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Regular Session, 2013
SENATE BILL NO. 14
BY SENATOR MARTINY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT CREDIT. Provides relative to transfers of service credit between systems.
(2/3 - CA10s29(F)) (6/30/13)
AN ACT1
To amend and reenact R.S. 11:143, relative to transfers of service credit between public2
retirement systems; to provide for benefit calculation after transfer; to provide3
relative to reverse transfers; to allow reverse transfers to be made during active4
service in certain circumstances; to authorize purchase of the accrual rate of the5
receiving system; to allow the funding of certain accrual rate purchases by an6
employer; to provide limitations and requirements for an employer-funded purchase;7
to provide for an effective date; and to provide for related matters.8
Notice of intention to introduce this Act has been published.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 11:143 is hereby amended and reenacted to read as follows:11
ยง143. Transfers between systems12
A.(1) As provided in Subsection FG of this Section, any person who is in13
active service and is a member of any public retirement or pension system, fund, or14
plan maintained primarily for officers and employees of the state of Louisiana or of15
any political subdivision thereof, or of any district, board, commission, or other16
agency of either, or of any other such public entity who has been a member of such17 SB NO. 14
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system, fund, or plan for at least six months and who has membership credit in or1
who transferred service credit from any other such system, fund, or plan shall have2
the option of transferring all of his credit from every such system, fund, or plan to3
the system, fund, or plan he is currently contributing to or to the system to which he4
last contributed.5
(2)(a) Any member who transfers credit to the system, fund, or plan to which6
he last contributed shall be subject to the provisions of this Subsection.7
(b) A member shall only be allowed to execute a reverse transfer one time8
and the transfer must be executed immediately prior to retirement from the receiving9
system.10
(c) The request for a reverse transfer shall be accompanied by the member's11
application for retirement from the receiving system, and, on the day of the transfer,12
the member must terminate employment that made him eligible to be a member of13
the transferring system, and the member's date of retirement shall be made effective14
on the next business day following the transfer.15
(d) The member shall be allowed to apply such transferred credit toward16
attainment of the retirement eligibility requirements of the receiving system.17
(e) Any member who would not be eligible to retire from the receiving18
system after the transfer shall not be eligible to execute such a transfer under the19
provisions of this Paragraph.20
(f) Any member who executes a reverse transfer and is reemployed by an21
employer who is covered by the transferring system shall be ineligible for22
membership in the transferring system after the effective date of the transfer.23
(g) After the transfer is executed, the member who is transferring credit shall24
be ineligible for active contributing membership in the receiving system, unless the25
member is:26
(i) Employed in a capacity which would require membership in the receiving27
system as a condition of employment, and28
(ii) The member complies with all applicable provisions of law regarding the29 SB NO. 14
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reemployment of a retiree.1
(h) A reverse transfer shall be subject to the provisions of Subsection D of2
this Section.3
B. All credit that the employee had in the system, fund, or plan from which4
he is transferring, whether regular service credit, prior service credit, military service5
credit, or other credit, shall be transferred, except as provided below:6
(1) In the event that the member has six months or more of concurrent7
service in the transferring and receiving systems, the concurrent service in the8
transferring system and the funds attributable to such service shall remain in the9
transferring system.10
(2) In the event that the member has less than six months of concurrent11
service in the transferring and receiving systems, the concurrent service in the12
transferring system shall be canceled and the funds attributable to such service shall13
be transferred to the receiving system.14
C. Except as provided in Paragraph (5) D(6) of this Subsection Section and15
notwithstanding the provisions any provision of law to the contrary, the system,16
fund, or plan from which the person transfers such credit shall transfer to the17
receiving system, fund, or plan an amount which is the lesser of the following:18
(1) The greater of, the actuarial cost to the receiving system for the service19
transferred, or all employee contributions from the transferring system.20
(2) All employee contributions, all employer contributions, provided that in21
any system, fund, or plan, where the employer contribution is not a fixed percentage22
of the employee's earnings, an employer contribution which is equal to the employee23
contribution, in addition to a sum, representing interest, equal to the board-approved24
actuarial valuation rate of the transferring system, fund, or plan compounded25
annually, of all contributions per annum for each year of contribution to the date of26
transfer.27
D.(1) In the event that the amount of funds transferred is less than the28
actuarial cost of the service transferred in the receiving system, the person29 SB NO. 14
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transferring, except as provided for herein, shall pay the deficit or difference1
including the interest thereon at the board-approved actuarial valuation rate of the2
receiving system.3
(2) In lieu of paying the deficit or difference plus interest, the person may4
at his option, but only at the time of transfer, be granted an amount of credit in the5
receiving system, fund, or plan which is based on the amount of funds actually6
transferred by the transferring system, fund, or plan plus any additional funds less7
than the deficit paid by the member.8
(3) If the person transferring had any free service credit in the transferring9
system, he may transfer said service to the receiving system, but only upon payment10
of the employer and employee contributions that would have been paid if he had11
