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Regular Session, 2013
SENATE BILL NO. 7
BY SENATOR PEACOCK
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT BENEFITS. Provides a sixty-month final average compensation period for
members of state and statewide retirement systems. (7/1/13)
AN ACT1
To amend and reenact R.S. 11:403(5), 416(A)(3)(a), 558(D), 701(5)(a)(introductory2
paragraph) and (b), 766(D), 1002(6), 1143(D), 1152(J)(3) and (4), 1310(A)(2),3
1402(6), 1422, 1902(14), 2031(5), 2178(B)(1)(b) and (3)(b), (C)(1)(c) and (4),4
(D)(3)(a)(i), and (H), 2213(4), 2220(A), 2221(K)(3)(a) and (b), 2252 (introductory5
paragraph) and (4), and 2257(K)(3)(a) and (b), and to repeal R.S. 11:231, relative to6
state and statewide public retirement systems; to provide for final average7
compensation or the equivalent; to provide for calculation of additional benefits8
following participation in a deferred retirement option plan or reemployment of a9
retiree; to provide for transitional provisions; to provide for an effective date; and to10
provide for related matters.11
Notice of intention to introduce this Act has been published.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 11:403(5), 416(A)(3)(a), 558(D), 701(5)(a)(introductory14
paragraph) and (b), 766(D), 1002(6), 1143(D), 1152(J)(3) and (4), 1310(A)(2),15
1402(6), 1422, 1902(14), 2031(5), 2178(B)(1)(b) and (3)(b), (C)(1)(c) and (4),16
(D)(3)(a)(i), and (H), 2213(4), 2220(A), 2221(K)(3)(a) and (b), 2252 (introductory17 SB NO. 7
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paragraph) and (4), and 2257(K)(3)(a) and (b) are hereby amended and reenacted to1
read as follows:2
§403. Definitions3
The following words and phrases used in this Chapter shall have the4
following meanings, unless a different meaning is clearly required by the context:5
* * *6
(5)(a)(i)"Average compensation", for a member whose first employment7
making him eligible for membership in the system began on or before June 30, 2006,8
and for any person who receives an additional benefit pursuant to R.S.9
11:444(A)(2)(b) or (c), 557, 582, or 602 or R.S. 24:36 whose first employment10
making him eligible for membership in one of the state systems occurred on or11
before December 31, 2010, means the average annual earned compensation of a state12
employee for the thirty-six highest months of successive employment, or for the13
highest thirty-six successive joined months of employment where interruption of14
service occurred; however, average compensation for part-time employees who do15
not use thirty-six months of full-time employme nt for average compensation16
purposes shall be based on the base pay the part-time employee would have received17
had he been employed on a full-time basis.18
(ii) The earnings to be considered for the thirteenth through the twenty-fourth19
month shall not exceed one hundred twenty-five percent of the earnings of the first20
through the twelfth month. The earnings to be considered for the final twelve21
months shall not exceed one hundred twenty-five percent of the earnings of the22
thirteenth through the twenty-fourth month. Nothing in this Subparagraph, however,23
shall change the method of determining the amount of earned compensation24
received.25
(b)(i) "Average compensation", for a member whose first employmen t26
making him eligible for membership in the system began on or after July 1, 2006,27
and subject to the limitations provided in this Subparagraph, regardless of a28
member's participation in a specialized subplan, means the average annual earned29 SB NO. 7
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compensation of a state employee for the sixty highest months of successive1
employment or for the highest sixty successive joined months of employment where2
interruption of service occurred; however, average compensation for part-time3
employees who do not use sixty months of full-time employment for average4
compensation purposes shall be based on the base pay the part-time employee would5
have received had he been employed on a full-time basis. This Item shall also be6
applicable to any judge, court officer, governor, lieutenant governor, clerk or7
sergeant-at-arms of the House of Representatives, secretary or sergeant-at-arms of8
the Senate, or state treasurer whose first employment making him eligible for9
membership in one of the state systems occurred on or after January 1, 2011.10
(ii) (b) The earnings to be considered for persons to whom Item (i) of this11
Subparagraph applies for the thirteenth through the twenty-fourth month shall not12
exceed one hundred fifteen percent of the earnings of the first through the twelfth13
month. The earnings to be considered for the twenty-fifth through the thirty-sixth14
month shall not exceed one hundred fifteen percent of the earnings of the thirteenth15
through the twenty-fourth month. The earnings to be considered for the thirty-16
seventh through the forty-eighth month shall not exceed one hundred fifteen percent17
of the earnings of the twenty-fifth through the thirty-sixth month. The earnings for18
the final twelve months shall not exceed one hundred fifteen percent of the earnings19
of the thirty-seventh through the forty-eighth month. The limitations on the20
computation of average compensation contained in this Item Subparagraph shall21
not apply to any twelve-month period during which compensation increased by more22
than fifteen percent over the previous twelve-month period solely because of an23
increase in compensation by a uniform systemwide increase adopted by the state24
Department of Civil Service and approved by the governor or because of a pay25
adjustment enacted by the legislature. This Item shall also be applicable to any26
judge, court officer, member of the Louisiana Legislature, governor, lieutenant27
governor, clerk or sergeant-at-arms of the House of Representatives, secretary or28
sergeant-at-arms of the Senate, or state treasurer whose first employment making29 SB NO. 7
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him eligible for membership in one of the state systems occurred on or after January1
1, 2011.2
(iii) The provisions of this Subparagraph shall not apply to any person who3
receives an additional benefit pursuant to R.S. 11:444(A)(2)(b) or (c), 557, 582, or4
602 or R.S. 24:36 whose first employment making him eligible for membership in5
one of the state systems occurred on or after January 1, 2011.6
* * *7
§416. Employment of retirees8
A. Regardless of age, if a retiree of the system is engaged or hereafter9
engages in employment which otherwise would render him eligible for membership10
in the system, he shall choose one of the following irrevocable options:11
* * *12
(3)(a) Option 3. The retiree may request immediate suspension of his benefit13
and become a member of this system, effective on the first day of reemployment.14
Upon such regaining of membership, he shall contribute thereafter at the current15
contribution rate as applicable to his position. Upon subsequent retirement, his16
