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Regular Session, 2014
SENATE BILL NO. 20
BY SENATOR GUILLORY
TEACHERS RETIREMENT. Provides for compliance with federal tax qualification
standards. (7/1/14)
AN ACT1
To amend and reenact R.S. 11:701(10), (11), (12), (24), and (33)(a)(i), (ii)(aa), and (xiii) and2
(b)(i), 702(A) and (B), 723(A)(1), 781(B), 784(A), (C)(2), and (F), 784.1(A), (B),3
(C), and (D), 785.1(A) and (C), 792(A), (B), (C), and (D), and 826, to enact R.S.4
11:701(14.1), (22.1), and (33)(a)(xiv) and 781(C), and to repeal R.S. 11:723(B),5
relative to the Teachers' Retirement System of Louisiana; to provide with respect to6
the tax qualification of the system; to make changes to the plan's provisions in7
conformity with federal requirements; to provide for an effective date; and to provide8
for related matters.9
Notice of intention to introduce this Act has been published.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 11:701(10), (11), (12), (24), and (33)(a)(i), (ii)(aa), and (xiii) and12
(b)(i), 702(A) and (B), 723(A)(1), 781(B), 784(A), (C)(2), and (F), 784.1(A), (B), (C), and13
(D), 785.1(A) and (C), 792(A), (B), (C), and (D), and 826 are hereby amended and reenacted14
and R.S. 11:701(14.1), (22.1), and (33)(a)(xiv) and 781(C) are hereby enacted to read as15
follows:16
§701. Definitions17 SB NO. 20
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As used in this Chapter, the following words and phrases have the meanings1
ascribed to them in this Section unless a different meaning is plainly required by the2
context:3
* * *4
(10) "Earnable compensation" means the compensation earned by a member5
during the full normal working time as a teacher. Earnable compensation shall6
include any differential wage payment as defined by 26 U.S.C. 3401(h)(2) that is7
made by an employer to any individual performing qualified military service.8
Earnable compensation shall not include per diem, post allowances, payment in kind,9
hazardous duty pay, or any other allowance for expense authorized and incurred as10
an incident to employment, nor payments in lieu of unused sick or annual leave, nor11
retroactive salary increases unless such an increase was granted by legislative Act12
or by a city-parish city or parish systemwide salary increase, nor payment for13
discontinuation of contractual services, unless the payment is made on a monthly14
basis. If a member is granted an official leave and he makes contributions for the15
period of leave, earnable compensation shall not include compensation paid for other16
employment which would not have been possible without the leave. The board of17
trustees shall determine whether or not any other payments are to be classified as18
earnable compensation.19
(11) "Employer" means the State state of Louisiana, the any city, parish, or20
other local school board, the city school board, the State Board of Elementary and21
Secondary Education, the board of supervisors of the Louisiana State University any22
board created by Article VIII of the Constitution of Louisiana, or any other23
agency of and within the State state or a political subdivision by which a teacher24
is paid.25
(12) "Eligible rollover distribution" means the distribution of all or any26
portion of the balance to the credit of a member from a qualified plan. However, an27
eligible rollover distribution shall not include any of the following distributions:28
(a) One that is a series of substantially equal periodic payments, made not29 SB NO. 20
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less frequently than annually, for the life, or life expectancy of the member or the1
joint lives, or joint life expectancies of the member and the member's designated2
beneficiary.3
(b) One that is for a specified period of ten years or more.4
(c) One that is required by the provisions of Section 401(a)(9) of the United5
States Internal Revenue Code a distribution as defined in R.S. 11:792(B).6
* * *7
(14.1) "Internal Revenue Code" means the United States Internal8
Revenue Code of 1986, as amended.9
* * *10
(22.1) "Plan Year" means the fiscal year.11
* * *12
(24) "Public School" means any day school conducted within the state under13
the authority and supervision of a city, parish, or city other local school board and14
any educational institution supported by and under the control of the state.15
* * *16
(33)(a) "Teacher", except as provided in Subparagraph (b) of this Paragraph,17
shall mean any of the following:18
(i) Any employee of a city, or parish, or other local school board, any parish,19
or city, or other local superintendent, or any assistant superintendent of public20
