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), 2221(K)(3)(a) and (b), 2252
(intro para) and (4), and 2257(K)(3)(a) and (b), and repeals R.S. 11:231)