suspended retirement allowance shall be restored to full force and effect. In addition,17
if he has worked and contributed for at least thirty-six months a period equal to or18
longer than his final average compensation period, his retirement allowance shall19
be increased by an amount attributable to his service and average compensation since20
reemployment based on the computation formula in effect at the time of subsequent21
retirement. If he has been reemployed for a period less than thirty-six months his22
final average compensation period, upon termination of reemployment the23
contributions paid by the retiree since his reemployment shall, upon application, be24
refunded to the retiree. In no event shall the member receive duplicate credit for25
unused sick and annual leave that had been included in the computation of his26
original retirement allowance. Any supplemental benefit shall be based on27
reemployment service credit only and shall not include any other specific amount28
which may otherwise be provided in the regular retirement benefit computation29 SB NO. 7
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formula. In the event of the member's death prior to subsequent retirement, payment1
of benefits to the designated beneficiary or survivor shall be in accordance with the2
option selected by the member at the time of his original retirement. No change in3
the option originally selected by the member shall be permitted except as provided4
in R.S. 11:446(C). In no event shall the supplemental benefit exceed an amount5
which, when combined with the original benefit, equals one hundred percent of the6
average compensation figure used to compute the supplemental benefit. Under no7
circumstances shall any person who has regained membership pursuant to the8
provisions of this Paragraph be allowed to purchase service credit for any period9
employed in the state service during which he continued to draw his retirement10
allowance.11
* * *12
§558. Eligibility for retirement13
Eligibility for retirement under this Part shall be as follows:14
* * *15
D. For purposes of computing retirement benefits for persons covered by this16
Subpart, "average compensation" means the average annual earned compensation of17
the member for any three years sixty months of creditable service during which such18
earned compensation was the highest.19
* * *20
§701. Definitions21
As used in this Chapter, the following words and phrases have the meanings22
ascribed to them in this Section unless a different meaning is plainly required by the23
context:24
* * *25
(5)(a) "Average compensation" subject to the other provisions of this26
Paragraph, for any teacher whose first employment making him eligible for27
membership in one of the state systems occurred on or before December 31, 2010,28
means the average earnable compensation of a teacher for the three highest29 SB NO. 7
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successive years of employment, or the highest three successive joined years of1
employment where interruption of service occurred. For any teacher whose first2
employment making him eligible for membership in one of the state systems3
occurred on or after January 1, 2011, "average compensation" means his the average4
earnable compensation of a teacher for the five highest successive years of5
employment, or the highest five successive joined years where interruption of service6
occurred. The computation of such average compensation shall be in accordance7
with the following guidelines:8
* * *9
(b) The thirty-six or sixty months used for average compensation, as the case10
may be, cannot cover a period when the member receives more than three years or11
five years of service credit respectively.12
* * *13
§766. Part-time employees; creditable service; benefit eligibility; computation of14
benefits15
* * *16
D. Average compensation for part-time employees who do not use thirty-six17
sixty months of full-time employment for average compensation purposes shall be18
based on the earnings the part-time employee would have received had he been19
employed on a full-time basis. However, any member who has more than one-half20
of his computed service credit by virtue of part-time employment shall have his21
average compensation limited to his average compensation as a part-time employee22
and shall not be allowed to use any compensation as a full-time employee in the23
computation of his average compensation.24
* * *25
§1002. Definitions26
As used in this Chapter, the following words and phrases shall have the27
meanings ascribed to them in this Section unless a different meaning is plainly28
required by the context:29 SB NO. 7
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* * *1
(6)(a) "Average compensation", for a member whose first employment2
making him eligible for membership in the system began on or before June 30, 2006,3
shall be based on the thirty-six highest successive months of employment, or on the4
highest thirty-six successive joined months of employment where interruption of5
service occurred; however, the average compensation amount to be considered for6
the first through the twelfth month shall not exceed the compensation for the7
immediately preceding twelve months by more than ten percent. The amount for the8
thirteenth through the twenty-fourth month shall not exceed the lesser of the9
maximum allowable compensation amount or the actual compensation amount for10
the first through the twelfth month by more than ten percent. The amount for the11
twenty-fifth through the thirty-sixth month shall not exceed the lesser of the12
maximum allowable compensation amount or the actual compensation amount for13
the thirteenth through the twenty-fourth month by more than ten percent. The14
limitations on the computation of average compensation in this Paragraph shall not15
apply to any of the twelve-month periods where compensation increased by more16
than one hundred ten percent over the previous twelve-month period solely because17
of an increase in compensation by legislative act or by a city/parish system-wide18
salary increase.19
(b) "Average compensation", for a member whose first employment making20
him eligible for membership in the system began on or after July 1, 2006, whose first21
employment making him eligible for membership in one of the state systems22
occurred on or before June 30, 2010, shall be based on the sixty highest successive23
months of employment, or on the highest sixty successive joined months of24
employment where interruption of service occurred; however, the average25
compensation amount for the thirteenth through the twenty-fourth month shall not26
exceed the actual compensation amount for the first through the twelfth month by27
more than ten percent. The amount for the twenty-fifth through the thirty-sixth28
month shall not exceed the lesser of the maximum allowable compensation amount29 SB NO. 7
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or the actual compensation amount for the thirteenth through the twenty-fourth1
