Martiny (SB 14) Act No. 365
Prior law provided for transfer of service credit between La. public retirement systems.
Specified application procedures, calculations, and payment deadlines. Provided for
"reverse" transfers, but only coincident with retirement.
New law retains prior law and allows for certain in-service reverse transfers. Requires that
application for an in-service reverse transfer be submitted to the receiving system on or
before Dec. 31, 2013. Limits applicants for in-service reverse transfers to persons who are
not state employees.
Prior law generally applicable to transfers specified 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.
Prior 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, allowed the member to purchase the (higher) accrual rate of the receiving
system's plan provisions. Provided for the calculation of the purchase price pursuant to prior
law.
New law retains prior law and allows any person using the transfers authorized in new law
to purchase the accrual rate of the receiving system at a price calculated pursuant to prior
law.
New law, relative to members of the Firefighters' Retirement System (FRS), allows
employees of the St. George Fire Department 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 new law funded by their employer. Specifies that new law is applicable only to
that service credit transferred from NOFF during the designated time frame. Provides that
the department shall pay an amount calculated pursuant to new 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 new 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 new law shall be treated as a merger of service
credit. Further requires the governing authorities of the department 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 department 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 new law.
Further requires that the provisions of new law shall not be construed to authorize an increase
in payments to any person receiving benefits before the effective date of new law.
Effective June 30, 2013.
(Amends R.S. 11:143)