been a member of the receiving system at the time of service, plus interest thereon12
at the board approved actuarial valuation rate of the receiving system from date of13
such service until paid.14
(4) In Except as provided in Paragraph (5) of this Subsection, in the event15
that a person completes a transfer under the provisions of this Section, the retirement16
percentage factor of the transferring system shall be used to calculate his retirement17
benefit based on the number of years transferred.18
(5) If the accrual rate of the receiving system is greater than the accrual19
rate of the transferring system, a person executing a transfer pursuant to the20
provisions of this Section may elect to purchase the accrual rate of the receiving21
system applicable to the member on the date of such purchase for the purpose22
of applying that accrual rate to the transferred service credit by paying an23
amount calculated on an actuarial basis which totally offsets the increase in24
accrued liability of the receiving system resulting from the accrual rate25
adjustment.26
(5)(6) Any member of the Louisiana judiciary who took office prior to July27
1, 1986, and who transfers service credit from the District Attorneys' Retirement28
System to another retirement system shall not be required to pay the actuarial cost29 SB NO. 14
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for such transfer between systems, and the actuarial cost of such transfer shall be1
paid from the interest earnings of the receiving system which exceed the actuarially2
projected interest earnings in the fiscal years following such transfer.3
E. After the date on which the transfer is completed, the system, fund, or4
plan from which the member transfers shall have no future liability with respect to5
the person who transferred.6
F. (1)(a) Except as provided in Paragraph (2) of this Subsection, any7
member who transfers credit to the system, fund, or plan to which he last8
contributed shall be subject to the provisions of this Paragraph.9
(b) A member shall be allowed to execute a reverse transfer only one10
time, and the transfer must be executed immediately prior to retirement from11
the receiving system.12
(c) The request for a reverse transfer shall be accompanied by the13
member's application for retirement from the receiving system. On the day of14
the transfer, the member must terminate employment that made him eligible15
to be a member of the transferring system, and the member's date of retirement16
shall be made effective on the next business day following the transfer.17
(d) The member shall be allowed to apply such transferred credit18
toward attainment of the retirement eligibility requirements of the receiving19
system.20
(e) Any member who would not be eligible to retire from the receiving21
system after the transfer shall not be eligible to execute such a transfer under22
the provisions of this Paragraph.23
(f) Any member who executes a reverse transfer and is reemployed by24
an employer who is covered by the transferring system shall be ineligible for25
membership in the transferring system after the effective date of the transfer.26
(g) After the transfer is executed, the member who is transferring credit27
shall be ineligible for active contributing membership in the receiving system,28
unless the member is both:29 SB NO. 14
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(i) Employed in a capacity which would require membership in the1
receiving system as a condition of employment.2
(ii) Compliant with all applicable provisions of law regarding the3
reemployment of a retiree.4
(h) A reverse transfer shall be subject to the provisions of Subsection D5
of this Section.6
(2)(a) The provisions of this Paragraph shall apply only to persons who7
are not state employees and only to applications for transfer submitted to the8
receiving system on or before December 31, 2013.9
(b) Any person to whom this Section applies may execute a reverse10
transfer from the retirement system to which he is currently contributing to any11
other system to which he previously contributed if at the time he began12
contributing to the current system he was legally permitted to elect instead to13
remain a contributing member of the previous system.14
(c) The member shall be allowed to apply such transferred credit toward15
attainment of the retirement eligibility requirements of the receiving system.16
(d) After the transfer is complete, the member shall be an active,17
contributing member of the receiving system.18
F.G.(1) Each board of trustees or other such governing board shall adopt19
such rules and regulations, not in conflict herewith, as are necessary to carry out the20
provisions and intent of this Section and to prevent any duplication of credit.21
(2) Each governing authority shall determine at the first board meeting after22
January 1, 1986, if transfers into the system will be approved as provided in this23
Section, and such determination cannot be changed until the first board meeting of24
each successive year thereafter. The transfer of service credit and funds out of the25
system shall be at the sole option of the member.26
(3) No governing authority shall approve a transfer in which the transferred27
amount is less than one hundred percent of the increase in accrued liability to the28
receiving system created by such transfer; however, the person can pay the29 SB NO. 14
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difference in the assets to be transferred and the actuarial cost to the receiving1
system.2
(3) The transfer of service credit and funds out of a system shall be at3
the sole option of the member.4
G.H.(1) A member of a receiving system, fund, or plan must make a written5
application to the receiving system, fund, or plan requesting a transfer under this6
Section.7
(2)(a) In the event that a member dies after a written application for a8
transfer under this Section is received in the office of a receiving system, fund, or9
plan which normally accepts such transfers, such system, fund , or plan shall10
complete the transfer, and it shall be considered as completed the day before the11
death of the member.12
(b) A survivor, heir, or the estate of a deceased person or member shall not13
be allowed to request a transfer under this Section.14
Section 2.(A) The provisions of this Section shall apply only to members of the15
Firefighters' Retirement System who are employees of the St. George Fire Department who16
applied to transfer service credit from the New Orleans Fire Firefighters' Pension and Relief17