month by more than ten percent. The amount for the thirty-seventh through the2
forty-eighth month shall not exceed the lesser of the maximum allowable3
compensation amount or the actual compensation amount for the twenty-fifth4
through the thirty-sixth month by more than ten percent. The amount for the forty-5
ninth through the sixtieth month shall not exceed the lesser of the maximum6
allowable compensation amount or the actual compensation amount for the thirty-7
seventh through the forty-eighth month by more than ten percent. The limitations8
on the computation of average compensation contained in this Paragraph shall not9
apply to any twelve-month period during which compensation increased by more10
than one hundred ten percent over the previous twelve-month period solely because11
of an increase in compensation by legislative act or by a city/parish system-wide12
salary increase.13
(c) "Average compensation", for a member whose first employment making14
him eligible for membership in one of the state systems occurred on or after July 1,15
2010, shall be based on the sixty highest successive months of employment, or on16
the highest sixty successive joined months of employment where interruption of17
service occurred;.18
however, (i) For a member whose first employment making him eligible19
for membership in the system began on or before June 30, 2010, the average20
compensation amount for the thirteenth through the twenty-fourth month shall21
not exceed the actual compensation amount for the first through the twelfth22
month by more than ten percent. The amount for the twenty-fifth through the23
thirty-sixth month shall not exceed the lesser of the maximum allowable24
compensation amount or the actual compensation amount for the thirteenth25
through the twenty-fourth month by more than ten percent. The amount for26
the thirty-seventh through the forty-eighth month shall not exceed the lesser of27
the maximum allowable compensation amount or the actual compensation28
amount for the twenty-fifth through the thirty-sixth month by more than ten29 SB NO. 7
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percent. The amount for the final twelve months shall not exceed the lesser of1
the maximum allowable compensation amount or the actual compensation2
amount for the thirty-seventh through the forty-eighth month by more than ten3
percent. The limitations on the computation of average compensation contained4
in this Item shall not apply to any twelve-month period during which5
compensation increased by more than ten percent over the previous6
twelve-month period solely because of an increase in compensation by legislative7
act or by a city/parish system-wide salary increase.8
(ii) For a member whose first employment making him eligible for9
membership in the system began on or after July 1, 2010, the average10
compensation amount for the thirteenth through the twenty-fourth month shall not11
exceed the actual compensation amount for the first through the twelfth month by12
more than fifteen percent. The amount for the twenty-fifth through the thirty-sixth13
month shall not exceed the lesser of the maximum allowable compensation amount14
or the actual compensation amount for the thirteenth through the twenty-fourth15
month by more than fifteen percent. The amount for the thirty-seventh through the16
forty-eighth month shall not exceed the lesser of the maximum allowable17
compensation amount or the actual compensation amount for the twenty-fifth18
through the thirty-sixth month by more than fifteen percent. The amount for the19
forty-ninth through the sixtieth month shall not exceed the lesser of the maximum20
allowable compensation amount or the actual compensation amount for the thirty-21
seventh through the forty-eighth month by more than fifteen percent. The limitations22
on the computation of average compensation contained in this Subparagraph Item23
shall not apply to any twelve-month period during which compensation increased by24
more than one hundred fifteen percent, over the previous twelve-month period solely25
because of an increase in compensation by legislative act or by a city/parish26
system-wide salary increase.27
(d)(b) Notwithstanding any other provision of law to the contrary, "average28
compensation" shall not include any amount in excess of the limitation provided in29 SB NO. 7
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R.S. 11:1141.3.1
* * *2
§1143. Part-time employees; creditable service; benefit eligibility; computation of3
benefits4
* * *5
D. Average compensation for part-time employees who do not use thirty-six6
sixty months of full-time employment for average compensation purposes shall be7
based on the earnings the part-time employee would have received had he been8
employed on a full-time basis. However, any member who has more than one-half9
of his computed service credit by virtue of part-time employment shall have his10
average compensation limited to his average compensation as a part-time employee11
and shall not be allowed to use any compensation as a full-time employee in the12
computation of his average compensation.13
* * *14
§1152. Deferred Retirement Option Plan15
* * *16
J. Monthly retirement benefits payable to a participant after termination of17
participation in the plan and employment shall be calculated as follows:18
* * *19
(3)(a) If the participant, whose first employment making him eligible for20
membership in the system began on or before June 30, 2006, continues employment21
after termination of participation in the plan for a period of less than thirty-six22
months his final average compensation period, his monthly retirement benefit shall23
equal his base benefit plus an amount based upon the service credit for the additional24
employmen t, together with conversion of the net amount of sick and annual leave25
accumulated during that period of employment, based upon the final average26
compensation used to calculate the monthly credit.27
(b) If the participant, whose first employment making him eligible for28
membership in the system began on or after July 1, 2006, continues employment29 SB NO. 7
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after termination of participation in the plan for a period of less than sixty months,1
his monthly retirement benefit shall equal his base benefit plus an amount based2
upon the service credit for the additional employment, together with conversion of3
the net amount of sick and annual leave accumulated during that period of4
employment, based upon the final average compensation used to calculate the5
monthly credit.6
(4)(a) If the participant, whose first employment making him eligible for7
membership in the system began on or before June 30, 2006, continues employment8
after termination of participation in the plan for a period of thirty-six months or more9
equal to or longer than his final average compensation period, his monthly10
retirement benefit shall equal his base benefit plus an amount based upon the service11
credit for the additional employment, together with conversion of the net amount of12