schools.21
(ii)(aa) Any president, vice president, dean, teacher, guidance counselor, or22
unclassified employee at any state college or university or any vocational-technical23
school or institution or special school under the control of the State Board of24
Elementary and Secondary Education, or any educational institution supported by25
and under the control of the state or any city, parish, or other local school board.26
* * *27
(xiii) Any person who has retained membership in the system pursuant28
to R.S. 11:723.29 SB NO. 20
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(xiv) In all cases of doubt, the board of trustees shall determine whether any1
person is a teacher within the scope of the definition set forth in this Paragraph.2
(b) "Teacher" shall not include any of the following:3
(i) Any employee of a city, or parish, or other local school board who is4
employed as a school bus driver, school janitor, school custodian, or a school5
maintenance employee, school bus aide, monitor , or attendant, or anyone who6
actually works on a school bus helping with the transportation of school children.7
* * *8
§702. Name and establishment of retirement system9
A. A retirement system is established with all the powers and privileges10
pertaining to corporations, under the management of the board of trustees for the11
purpose of providing retirement allowances and other benefits under the provisions12
of this Chapter for teachers of the state of Louisiana. The retirement system so13
created shall be established as of the first day of August nineteen hundred and14
thirty-six August 1, 1936. The retirement system is established as a qualified15
defined benefit plan under Title 11 of the Louisiana Revised Statutes of 1950,16
known as the "Louisiana Public Retirement Law", as amended from time to17
time, pursuant to Sections 401(a) and 414(d) of the Internal Revenue Code,18
other applicable provisions of the Internal Revenue Code, applicable Treasury19
regulations, and other guidance.20
B. This system shall be known as the "Teachers' Retirement System of21
Louisiana", and by such name or its nominee name, which is hereby established as22
"TRSLA" "TRSL", all of its business shall be transacted, all of its funds invested,23
and all of its cash and securities and other property held, except as provided in24
Subsection C hereof of this Section.25
* * *26
§723. Members employed in other state employment; exception27
A.(1) Notwithstanding any enrollment error occurring prior to January 1,28
1992, and except as provided in Subsection C of this Section, any person who is29 SB NO. 20
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a member of the Teachers' Retirement System of Louisiana, who has creditable1
membership service of at least five years in this system and who becomes employed2
in other state or public employment where he is no longer eligible for membership3
in this system but is eligible for membership in another state or statewide retirement4
system, shall have the right to remain a member of this system in lieu of membership5
in the other statewide retirement system by filing a notice, in writing, with the board6
of trustees within sixty days after the effective date of employment. Such election7
shall be irrevocable.8
* * *9
§781. Refund of contributions10
* * *11
B. Any member whose employment is terminated as an employee a teacher12
as defined in R.S. 11:701(23) (33), and who, due to such termination, applies to13
withdraw the accumulated contributions standing to his account, shall not be entitled14
to receive a refund of said funds if he has been employed again by an employer as15
an employee a teacher defined in R.S. 11:701(23) (33) prior to the processing of his16
refund request by the retirement system. Such a member shall be considered as17
being an active member of the retirement system and shall not be entitled to18
withdraw his accumulated contributions.19
C. In conformity with Section 401(a)(8) of the Internal Revenue Code,20
any forfeitures of benefits by members or former members of the plan shall not21
be used to pay benefit increases. However, such forfeitures may be used to22
reduce employer contributions.23
* * *24
§784. Payment of benefits25
A. The retirement system shall pay all benefits in accordance with a26
good faith interpretation of the requirements of Section 401(a)(9) of the Internal27
Revenue Code as applicable to a governmental plan within the meaning of28
Section 414(d) of the Internal Revenue Code. The payment of benefits to or on29 SB NO. 20