Fund into the Firefighters' Retirement System on or after August 26, 1999, and on or before18
December 31, 2007, and only to that service credit transferred from the New Orleans Fund19
during the designated time frame.20
(B) The System members to whom this Section applies may have the benefit21
accrual rate of the receiving System, applicable to the service credit transferred from22
the Fund to the System, purchased by having their employer pay the amount required23
pursuant to the provisions of this Act allowing a purchase of accrual rate. The24
adjusted accrual rate shall be effective on the June thirtieth following the execution25
of the agreement required pursuant to Subparagraph (C)(2)(b) of this Section.26
However, this increase in benefit shall not be an accrued benefit subject to the27
protection of Article X, Section 29(E) of the Constitution until the System has28
received full payment.29 SB NO. 14
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(C)(1) In order for the benefit accrual rate adjustment authorized by this1
Section to be effective, there shall be paid to the System an amount calculated on an2
actuarial basis which totally offsets the increase in accrued liability of the System3
resulting from the accrual rate adjustment.4
(2)(a) The governing authority of the St. George Fire Department is hereby5
authorized to pay the System the amount calculated pursuant to Paragraph (1) of this6
Subsection.7
(b) Except as provided in Subsection D of this Section, the transaction8
authorized by this Section, if funded by the Department, shall be treated as a merger9
of service credit. The governing authorities of the St. George Fire Department and10
the System shall execute a merger note to memorialize their respective obligations.11
The payments shall be amortized over the period of time applicable to mergers and12
the Department shall make annual level payments to the System. The annual interest13
rate applicable to the note shall be fixed at seven and one-half percent.14
(D) No funds derived from the assessments against insurers pursuant to R.S.15
22:1476 shall be used to pay any increased costs or increase in liability of the System16
resulting from the provisions of this Section.17
(E) Nothing in this Section shall be construed to authorize an increase in18
payments to any person receiving benefits before the effective date of this Section.19
Section 3. This Act shall become effective on June 30, 2013; if vetoed by the20
governor and subsequently approved by the legislature, this Act shall become effective on21
June 30, 2013, or on the day following such approval by the legislature, whichever is later.22
The original instrument was prepared by Nancy Vicknair. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Ann S. Brown.
DIGEST
Martiny (SB 14)
Present law provides for transfer of service credit between La. public retirement systems.
Specifies application procedures, calculations, and payment deadlines. Provides for
"reverse" transfers, but only coincident with retirement.
Proposed law retains present law and allows for certain in-service reverse transfers.
Requires that application for an in-service reverse transfer be submitted to the receiving SB NO. 14
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system on or before Dec. 31, 2013. Limits applicants for in-service reverse transfers to
persons who are not state employees.
Present law generally applicable to transfers specifies that the retirement benefit based on
the transferred time shall be calculated using the "percentage factor", commonly called the
"accrual rate", of the transferring system.
Present law relative to certain transfers to the Sheriffs' Pension and Relief Fund and the
secondary component and Hazardous Duty Services Plan of the La. State Employees'
Retirement System allows the member to purchase the (higher) accrual rate of the receiving
system's plan provisions. Provides for the calculation of the purchase price pursuant to
present law.
Proposed law retains present law and allows any person using the transfers authorized in
proposed law to purchase the accrual rate of the receiving system at a price calculated
pursuant to present law.
Proposed law, relative to members of the Firefighters' Retirement System (FRS), allows
employees of the St. George Fire Dept. who applied to transfer service credit from the New
Orleans Fire Firefighters' Pension and Relief Fund (NOFF) into FRS on or after Aug. 26,
1999, and on or before Dec. 31, 2007, to have the benefit accrual rate purchase permitted
pursuant to proposed law funded by their employer. Specifies that proposed law is
applicable only to that service credit transferred from NOFF during the designated time
frame. Provides that the Dept. shall pay an amount calculated pursuant to proposed law
which, on an actuarial basis, totally offsets the increase in accrued liability of FRS resulting
from the accrual rate adjustment.
Requires the adjusted accrual rate to be effective on the June 30
th
following the execution
of the agreement required in proposed law. Mandates that the increase in benefit shall not
be an accrued benefit subject to the protection of Article X, Section 29(E) of the Constitution
until FRS has received full payment.
Specifies that the transaction permitted by proposed law shall be treated as a merger of
service credit. Further requires the governing authorities of the Dept. and FRS to execute
a merger note to memorialize their respective obligations and requires the payments to be
amortized over the period of time applicable to mergers. Further requires the Dept. to make
annual level payments to FRS and requires the annual interest rate applicable to the note to
be fixed at 7.5%.
Requires that no funds derived from the assessments against insurers shall be used to pay
any increased costs or increase in liability of FRS resulting from the provisions of proposed
law.
Further requires that the provisions of proposed law shall not be construed to authorize an
increase in payments to any person receiving benefits before the effective date of proposed
law.
Effective June 30, 2013.
(Amends R.S. 11:143)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Retirement to the
original bill
1. Make technical changes. SB NO. 14
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Committee Amendments Proposed by Senate Committee on Finance to the
engrossed bill
1. Limits applicants for in-service reverse transfers to persons who are not state
employees.
Senate Floor Amendments to reengrossed bill
1. Make technical changes.