sick and annual leave accumulated during that period of employment, based upon the13
higher of the final average compensation when the member entered the plan or for14
the period of employment after termination of participation in the plan.15
(b) If the participant, whose first employm ent making him eligible for16
membership in the system began on or after July 1, 2006, continues employment17
after termination of participation in the plan for a period of sixty months or more, his18
monthly retirement benefit shall equal his base benefit plus an amount based upon19
the service credit for the additional employment, together with conversion of the net20
amount of sick and annual leave accumulated during that period of employment,21
based upon the higher of the final average compensation when the member entered22
the plan or for the period of employment after termination of participation in the23
plan.24
* * *25
§1310. Average salary; method of determining 26
A.(1) * * *27
(2)(a) With respect to persons becoming employed on and after September28
8, 1978, and whose first employment making them eligible for membership in one29 SB NO. 7
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of the state systems occurred on or before December 31, 2010, the term "average salary" as1
used in this Chapter for the purpose of determining pension payments and retirement is the2
average salary including any additional pay or salary provided by the legislature over and3
above that set by the Civil Service Commission, received for the thirty-six sixty month4
period ending on the last day of the month immediately preceding the date of retirement or5
date of death or for any thirty-six sixty consecutive months, whichever is the greatest. For6
the purposes of computation, "average salary" shall not include overtime, expenses, or7
clothing allowances.8
(b) The earnings to be considered for the thirteenth through the twenty-fourth9
month shall not exceed one hundred twenty-five fifteen percent of the earnings of10
the first through the twelfth month. The earnings to be considered for the twenty-11
fifth through the thirty-sixth month shall not exceed one hundred fifteen12
percent of the earnings of the thirteenth through the twenty-fourth month. The13
earnings to be considered for the thirty-seventh through the forty-eighth month14
shall not exceed one hundred fifteen percent of the earnings of the twenty-fifth15
through the thirty-sixth month. The earnings to be considered for the final twelve16
months shall not exceed one hundred twenty-five fifteen percent of the earnings of17
the thirteenth thirty-seventh through the twenty-fourth forty-eighth month.18
Nothing in this Subparagraph, however, shall change the method of determining the19
amount of earned compensation received.20
* * *21
§1402. Definitions22
As used in this Chapter, the following words and phrases shall have the23
meanings ascribed to them unless the context clearly indicates otherwise:24
* * *25
(6)(a) "Monthly average final compensation", for a member whose first26
employment making him eligible for membership in the system began on or before27
September 30, 2006, means the average of a member's monthly salary during the28
highest compensated thirty-six consecutive months or successive joined months if29 SB NO. 7
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service was interrupted.1
(b) "Monthly average final compensation", for a member whose first2
employment making him eligible for membership in the system began on or after3
October 1, 2006, means the average of a member's monthly salary during the highest4
compensated sixty consecutive months or successive joined months if service was5
interrupted. The earnings to be considered for the thirteenth through the6
twenty-fourth month shall not exceed one hundred fifteen percent of the7
earnings of the first through the twelfth month. The earnings to be considered8
for the twenty-fifth through the thirty-sixth month shall not exceed one hundred9
fifteen percent of the earnings of the thirteenth through the twenty-fourth10
month. The earnings to be considered for the thirty-seventh through the forty-11
eighth month shall not exceed one hundred fifteen percent of the earnings for12
the twenty-fifth through the thirty-sixth month. The earnings to be considered13
for the final twelve months shall not exceed one hundred fifteen percent of the14
earnings of the thirty-seventh through the forty-eighth month.15
(c)(b) Compensation of a member in excess of one hundred fifty thousand16
dollars, as adjusted for increases in the cost of living under Section 401(a)(17)(B) of17
the Internal Revenue Code shall not be taken into account for years beginning on or18
after January 1, 1994, and ending before January 1, 2002. Compensation of a19
member in excess of two hundred thousand dollars as adjusted for increases in the20
cost of living under Section 401(a)(17)(B) of the Internal Revenue Code shall not be21
taken into account for years beginning on or after January 1, 2002. However, in22
determining monthly average final compensation for a member retiring on or after23
January 1, 2002, compensation which is permitted to be taken into account on or24
after January 1, 2002, but which occurred in a prior year that was included in the25
averaging period shall be taken into account. This limitation may be adjusted from26
time to time by rules promulgated by the board in accordance with the provisions of27
the Administrative Procedure Act, R.S. 49:950 et seq.28
(d)(c) For purposes of compliance with federal tax-qualification29 SB NO. 7
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requirements, the board may promulgate rules further defining "compensation" and1
"Section 415 compensation", in accordance with the provisions of the Administrative2
Procedure Act.3
* * *4
§1422. Computation of normal retirement benefit5
A. Any member whose first employment making him eligible for6
membership in the system began on or before September 30, 2006, and who is7
eligible for normal retirement shall, upon making written application to the board of8
trustees, be retired, and shall be paid a monthly sum equal to three and one-third9
percent of the highest monthly average final compensation received during any10
thirty-six consecutive months while employed in an assessor's office or other11
creditable employment times the number of years of the member's creditable service12
not to exceed one hundred percent of the member's monthly average final13
compensation, after taking into account the reduction arising from any optional14
retirement selected.15
B. Any member whose first employment making him eligible for16
membership in the system began on or after October 1, 2006, and who is eligible for17
normal retirement shall, upon making written application to the board of trustees, be18
retired, and shall be paid a monthly sum equal to three and one-third percent of the19
highest monthly average final compensation received during any sixty consecutive20
months while employed in an assessor's office or other creditable employment times21