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behalf of a member shall commence not later than April first following the calendar1
year in which the member retires, or attains age seventy and one-half years,2
whichever is later.3
* * *4
C. * * *5
(2) Paragraph (1) of this Subsection shall not apply to any portion of a6
member's benefit which is payable to or for the benefit of a designated beneficiary7
or beneficiaries, over the life of or over the life expectancy of such beneficiary, so8
long as such distributions begin not later than one year after the date December9
thirty-first of the calendar year immediately following the calendar year of the10
member's death, or, in the case of the member's surviving spouse, the date December11
thirty-first of the calendar year in which the member would have attained the age12
of seventy and one-half years. If the designated beneficiary is the member's13
surviving spouse and if the surviving spouse dies before the distribution of benefits14
commences, then Paragraph (1) of this Subsection shall be applied as if the15
surviving spouse were the member. If the designated beneficiary is a child of the16
member, for purposes of satisfying the requirement of Paragraph (1) of this17
Subsection, any amount paid to such child shall be treated as if paid to the member's18
surviving spouse if such amount would become payable to such surviving spouse (if19
alive) upon the child's reaching age eighteen or, if later, upon the child's completing20
a designated event. For purposes of the preceding sentence, a designated event shall21
be the later of the date the child is no longer disabled or the date the child ceases to22
be a full-time student (or attains age twenty-three, if earlier).23
* * *24
F. Payment in accordance with the options of R.S. 11:762 or of this Subpart25
A of Part IV, Chapter 2 of Subtitle II, shall be deemed not to violate Subsections B26
and C of this Section Notwithstanding any other provision of this Section or the27
provisions of the Treasury Regulations, any benefit option may continue so long28
as the option satisfies Section 401(a)(9) of the Internal Revenue Code based on29 SB NO. 20
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a reasonable and good faith interpretation of that section.1
* * *2
§784.1. Maximum benefits3
A.(1) Notwithstanding any other provision of this system to the contrary, no4
member shall receive a benefit in any year in excess of the sum of the maximum5
employer-financed benefit and the member-financed benefit the member6
contributions paid to and retirement benefits paid from the plan shall be limited7
to such extent as may be necessary to conform to the requirements of Section8
415 of the Internal Revenue Code for a qualified pension plan.9
(a) The maximum employer-financed benefit shall equal the sum of ninety10
thousand dollars, except that it may exceed that sum if the excess is caused by11
adjustments made pursuant to this Section.12
(b) The maximum employer-financed benefit for the year 1999 shall equal13
one hundred thirty thousand dollars. The member-financed benefit is the annual14
benefit that can be provided by annuitizing the member's after-tax accumulated15
contributions.16
(2) Any benefit reduction required by this Section shall, to the extent17
possible, reduce the monthly pension to which the member would otherwise have18
been entitled and shall not affect the member's Deferred Retirement Option Plan19
account.20
(2) Basic 415(b) limitation. (a) Before January 1, 1995, a member shall21
not receive an annual benefit that exceeds the limits specified in Section 415(b)22
of the Internal Revenue Code, subject to the applicable adjustments in that23
Section. On and after January 1, 1995, a member shall not receive an annual24
benefit that exceeds the dollar amount specified in Section 415(b)(1)(A) of the25
Internal Revenue Code, subject to the applicable adjustments in Section 415(b)26
of the Internal Revenue Code and subject to any additional limits that may be27
specified in the retirement system. In no event shall a member's annual benefit28
payable under the plan in any limitation year be greater than the limit29 SB NO. 20
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applicable at the annuity starting date, as increased in subsequent years1
pursuant to Section 415(d) of the Internal Revenue Code and the regulations2
thereunder.3
(b) For purposes of Section 415(b) of the Internal Revenue Code,4
"annual benefit" means a benefit payable annually in the form of a straight life5
annuity with no ancillary benefits without regard to the benefit attributable to6
after-tax employee contributions, except pursuant to Section 415(n) of the7
