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Regular Session, 2012
SENATE BILL NO. 7
BY SENATOR GUILLORY
MUNICIPAL EMPLOYEE RET. Provides for a 60 month final compensation for all active
employees. (7/1/12)
AN ACT1
To amend and reenact R.S. 11:1732(15) and 1763(J)(1), (2), and (3), relative to the2
Municipal Employees' Retirement System; to provide for final average3
compensation; to provide for calculation of additional benefits following4
participation in the Deferred Retirement Option Plan; to provide for transitional5
provisions; to provide an effective date; and to provide for related matters.6
Notice of intention to introduce this Act has been published.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 11:1732(15) and 1763(J)(1), (2), and (3) are hereby amended and9
reenacted to read as follows: 10
§1732. Definitions11
The following words and phrases, as used in this Chapter, unless a different12
meaning is plainly required by the context, shall have the following meaning:13
* * *14
(15)(a) "Final compensation", for a member whose first employment making15
him eligible for membership in the system began on or before June 30, 2006, means16
the average monthly earnings during the highest thirty-six consecutive months or17 SB NO. 7
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joined months if service was interrupted. The earnings to be considered for the1
thirteenth through the twenty-fourth months shall not exceed one hundred fifteen2
percent of the earnings for the first through the twelfth months. The earnings to be3
considered for the final twelve months shall not exceed one hundred fifteen percent4
of the earnings of the thirteenth through the twenty-fourth months.5
(b) "Final compensation", for a member whose first employment making him6
eligible for membership in the system began on or after July 1, 2006, means the7
average monthly earnings during the highest sixty consecutive months or joined8
months if service was interrupted. The earnings to be considered for the thirteenth9
through the twenty-fourth months shall not exceed one hundred fifteen percent of the10
earnings for the first through the twelfth months. The earnings to be considered for11
the twenty-fifth through the thirty-sixth month shall not exceed one hundred fifteen12
percent of the earnings for the thirteenth through the twenty-fourth month. The13
earnings to be considered for the thirty-seventh through the forty-eighth month shall14
not exceed one hundred fifteen percent of the earnings for the twenty-fifth through15
the thirty-sixth month. The earnings to be considered for the final twelve months16
shall not exceed one hundred fifteen percent of the earnings of the thirty-seventh17
through the forty-eighth month.18
* * *19
§1763. Deferred Retirement Option Plan20
* * *21
J. If employment is not terminated at the end of the period specified for22
participation in the plan, payments into the plan fund shall cease and the person shall23
resume active contributing membership in the system. Payments from the plan fund24
shall not be made until employment is terminated, nor shall the monthly benefits25
which were being paid into the plan fund during the period of participation be26
payable to the person until he terminates employment. Upon termination of27
employment, the person shall receive a lump sum payment from the plan fund equal28
to his account in that fund, a true annuity based upon his account in that fund, or any29 SB NO. 7
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other method of payment approved by the board of trustees. If a person elects to1
receive a true annuity or other method of payment approved by the board of trustees,2
funds shall be transferred from the plan fund to the annuity reserve fund to provide3
for the annuity payments. Also upon termination of employment, the monthly4
benefits which were being paid into the plan fund shall begin to be paid to the retiree5
and he shall receive an additional benefit based on his additional service rendered6
since termination of participation in the fund, using the normal method of7
computation of benefit, subject to the following:8
(1)(a) If his first employment making him eligible for membership in the9
system began on or before June 30, 2006, and his period of additional service is less10
than thirty-six the number of months used in the computation of his original11
benefit months, the average compensation figure used to calculate the additional12
benefit shall be that used to calculate his original benefit.13
(b) If his first employment making him eligible for membership in the system14
began on or after July 1, 2006, and his period of additional service is less than sixty15
months, the average compensation figure used to calculate the additional benefit16
shall be that used to calculate his original benefit.17
(2)(a) If his first employment making him eligible for membership in the18
system began on or before June 30, 2006, and his period of additional service is19
thirty-six months or more, the average compensation figure used to calculate the20
additional benefit shall be based on his compensation during the period of additional21
service.22
