Pearson (HB No. 39) Act No. 143
Existing 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 existing law.
Existing law (R.S. 11:1457) further authorizes a member to roll eligible distributions to
another qualified retirement plan, such as an IRA.
New law authorizes the fund to contract with a third-party provider to provide self-directed
accounts for Back-DROP lump sums. Authorizes a Back-DROP participant to transfer his
lump sum to such a self-directed account.
New 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 (May 22, 2014).
(Adds R.S. 11:1456.1(E))