Internal Revenue Code, and to rollover contributions, as defined in Section8
415(b)(2)(A) of the Internal Revenue Code. The "benefit attributable" shall be9
determined in accordance with Treasury regulations.10
B. Adjustments in 415(b) limitation. (1)(a) If the annual benefit begins11
before the member attains age sixty-two, the ninety thousand dollar limit described12
in Subparagraph A(1)(a) of prescribed by this Section, as adjusted, shall be reduced13
in a manner prescribed by the United States Secretary of the accordance with14
Treasury regulations pursuant to the provisions of Section 415(b) of the Internal15
Revenue Code, so that such limit, as so reduced, equals an annual straight life16
benefit when such retirement income benefit begins that is equivalent to a one17
hundred sixty thousand dollar annual benefit, as adjusted, beginning at age18
sixty-two. The reduction provided for in this Paragraph shall not be applicable:19
(a) In the event the member's benefit is based on fifteen years of military20
service; or21
(b) To pre-retirement disability benefits or pre-retirement death22
benefits.23
(b) The adjustment authorized by Subparagraph (a) of this Paragraph may24
not reduce the member's annual benefit below seventy-five thousand dollars, if the25
member's benefit begins at or after age fifty-five, or the actuarial equivalent of26
seventy-five thousand dollars beginning at age fifty-five if benefits begin before age27
fifty-five.28
(2)(a) If the annual benefit begins after the member attains age sixty-five, the29 SB NO. 20
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ninety thousand dollar limit set forth in Subparagraph A(1)(a) of this Section, as1
adjusted, shall be increased so that it is the actuarial equivalent of the ninety2
thousand dollar limit at age sixty-five. The ninety thousand dollar limit on annual3
benefits, but not the seventy- five thousand dollar limit set forth in Subparagraph4
B(1)(b) of this Section, shall be adjusted annually as provided by Section 415(d) of5
the United States Internal Revenue Code and the regulations prescribed by the6
United States Secretary of the Treasury to reflect cost-of-living adjustments.7
(b) (2) Effect of cost-of-living adjustments. (a) The annual adjusted limit,8
set forth in Subparagraph (a) of this Paragraph A(2) of this Section, is effective as9
of January first of each calendar year and is applicable to benefits commencing10
during that calendar year. As a result of a cost-of-living increase to the limit under11
Section 415(d) of the Internal Revenue Code, a benefit that had been limited by12
the provisions of this Section in a previous year may be increased with respect to13
future payments to the lesser of the new limit or the amount of benefit that would14
have been payable from this system without regard to the provisions of this Section.15
(b) Effective on and after January 1, 2009, for purposes of applying the16
limits under Section 415(b) of the Internal Revenue Code (the "Limit") to a17
member with no lump sum benefit, the following shall apply:18
(i) A member's applicable Limit shall be applied to the member's annual19
benefit in the member's first limitation year without regard to any cost-of-living20
adjustments granted under the plan;21
(ii) To the extent that the member's annual benefit equals or exceeds the22
Limit, the member shall no longer be eligible for cost-of-living adjustments until23
such time as the benefit plus the accumulated increases are less than the Limit;24
and25
(iii) Thereafter, in any subsequent limitation year, a member's annual26
benefit, including any cost-of-living adjustments granted under the plan, shall27
be tested under the then-applicable benefit Limit including any adjustment to28
the Section 415(b)(1)(A) of the Internal Revenue Code dollar limit under Section29 SB NO. 20
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415(d) of the Internal Revenue Code, and the regulations thereunder.1
(c) Effective on and after January 1, 2009, with respect to a member2
who receives a portion of the member's annual benefit in a lump sum, a3
member's applicable Limit will be applied taking into consideration cost-of-4
living adjustments as required by Section 415(b) of the Internal Revenue Code5
and applicable Treasury regulations.6
(3) Annual benefits may not be paid in an amount greater than the accrued7
benefit under the plan. The maximum benefit limit, set forth in Paragraph A(1) of8
this Section, shall apply to a single-life annuity. If the benefit is payable in a form9
other than a single-life annuity, the maximum limit shall apply to the pension that is10