the number of years of the member's creditable service not to exceed one hundred22
percent of the member's monthly average final compensation after taking into23
account the reduction arising from any optional retirement selected.24
* * *25
§1902. Definitions26
As used in this Chapter, the following words and phrases shall have the27
following meanings, unless a different meaning is plainly required by context:28
* * *29 SB NO. 7
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(14)(a) "Final compensation", for members hired on or before December 31,1
2006, means the average monthly earnings during the highest thirty-six consecutive2
months or joined months if service was interrupted. The earnings to be considered3
for the thirteenth through the twenty-fourth month shall not exceed one hundred4
fifteen percent of the earnings of the first through the twelfth month. The earnings5
to be considered for the final twelve months shall not exceed one hundred fifteen6
percent of the earnings of the thirteenth through the twenty-fourth month.7
(b) For members hired on or after January 1, 2007, "final compensation"8
means the average monthly earnings during the sixty highest consecutive months of9
employment or the sixty highest successive joined months of employment if10
interruption of service occurred. The earnings to be considered for the thirteenth11
through the twenty-fourth month shall not exceed one hundred fifteen percent of the12
earnings for the first through the twelfth month. The earnings to be considered for13
the twenty-fifth through the thirty-sixth month shall not exceed one hundred fifteen14
percent of the earnings for the thirteenth through the twenty-fourth month. The15
earnings to be considered for the thirty-seventh through the forty-eighth month shall16
not exceed one hundred fifteen percent of the earnings for the twenty-fifth through17
the thirty-sixth month. The earnings to be considered for the final twelve months18
shall not exceed one hundred fifteen percent of the earnings for the thirty-seventh19
through the forty-eighth month.20
* * *21
§2031. Definitions22
The following words and phrases, as used in this Chapter, unless a different23
meaning is plainly required by the context, shall have the following meanings:24
* * *25
(5) "Average compensation" shall mean the average annual earned26
compensation of an employee for any period of sixty successive or joined months of27
service as an employee during which earned compensation was the highest. In case28
of interruption of employment, the sixty-month period shall be computed by joining29 SB NO. 7
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employment periods immediately preceding and succeeding the interruption. The1
earnings to be considered for the thirteenth through the twenty-fourth month2
shall not exceed one hundred fifteen percent of the earnings of the first through3
the twelfth month. The earnings to be considered for the twenty-fifth through4
the thirty-sixth month shall not exceed one hundred fifteen percent of the5
earnings of the thirteenth through the twenty-fourth month. The earnings to6
be considered for the thirty-seventh through the forty-eighth month shall not7
exceed one hundred fifteen percent of the earnings of the twenty-fifth through8
the thirty-sixth month. The earnings to be considered for the final twelve9
months shall not exceed one hundred fifteen percent of the earnings of the10
thirty-seventh through the forty-eighth month.11
* * *12
§2178. Disability benefits; retirement benefits; death benefits13
* * *14
B. The board of trustees shall award disability benefits to eligible members15
who have been officially certified as disabled by the State Medical Disability Board.16
The disability benefit shall be as follows:17
* * *18
(1) Service related disability benefit.19
* * *20
(b)(i) For the purpose of this Subsection Paragraph, for any member whose21
first employment making him eligible for membership in the system began prior to22
July 1, 2006, final average compensation is defined as the member's average salary23
for the thirty-six highest successive months of employment, or the highest thirty-six24
successive joined months of employment where interruption of service occurred. If25
the member has been employed for a period of less than thirty-six months, final26
average compensation shall be based on the average monthly salary received for the27
time employed.28
(ii) For the purpose of this Subsection, for any member whose first29 SB NO. 7
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employment making him eligible for membership in the system began on or after1
July 1, 2006, final average compensation is defined as the member's average salary2
for the sixty highest successive months of employment, or the highest sixty3
successive joined months of employment where interruption of service occurred. If4
the member has been employed for a period of less than sixty months, final average5
compensation shall be based on the average monthly salary received for the time6
employed.7
* * *8
(3) Non service related disability.9
* * *10
(b)(i) For the purpose of this Subsection Paragraph, for any member whose11
first employment making him eligible for membership in the system began prior to12
July 1, 2006, final compensation is defined as the member's average salary for the13
thirty-six highest successive months of employment, or the highest thirty-six14
successive joined months of employment where interruption of service occurred. If15
the member has been employed for a period of less than thirty-six months, final16
average compensation shall be based on the average monthly salary received for the17
time employed.18
(ii) For the purpose of this Subsection, for any member whose first19
employment making him eligible for membership in the system began on or after20
July 1, 2006, final average compensation is defined as the member's average salary21
for the sixty highest successive months of employment, or the highest sixty22
successive joined months of employment where interruption of service occurred. If23
the member has been employed for a period of less than sixty months, final average24
compensation shall be based on the average monthly salary received for the time25
employed.26
(iii)(ii) Upon approval for disability benefits, the member shall exercise a27
retirement option as provided for service retirement under the provisions of28
Subsection I of this Section and no change in the option selected shall be permitted29 SB NO. 7
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after it has been filed with the board. The retirement option factors shall be the same1
as those utilized for regular retirement based on the age of the retiree and spouse had2
the retiree continued in active service until the normal retirement date.3
* * *4
C.(1)(a) * * *5
(c)(i) A member whose first employment making him eligible for6
membership in the system began on or before June 30, 2006, shall be paid a monthly7
sum equal to three and one-third percent of the member's average monthly salary for8
