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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
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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 who begin participation in the5
Deferred Retirement Option Plan on or after July 1, 2013. Each entity funding6
a portion of a member's salary shall also fund the employer's contribution on that7
portion of the member's salary at the employer contribution rate specified in this8
Subsection.9
* * *10
§103. Employer contributions; determination; statewide systems11
* * *12
B.(1) Except as provided in Subsection C of this Section, for each fiscal year13
beginning with Fiscal Year 1989-1990, for each statewide retirement system, the14
employer contribution rate shall equal the actuarially required employer contribution15
as determined under Paragraph (3) of this Subsection, divided by the total projected16
payroll of all active members of the particular system for the fiscal year. Active17
member payroll shall include participants in the Deferred Retirement Option Plan,18
but only if direct employer contributions are made based on salaries for such19
participants.20
* * *21
§448. Plan participation22
A. Upon the effective date of commencement of participation in the plan and23
during the period of participation in the plan, neither the no employee nor the24
employer contributions shall be payable, and the participant in the plan shall be25
considered as a Deferred Retirement Option Plan participant, and except as provided26
in R.S. 11:447 through 454, the Deferred Retirement Option Plan participant shall27
be treated as a member of the system. Employer contributions shall continue to28
be payable by the employer during the person's plan participation.29 SB NO. 33
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* * *1
§450. Termination of participation2
* * *3
B. Upon termination of participation in the plan but not employment, credits4
to the account shall cease and no retirement benefits shall be paid to the participant5
until employment is terminated. The balance in the participant's subaccount shall be6
placed in a self-directed subaccount in the name of the participant as provided for in7
R.S. 11:451.1, and the participant shall then be bound by the provisions of said8
Section. No payment shall be made based on credits in the subaccount until9
employment is terminated as defined in this Section. The participant may continue10
employment after termination of participation in the plan for the sole purpose of11
accruing a supplemental benefit, and employer and employee contributions shall12
resume. Correction officers, probation and parole officers, and security officers of13
the Department of Public Safety and Corrections; peace officers of the Department14
of Public Safety and Corrections, office of state police, other than state troopers, as15
provided in R.S. 11:444(A)(2)(b); and personnel employed by the Department of16
Revenue, office of alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c),17
who have ended their participation in the Deferred Retirement Option Plan but not18
employment shall make contributions at the rate established in R.S. 11:62(5)(b).19
* * *20
§787. Plan participation21
A.(1) During participation in the plan, although the member shall remain a22
member of this retirement system, neither no regular member nor employer23
contributions to the regular plan shall be payable. Employer contributions shall24
continue to be payable by the employer during the member's plan participation.25
* * *26
§1152. Deferred Retirement Option Plan27
* * *28
E. Upon the effective date of the commencement of participation in the plan,29 SB NO. 33
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active membership in the regular retirement plan of the system shall terminate, and1
the participant shall be considered by the system to be in a retired status. Employee2
and employer contributions to the regular retirement plan shall cease upon the3
effective date of the person's commencement of participation in the plan. Employer4
contributions shall continue to be payable by the employer during the person's5
plan participation. For purposes of this Section, average compensation and6
creditable service shall remain as they existed on the effective date of7
commencement of participation in the plan. Creditable service shall not include8
conversion of sick and annual leave. The monthly retirement benefits that would9
have been payable, had the person elected to cease employment and receive a service10
retirement allowance, shall be paid into the Deferred Retirement Option Plan Fund11
Account which shall be a part of the system fund. This account shall not be subject12
to any fees, costs, or expenses of any kind.13
* * *14
H. Upon termination of participation in the plan but not employment, credits15
to the account shall cease, and no retirement benefits shall be paid to the participant16
until employment is terminated. No payment shall be made based on credits in the17
account until employment is terminated. Employer and employee Employee18
contributions shall resume.19
* * *20
§2221. Deferred Retirement Option Plan21
* * *22
E.(1)(a) Upon the effective date of the commencement of participation in the23
plan, membership in the system shall terminate and neither no employee nor24
employer contributions shall be payable. Employer contributions shall continue25
to be payable by the employer during the person's plan participation.26
* * *27
§2257. Deferred retirement option plan28
* * *29 SB NO. 33
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E. Upon the effective date of the commencement of participation in the plan,1
membership in the system shall terminate and neither no employee nor employer2
contributions shall be payable. Employer contributions shall continue to be3
payable by the employer during the person's plan participation. For purposes of4
this Section, compensation and creditable service shall remain as they existed on the5
effective date of commencement of participation in the plan. The monthly retirement6
benefits that would have been payable, had the member elected to cease employment7
and receive a service retirement allowance, shall be paid into the deferred retirement8
option plan account. Upon termination of employment, deferred benefits shall be9
payable as provided by Subsection H.10
* * *11
Section 2. The Public Retirement Systems' Actuarial Committee shall meet as soon12
as practicable after the effective date of this Act to adopt a revised valuation for each system13
to which the provisions of this Act apply. This valuation shall include a revised employer14
contribution rate calculated as provided in R.S. 11:102 or 103 utilizing active member15
payroll including participants in the Deferred Retirement Option Plan of each system or each16
plan within the system.17
Section 3. This Act shall become effective on June 30, 2012; if vetoed by the18
governor and subsequently approved by the legislature, this Act shall become effective on19
June 30, 2012, or on the day following such approval by the legislature, whichever is later.20
The original instrument was prepared by Laura Gail Sullivan. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Margaret M. Corley.
DIGEST
Guillory (SB 33)
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. SB NO. 33
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2. Assessors' Retirement Fund.
3. Clerks' of Court Retirement and Relief Fund.
4. District Attorneys' Retirement System.
5. Municipal Employees' Retirement System of Louisiana.
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 employers shall contribute on employees who begin participation
in DROP on or after July 1, 2013, 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))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Retirement to the
original bill
1. Proposed law provides that an employer's contributions on employees who
begin participation in DROP on or after July 1, 2013, shall continue
throughout the employee's participation in DROP.