the actuarial equivalent of such single-life annuity, using an applicable interest rate11
and mortality table as prescribed by the United States Internal Revenue Service;12
however, the limit shall not be reduced for any benefit received as a disability13
retirement allowance or any payments received by the beneficiaries, survivors, or14
estate of a member as a result of the death of the member.15
C. An annual benefit may be paid to any member in excess of the limit16
otherwise allowed in Paragraph A(1) of this Section if the annual benefit derived17
from the employer contributions under this and all other qualified plans of the18
employer subject to the limitations of Section 415(b) of the United States Internal19
Revenue Code does not, in the aggregate, exceed ten thousand dollars for the plan20
year or for any prior year, and the member has not at any time participated in a21
defined contribution plan maintained by the employer. For purposes of this22
Subsection, a member's own contributions to the system are not considered a23
separate defined contribution plan maintained by the employer. (1) Ten Thousand24
Dollar Limit. The retirement benefit payable with respect to a member shall be25
deemed not to exceed the limit under Section 415 of the Internal Revenue Code26
if the benefits payable, with respect to such member under this plan and under27
all other qualified defined benefit pension plans to which the member's28
employer contributes, do not exceed ten thousand dollars for the applicable29 SB NO. 20
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limitation year and for any prior limitation year and the employer has not at1
any time maintained a qualified defined contribution plan in which the member2
participated.3
(2) Less than Ten Years of Participation or Service Adjustment for4
415(b) Limitations. The maximum retirement benefits payable to any member5
who has completed less than ten years of service shall be the amount determined6
under Paragraph A(2) of this Section, as adjusted under Subsection B of this7
Section, multiplied by a fraction, the numerator of which is the number of the8
member's years of participation and the denominator of which is ten. The limit9
under Paragraph C(1) of this Section, concerning the ten thousand dollar limit,10
shall be similarly reduced for any member who has accrued less than ten years11
of service, except the fraction shall be determined with respect to years of12
service instead of years of participation. The reduction provided by this13
Paragraph shall not reduce the maximum benefit below ten percent of the limit14
determined without regard to this Paragraph. The reduction provided for in15
this Paragraph cannot be applicable to pre-retirement disability benefits or16
pre-retirement death benefits.17
D.(1) If a member is or has been a participant in one or more defined18
contribution plans maintained by the employer, the sum of the member's19
contributions paid to this system and any other qualified defined benefit plans of the20
employer and the annual additions under such defined contribution plan or plans may21
not exceed the lesser of twenty-five percent of the member's earned compensation22
or thirty thousand dollars, as adjusted by the United States Secretary of the Treasury23
the limit under Section 415(c) of the Internal Revenue Code.24
(2) The sum of the "defined benefit plan fraction" and the "defined25
contribution plan fraction", as those terms are defined in Section 415 of the United26
States Internal Revenue Code, for any plan year in which Section 415 of the United27
States Internal Revenue Code is in effect, may not exceed one, 1.0, for any calendar28
year in which the limits of Section 415(d) of the United States Internal Revenue29 SB NO. 20
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Code are in effect and enforced by the United States Internal Revenue Service. If the1
sum of the defined benefit plan fraction and the defined contribution plan fraction2
exceeds one, 1.0, in any such year for any member, or if the benefits under this plan3
and one or more other defined benefit plans of the employer would otherwise exceed4
the maximum employer-financed benefit, and the administrator of the other plan or5
plans does not reduce the contributions or benefits under such other plan, the6
employer-financed benefit payable by this system shall be reduced to the extent7
necessary to ensure that the limitations provided in Section 415 of the United States8
Internal Revenue Code are met. The 415(b) limit with respect to any member who9
at any time has been a member in any other defined benefit plan as defined in10