the thirty-six highest successive months of employment, or the highest thirty-six9
successive joined months of employment where interruption of service occurred,10
multiplied by the number of years of creditable service in the fund.11
(ii) A member whose first employment making him eligible for membership12
in the system began on or after July 1, 2006, but prior to January 1, 2012, shall be13
paid a monthly sum equal to three and one-third percent of the member's average14
monthly salary for the sixty highest successive months of employment, or the highest15
sixty successive joined months of employment where interruption of service16
occurred, multiplied by the number of years of creditable service in the fund.17
(iii) (ii) A member whose first employment making him eligible for18
membership in the system began on or after January 1, 2012, shall be paid a monthly19
sum equal to three percent of the member's average monthly salary for the sixty20
highest successive months of employme nt, or the highest sixty successive joined21
months of employment where interruption of service occurred, multiplied by the22
number of years of creditable service in the fund.23
(iv)(iii)(aa) Notwithstanding the provisions of Item (iii)(ii) of this24
Subparagraph, a member whose first employment making him eligible for25
membership in the system began on or after January 1, 2012, who retires with thirty26
or more years of creditable service or any member who in the performance of his27
official duties as a commissioned law enforcement officer suffers a violent act or28
accident during the pursuit, apprehension, or arrest of a criminal suspect and as a29 SB NO. 7
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result becomes totally and permanently disabled or dies, shall be paid a monthly sum1
equal to three and one-third percent of the member's average monthly salary for the2
sixty highest successive months of employment, or the highest sixty successive3
joined months of employment where interruption of service occurred, multiplied by4
the number of years of creditable service in the fund.5
(bb) Creditable service maintained pursuant to a reciprocal agreement in6
another system, fund, or plan shall not be used to meet the requirement of thirty or7
more years of creditable service.8
(cc) Transferred service with an accrual rate of less than three and one-third9
percent shall not be used to meet the requirement of thirty or more years of creditable10
service unless the member elects to purchase the accrual rate for application to his11
transferred credit pursuant to the provisions of R.S. 11:2174.2.12
* * *13
(4)(a) For those members whose first employment making them eligible for14
membership in the system began prior to July 1, 2006, the retirement pension under15
this Subsection shall in no case exceed the average monthly salary for the thirty-six16
highest successive months of employment, or the highest thirty-six successive joined17
months of employment where interruption of service occurred.18
(b) For those members whose first employment making them eligible for19
membership in the system began on or after July 1, 2006, the The retirement pension20
under this Subsection shall in no case exceed the average monthly salary for the sixty21
highest successive months of employment, or the highest sixty successive joined22
months of employment where interruption of service occurred.23
* * *24
D. Death Benefits.25
* * *26
(3) The following death benefits are applicable and shall be paid to those27
survivors hereinafter defined in Subsection E of this Section when death occurred on28
or subsequent to September 10, 1982; the death benefits provided herein to a sheriff29 SB NO. 7
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or deputy drawing disability benefits are applicable only to those disability retirees1
who were placed on disability prior to September 8, 1988.2
(a) If any sheriff or deputy is killed in the discharge of his duties, or dies from3
immediate effects of any injury received as the result of an act of violence occurring4
while engaged in the discharge of his duties or while drawing disability benefits, the5
board shall direct payment from the fund monthly, but in no event an amount greater6
than the disability benefit previously paid to the retiree under disability, on the7
following basis:8
(i) For a widow alone, or for a widower alone, a sum equal to fifty percent9
of the said sheriff's or deputy's final average compensation as defined in Subsection10
B of this Section, or of his or her average monthly salary for the time of his or her11
employment, if employed for a shorter period than thirty-six sixty months, which12
payment in no event shall be less than one hundred fifty dollars per month.13
* * *14
H.(1) The word "salary" as used in this Section shall mean monies received15
by the sheriff or deputy sheriff, directly from the respective sheriffs' general funds16
for duties performed as a sheriff or deputy sheriff, including for sheriffs the expense17
allowance provided by law.18
(2) For purposes of any benefit calculation pursuant to this Section which19
utilizes final average compensation, the earnings to be considered for the20
thirteenth through the twenty-fourth month shall not exceed one hundred21
fifteen percent of the earnings of the first through the twelfth month. The22
earnings to be considered for the twenty-fifth through the thirty-sixth month23
shall not exceed one hundred fifteen percent of the earnings of the thirteenth24
through the twenty-fourth month. The earnings to be considered for the thirty-25
seventh through the forty-eighth month shall not exceed one hundred fifteen26
percent of the earnings of the twenty-fifth through the thirty-sixth month. The27
earnings for the final twelve months shall not exceed one hundred fifteen28
percent of the earnings of the thirty-seventh through the forty-eighth month.29 SB NO. 7
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* * *1
§2213. Definitions2
The following words and phrases, as used in this Chapter, unless a different3
meaning is plainly required by context, shall have the following meanings:4
* * *5
(4)(a) For members first employed on or before December 31, 2012, "average6
final compensation" shall mean the average annual earned compensation of an7
employee for any period of thirty-six successive or joined months of service as an8
employee during which the said earned compensation was the highest. In case of9
interruption of employment, the thirty-six month period shall be computed by joining10
employment periods immediately preceding and succeeding the interruption. The11
earnings to be considered for the thirteenth through the twenty-fourth months shall12
not exceed one hundred fifteen percent of the earnings for the first through the13
twelfth months. The earnings to be considered for the final twelve months shall not14
exceed one hundred fifteen percent of the earnings of the thirteenth through the15
twenty-fourth months.16
(b) For members first employed on or after January 1, 2013, "average17