(b) If his first employment making him eligible for membership in the system23
began on or after July 1, 2006, and his period of additional service is sixty or equal24
to or more than the number of months used in the computation of his original25
benefit, the average compensation figure used to calculate the additional benefit26
shall be based on his compensation during the period of additional service.27
(3) In no event shall the additional benefit exceed an amount which, when28
combined with the original benefit, equals one hundred percent of the monthly29 SB NO. 7
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average final compensation figure used to compute the additional benefit.1
* * *2
Section 2. This Act shall be implemented according to the provisions of this Section.3
(A) For transitional purposes, the provisions of R.S. 11:1732(15) shall be phased in4
as follows:5
(1) For members retiring or entering the Deferred Retirement Option Plan before6
January 1, 2013, and whose first employment making them eligible for membership in the7
system began on or before June 30, 2006, the provisions of R.S. 11:1732(15) shall apply as8
they existed before the effective date of this Act.9
(2) For those members retiring or entering the Deferred Retirement Option Plan on10
or after January 1, 2013, and on or before December 31, 2014, and whose first employment11
making them eligible for membership in the system began on or before June 30, 2006, the12
period used to calculate monthly average final compensation shall be thirty-six months plus13
the number of whole months since January 1, 2013.14
(B) Notwithstanding any other provision of this Section to the contrary, the monthly15
final compensation expressed in dollars used to compute a member's benefit after the16
effective date of this Act shall not be less than the dollar amount of the average monthly17
earnings during the member's highest thirty-six consecutive months or joined months of18
service earned for employment before January 1, 2013.19
Section 3. This Act shall become effective July 1, 2012; if vetoed by the governor20
and subsequently approved by the legislature, this Act shall become effective on July 1,21
2012, or on the day following such approval by the legislature, whichever is later.22
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law relative to Municipal Employees, provides that the monthly final compensation
used to calculate benefits for persons hired on or before June 30, 2006, shall be based on the
highest 36 consecutive months of pay. For persons hired on or after July 1, 2006, the period
shall be 60 months.
Proposed law repeals present law and provides that the final compensation for all members
shall be 60 months. SB NO. 7
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Present law provides that a participant in the Deferred Retirement Option Plan (DROP) who
continues in employment after plan participation shall receive an additional benefit based
on the additional service rendered.
Proposed law retains present law.
Present law specifies that for a DROP participant if his first employment making him
eligible for membership in the system began on or before June 30, 2006, and the period of
additional service is less than 36 months, the additional benefit shall be calculated using the
final compensation figure used to calculate the original benefit. Further provides that if his
first employment making him eligible for membership in the system began on or before June
30, 2006, and the period of additional service is 36 months or more, the additional benefit
shall be calculated using compensation during the period of additional service.
Present law provides that if his first employment making him eligible for membership in the
system began on or after July 1, 2006, and the period of additional service is 60 months or
more, the additional benefit shall be calculated using the average compensation figure during
the period of additional service. Provides that if his first employment making him eligible
for membership in the system began on or after July 1, 2006, and the period of additional
service is 60 months or more, the additional benefit shall be calculated using the average
compensation figure during the period of additional service.
Proposed law requires at least 60 months of additional service to be rendered by all members
before the additional benefit is calculated using the monthly average final compensation for
the additional period of service.
Transitional Provisions
Proposed law provides transitional provisions from present law to proposed law for certain
members. Provides that for members retiring or entering DROP before Jan, 1, 2013, present
law applies and for members retiring or entering DROP on or after Jan. 1, 2013, and on or
before Dec. 31, 2014, the period used to calculate monthly average final compensation shall
be 36 months plus the number of whole months since Jan. 1, 2013. Further provides that the
final compensation period used to compute post-DROP additional benefit shall be equal to
the number of months utilized in computing the benefit upon entry into DROP.
Effective July 1, 2012.
(Amends R.S. 11:1732(15) and 1763(J)(1), (2), and (3))