate and neither no employee nor23
employer contributions shall be payable. Employer contributions shall continue24
to be payable by the employer during the person's plan participation.25
* * *26
§2257. Deferred retirement option plan27
* * *28
E. Upon the effective date of the commencement of participation in the plan,29 SB NO. 33
SLS 12RS-122 ORIGINAL
Page 5 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
membership in the system shall terminate and neither no employee nor employer1
contributions shall be payable. Employer contributions shall continue to be2
payable by the employer during the person's plan participation. For purposes of3
this Section, compensation and creditable service shall remain as they existed on the4
effective date of commencement of participation in the plan. The monthly retirement5
benefits that would have been payable, had the member elected to cease employment6
and receive a service retirement allowance, shall be paid into the deferred retirement7
option plan account. Upon termination of employme nt, deferred benefits shall be8
payable as provided by Subsection H.9
* * *10
Section 2. The Public Retirement Systems' Actuarial Committee shall meet as soon11
as practicable after the effective date of this Act to adopt a revised valuation for each system12
to which the provisions of this Act apply. This valuation shall include a revised employer13
contribution rate calculated as provided in R.S. 11:102 or 103 utilizing active member14
payroll including participants in the Deferred Retirement Option Plan of each system or each15
plan within the system.16
Section 3. This Act shall become effective on June 30, 2012; if vetoed by the17
governor and subsequently approved by the legislature, this Act shall become effective on18
June 30, 2012, or on the day following such approval by the legislature, whichever is later.19
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law provides for a program called the Deferred Retirement Option Plan (DROP), or
a similar program, in each state or statewide retirement system.
Proposed law retains present law.
Present law provides that the following eight state and statewide retirement systems continue
to receive employer contributions during an employee's participation in DROP or in the
system's similar program:
(1)State Police Pension and Retirement System.
(2)Assessors' Retirement Fund.
(3)Clerks' of Court Retirement and Relief Fund.
(4)District Attorneys' Retirement System.
(5)Municipal Employees' Retirement System of Louisiana. SB NO. 33
SLS 12RS-122 ORIGINAL
Page 6 of 6
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(6)Parochial Employees' Retirement System of Louisiana.
(7)Registrars of Voters Employees' Retirement System.
(8)Sheriffs' Pension and Relief Fund.
Proposed law retains present law.
Present law provides that employer contributions cease during an employee's participation
in DROP for the following five state and statewide retirement systems:
(1)Louisiana State Employees' Retirement System.
(2)Teachers' Retirement System of Louisiana.
(3)Louisiana School Employees' Retirement System.
(4)Firefighters' Retirement System.
(5)Municipal Police Employees' Retirement System of Louisiana.
Proposed law provides that employer contributions shall continue during an employee's
participation in DROP for the five state and statewide retirement systems listed above.
Proposed law provides that provisions of proposed law shall be implemented for the fiscal
year beginning July 1, 2012, by requiring the Public Retirement Systems' Actuarial
Committee to meet as soon as practicable after the effective date of proposed law to adopt
valuations containing contribution rates which account for the provisions of proposed law.
Effective June 30, 2012.
(Amends R.S. 11:102(B)(1), 103(B)(1), 448(A), 450(B), 787(A)(1), 1152(E) and (H),
2221(E)(1)(a), and 2257(E))