"Average final compensation" means the average annual earned compensation of18
a member for the sixty highest months of successive employment, or for the highest19
sixty successive joined months of employment where interruption of service20
occurred. The earnings to be considered for the thirteenth through the twenty-fourth21
month shall not exceed one hundred fifteen percent of the earnings of the first22
through the twelfth month. The earnings to be considered for the twenty-fifth23
through the thirty-sixth month shall not exceed one hundred fifteen percent of the24
earnings of the thirteenth through the twenty-fourth month. The earnings to be25
considered for the thirty-seventh through the forty-eighth month shall not exceed one26
hundred fifteen percent of the earnings of the twenty-fifth through the thirty-sixth27
month. The earnings for the final twelve months shall not exceed one hundred28
fifteen percent of the earnings of the thirty-seventh through the forty-eighth month.29 SB NO. 7
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The limitations on the computation of average final compensation contained in this1
Subparagraph Paragraph shall not apply to any twelve-month period during which2
compensation increased by more than fifteen percent over the previous twelve-month3
period solely because of an increase in compensation by a uniform systemwide4
increase adopted by a local governing authority.5
* * *6
§2220. Benefits; contribution limit7
A. Eligibility for normal retirement, early retirement, and limitations.8
(1)(a) Any member of this system who has completed at least twenty-five9
years of service regardless of age, or any member who has completed at least twenty10
years of service and has attained the age of fifty years, or any member who has11
completed at least twelve years of service and has attained age fifty-five, shall be12
entitled to retire from service and upon such retirement shall be paid a retirement13
allowance equal to three and one-third percent of his average final compensation14
multiplied by his years of creditable service not to exceed one hundred percent of his15
average final compensation.16
(b) Any member who has completed twenty or more years of creditable17
service, and who leaves employment covered by the Municipal Police Employees'18
Retirement System before attaining age fifty, shall be entitled to a retirement benefit19
beginning at age fifty. However, any member who has completed twenty years of20
creditable service shall be entitled to elect early retirement and receive an actuarially21
reduced retirement benefit. This provision shall not be construed to relieve any22
municipality of the obligation under any merger agreement of paying benefits to23
merged members until the attainment of eligibility for normal or early retirement in24
this system. Additionally, any member retiring under this provision shall not be25
eligible for a cost-of-living adjustment until one full fiscal year after attaining normal26
retirement eligibility as set out in Paragraph Subparagraph (1)(a) of this Subsection,27
nor shall the member be eligible to participate in the Deferred Retirement Option28
Plan.29 SB NO. 7
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(c) Any member who has completed twelve years of creditable service, and1
who leaves employment covered by the Municipal Police Employees' Retirement2
System before attaining age fifty-five, shall be entitled to a retirement benefit3
beginning at age fifty-five.4
(d) Any member of this system who has received free prior service credit in5
this system must have been a contributing member of this system for at least one6
year prior to being eligible for a regular retirement benefit.7
(e) (2)(a) Regardless of age, if a retiree of this system becomes an employee8
as defined in R.S. 11:2213(11), payment of retirement benefits shall be suspended9
and the employee and employer shall contribute to the system toward creditable10
service.11
(f) (b) Upon termination of reemployment, the monthly benefit which had12
been suspended shall resume being paid to the retiree. The retiree may not change13
the option which was elected under the original retirement computation.14
(g) (c) Upon termination of reemployment, the retiree shall receive an15
additional retirement benefit based on his additional service rendered since16
reemployment using the normal method of computation of benefits or as provided17
in Subparagraph (h) (d) of this Paragraph, subject to the following:18
(i) If the period of additional service was less than thirty-six months his19
average final compensation period, the average compensation figure used to20
calculate the additional benefit shall be that used to calculate his original benefit.21
(ii) If the period of additional service was thirty-six or more months equal22
to or longer than his average final compensation period, the average23
compensation figure used to calculate the additional benefit shall be based on his24
average compensation earned during the period of additional service.25
(iii) The option used shall be that applicable to the original benefit.26
(iv) In no event shall the additional benefit exceed an amount which, when27
combined with the original benefit, equals one hundred percent of the average28
compensation figure used to compute the additional benefit.29 SB NO. 7
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(v) If the member dies or becomes disabled during the period of additional1
service, he shall be considered as having retired on the date of death or2
commencement of disability.3
(vi) In no event shall an a reemployed retiree who becomes reenrolled in the4
system under the provisions of this Section Paragraph be allowed to participate in5
the deferred retirement option plan.6
(h) (d) Initial benefit option:7
(i) The retiree may elect to receive the additional retirement benefit payable8
pursuant to Subparagraph (g)(c) of this Paragraph as an initial benefit plus a reduced9
monthly retirement allowance equal to the actuarially equivalent amount of his10
maximum additional retirement benefit.11
(ii) The initial benefit, as elected by the retiree, shall not exceed an amount12
equal to thirty-six payments of his maximum additional retirement benefit.13
(iii) The retiree, at his option, shall receive the initial benefit as a lump-sum14
payment, or it shall be placed in a liquid asset money market investment account15
established in accordance with the same procedures set forth in R.S. 11:2221.16
(iv) The additional benefit received by the retiree and the beneficiary or17
survivor shall be actuarially reduced by a prorated amount calculated to offset the18
cost of the initial benefit payment.19
(v) Cost-of-living adjustments shall not be payable on the retiree's initial20
benefit.21
(2)(3) When any municipality merges its active members into the system, the22
persons merged shall not be eligible to receive a benefit from the system until one23
year after the effective date of the merger. However, if a member who is merged into24
