HLS 14RS-378 ENGROSSED
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are additions.
Regular Session, 2014
HOUSE BILL NO. 39
BY REPRESENTATIVE PEARSON
RETIREMENT/ASSESSORS: Provides relative to the Back-Deferred Retirement Option
Plan (Back-DROP) in the Louisiana Assessors' Retirement Fund
AN ACT1
To enact R.S. 11:1456.1(E), relative to Back-Deferred Retirement Option Plan in the2
Louisiana Assessors' Retirement Fund; to provide relative to lump-sum distributions3
from such plan; to authorize transfers to a third-party provider; to provide relative4
to contracts to manage such funds; to provide relative to the rights, duties, and5
obligations of participants, providers, the fund, and the state; and to provide for6
related matters.7
Notice of intention to introduce this Act has been published8
as provided by Article X, Section 29(C) of the Constitution9
of Louisiana.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 11:1456.1(E) is hereby enacted to read as follows: 12
ยง1456.1. Back-Deferred Retirement Option Program13
* * *14
E.(1) In lieu of receiving a lump-sum benefit payment as set forth in15
Paragraph (D)(3) of this Section, the member may elect to transfer the lump-sum16
payment into a self-directed account managed by a third-party provider.17
(2) The board may hire a third-party provider to manage the self-directed18
accounts authorized by this Subsection. The third-party provider shall act as an agent19
of the fund for purposes of investing balances in the self-directed accounts of the20 HLS 14RS-378 ENGROSSED
HB NO. 39
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participant as directed by the participant. The participant shall be given such options1
as comply with federal law for self-directed plans.2
(3) Any participant who elects to transfer the lump-sum Back-DROP3
payment into a self-directed account agrees that the benefits payable to the4
participant are not the obligations of the state or the fund and that any returns and5
other rights of the plan are the sole liability and responsibility of the participant and6
the designated provider to which contributions have been made. Furthermore, each7
participant, in accordance with this provision, shall expressly waive his rights as set8
forth in Article X, Section 29(E)(5) of the Constitution of Louisiana as it relates to9
his Back-DROP account with the third-party provider. By electing to transfer the10
Back-DROP lump-sum payment into an account with a third-party provider, the11
participant agrees that he and the provider shall be responsible for complying with12
all applicable provisions of the Internal Revenue Code. The participant also agrees13
that if any violation of the Internal Revenue Code occurs as a result of the14
participant's decision to transfer his Back-DROP lump-sum payment into a self-15
directed account, it shall be the sole responsibility and liability of the participant and16
the provider and not of the state or the fund.17
(4) There shall be no liability on the part of and no cause of action of any18
nature shall arise against the state, the fund, or the agents or employees of the state19
or the fund for any action taken by the participant or for choices the participant20
makes in relationship to the self-directed account funds in which he chooses to place21
his account balance.22
Section 2. This Act shall become effective upon signature by the governor or, if not23
signed by the governor, upon expiration of the time for bills to become law without signature24
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If25
vetoed by the governor and subsequently approved by the legislature, this Act shall become26
effective on the day following such approval.27 HLS 14RS-378 ENGROSSED
HB NO. 39
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are additions.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HB No. 39
Abstract: Authorizes participants in the La. Assessors' Retirement Fund Back-Deferred
Retirement Option Plan (Back-DROP) to transfer their lump-sum Back-DROP
payment to a self-directed account managed by a third-party provider.
Present law (R.S. 11:1456.1) establishes the Back-DROP program within the La. Assessors'
Retirement Fund (hereafter, the fund). Provides that a Back-DROP participant may receive
both his retirement benefit and a lump-sum amount equal to his maximum monthly benefit
amount multiplied by the number of months the member selected for his Back-DROP period
pursuant to present law. Proposed law retains present law.
Present law (R.S. 11:1457) authorizes a member to roll eligible distributions to another
qualified retirement plan, such as an IRA.
Proposed law authorizes the fund to contract with a third-party provider to provide self-
directed accounts for Back-DROP lump sums. Authorizes the member to transfer their
Back-DROP lump sums to such self-directed accounts.
Proposed law provides waivers of liability that a self-directed account participant agrees to
when he elects participation in such account. Such waivers include:
(1)That the benefits payable from the self-directed account are not the obligations of the
state or the fund.
(2)That the participant and the selected third-party provider bear all liability and
responsibility for returns and other rights under the account.
(3)That the participant waives his constitutional protections against diminished or
impaired benefits.
(4)That the participant and the third-party provider bear all responsibility for complying
with applicable I.R.S. provisions and regulations.
(5)That the state and the fund and all agents of the state and the fund are not liable for
choices the participant makes as to his investments.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 11:1456.1(E))