the system, would normally be eligible to retire based on his age and total years of25
service credit, prior to one year after the merger, he may retire, and the benefits shall26
be the obligation of the municipality until one year after the date of the merger. 27
* * *28
§2221. Deferred Retirement Option Plan29 SB NO. 7
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* * *1
K. The following shall also apply if employment is not terminated at the end2
of the period of participation:3
* * *4
(3) Upon termination of employment, he shall receive an additional5
retirement benefit based on his additional service rendered since termination of6
participation in the fund, using the normal method of computation of benefit, subject7
to the following: 8
(a) If his period of additional service was less than thirty-six months his9
average final compensation period, the average compensation figure used to10
calculate the additional benefit shall be that used to calculate his original benefit.11
(b) If his period of additional service was thirty-six or more months equal to12
or longer than his average final compensation period, the average compensation13
figure used to calculate the additional benefit shall be based on his compensation14
during the period of additional service.15
* * *16
§2252. Definitions17
The following words and phrases, as used in this Chapter, unless a different18
meaning is plainly required by context, shall have the following meaning s:19
* * *20
(4) "Average final compensation" shall mean the average annual earned21
compensation of an employee for any period of thirty-six sixty successive or joined22
months of service as an employee during which the said earned compensation was23
the highest. In case of interruption of employment, the thirty-six sixty-month period24
shall be computed by joining employment periods immediately preceding and25
succeeding the interruption. The earnings to be considered for the thirteenth through26
the twenty-fourth months shall not exceed one hundred fifteen percent of the27
earnings for of the first through the twelfth months. The earnings to be considered28
for the twenty-fifth through the thirty-sixth month shall not exceed one hundred29 SB NO. 7
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fifteen percent of the earnings of the thirteenth through the twenty-fourth1
month. The earnings to be considered for the thirty-seventh through the forty-2
eighth month shall not exceed one hundred fifteen percent of the earnings of the3
twenty-fifth through the thirty-sixth month. The earnings to be considered for the4
final twelve months shall not exceed one hundred fifteen percent of the earnings of5
the thirteenth thirty-seventh through the twenty-fourth forty-eighth months.6
* * *7
§2257. Deferred retirement option plan8
* * *9
K.(1) * * *10
(3) Upon termination of employment, he shall receive an additional11
retirement benefit based on his additional service rendered since termination of12
participation in the fund, using the normal method of computation of benefit, subject13
to the following:14
(a) If his period of additional service is less than thirty-six sixty months, the15
average compensation figure used to calculate the additional benefit shall be that16
used to calculate his original benefit.17
(b) If his period of additional service is thirty-six sixty or more months, the18
average compensation figure used to calculate the additional benefit shall be based19
on his compensation during the period of additional service.20
* * *21
Section 2. R.S. 11:231 is hereby repealed.22
Section 3. This Act shall be implemented according to the provisions of this Section.23
(A) For transitional purposes, the provisions of this Act shall be phased in as follows:24
(1) For members retiring or entering the Deferred Retirement Option Plan before25
January 1, 2014, the provisions of this Act shall not apply.26
(2) For those members retiring or entering the Deferred Retirement Option Plan on27
or after January 1, 2014, and on or before December 31, 2015, the period used to calculate28
monthly final average compensation or its equivalent shall be thirty-six months plus the29 SB NO. 7
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number of whole months since January 1, 2014.1
(B) Notwithstanding any other provision of this Section to the contrary, the monthly2
final compensation expressed in dollars used to compute a member's benefit after the3
effective date of this Act shall not be less than the dollar amount of the average monthly4
earnings during the member's highest thirty-six consecutive months or joined months of5
service earned for employment before January 1, 2014.6
Section 4. This Act shall become effective July 1, 2013; if vetoed by the governor7
and subsequently approved by the legislature, this Act shall become effective on July 1,8
2013, or on the day following such approval by the legislature, whichever is later.9
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Margaret M. Corley.
DIGEST
Present law provides for the final average compensation of members of each state or
statewide public retirement system to be computed using either a 36-month period or a 60-
month period. Proposed law provides that all members shall have a 60-month final average
compensation period for the calculation of their benefits.
Proposed law requires that any supplemental or additional benefit earned for continued
employment after participation in a deferred retirement option plan (DROP) or for
reemployment of a retiree shall be calculated using the same period as that member's original
final average compensation period.
Present law provides for "anti-spiking" thresholds which function to prevent a member from
contributing at a high salary for a brief period but having the high salary used to calculate
benefits. Present law provisions prohibit the compensation of each 12-month period used for
benefit calculation from exceeding the previous 12-month period by more than a certain
percent, generally between 10% and 25%.
Proposed law sets 15% as the maximum anti-spiking threshold for all members, generally
stating that the compensation used in the benefit calculation for one 12-month period shall
not exceed 115% of the compensation used for the preceding 12 months.
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, 2014, present
law applies. For members retiring or entering DROP on or after Jan. 1, 2014, and on or
before Dec. 31, 2015, proposed law provides that the period used to calculate monthly
average final compensation shall be 36 months plus the number of whole months since Jan.
1, 2014. 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, 2013.
(Amends R.S. 11:403(5), 416(A)(3)(a), 558(D), 701(5)(a)(intro para) and (b), 766(D),
1002(6), 1143(D), 1152(J)(3) and (4), 1310(A)(2), 1402(6), 1422, 1902(14), 2031(5),
2178(B)(1)(b) and (3)(b), (C)(1)(c) and (4), (D)(3)(a)(i), and (H), 2213(4), 2220(A), SB NO. 7
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2221(K)(3)(a) and (b), 2252 (intro para) and (4), and 2257(K)(3)(a) and (b), and repeals R.S.
11:231)