Section 414(j) of the Internal Revenue Code maintained by the member's11
employer shall apply as if the total benefits payable under all such defined12
benefit plans in which the member has been a member were payable from one13
plan.14
(3) Effective on and after January 1, 2000, the limit under Section 415(e)15
of the Internal Revenue Code shall no longer apply.16
* * *17
§785.1. Annual compensation limitation for determination of benefits18
A. Unless otherwise provided in this Chapter, the accrued benefit of each19
"Section 401(a)(17) employee" as that term is defined below shall be the greater of20
the following:21
(1) The employee's accrued benefit determined with respect to the benefit22
formula applicable for the plan year beginning on or after January 1, 1996, as applied23
to the employee's total years of service taken into account for purposes of benefit24
accruals.25
(2) The sum of:26
(a) The employee's accrued benefit as of the last day of the last plan year27
beginning before January 1, 1996, frozen in accordance with the provisions of28
Section 1.401(a)(4) through (13) of the Code of Federal Regulations Sections29 SB NO. 20
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1.401(a)(4)-1 through 1.401(a)(4)-13 of the Treasury regulations; and1
(b) The employee's accrued benefit determined under the benefit formula2
applicable for the plan year beginning on or after January 1, 1996, as applied to the3
employee's years of service credited to the employee for plan years beginning on or4
after January 1, 1996, for purposes of benefit accruals.5
* * *6
C. If an employee is not a "Section 401(a)(17) employee", his accrued7
benefit in this system shall not be based upon compensation in excess of the annual8
limit of Section 401(a)(17) of the United States Internal Revenue Code, as amended9
and revised., subject to the following provisions:10
(1) Effective with respect to plan years beginning on and after July 1,11
1996, and before July 1, 2002, the annual compensation of a plan member which12
exceeds one hundred fifty thousand dollars, as adjusted for cost-of-living13
increases under Section 401(a)(17)(B) of the Internal Revenue Code, shall be14
disregarded for purposes of computing employee and employer contributions15
to or benefits due from the retirement system. Effective only for the 1996 plan16
year, in determining the compensation of an employee eligible for consideration17
under this Paragraph, the rules of Section 414(q)(6) of the Internal Revenue18
Code shall apply, except that in applying such rules, the term "family" shall19
include only the spouse of the member and any lineal descendants of the20
employee who have not attained age nineteen before the close of the year.21
(2) Effective with respect to plan years beginning on and after July 1,22
2002, the annual compensation of a plan member which exceeds two hundred23
thousand dollars, as adjusted for cost-of-living increases in accordance with24
Section 401(a)(17)(B) of the Internal Revenue Code, may not be taken into25
account in determining benefits or contributions due for any plan year. Annual26
compensation means compensation during the plan year or such other27
consecutive twelve month period, hereinafter the "determination period", over28
which compensation is otherwise determined under the plan. The cost-of-living29 SB NO. 20
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adjustment in effect for a calendar year applies to annual compensation for the1
determination period that begins with or within such calendar year. If the2
determination period consists of fewer than twelve months, the annual3
compensation limit is an amount equal to the otherwise applicable annual4
compensation limit multiplied by a fraction, the numerator of which is the5
number of months in the short determination period, and the denominator of6
which is twelve. If the compensation for any prior determination period is7
taken into account in determining a plan member's contributions or benefits for8
the current plan year, the compensation for such prior determination period is9
subject to the applicable annual compensation limit in effect for that prior10
period.11
* * *12
§792. Direct rollover13
A. The provisions of this Section shall apply to all eligible distributions14
by the system made on or after January 1, 1993, for purposes of compliance15
with Section 401(a)(31) of the Internal Revenue Code. Notwithstanding any other16
provision of law to the contrary that would otherwise limit a member's distributee's17
election under this Section, a member distributee may elect, at the time and in the18
manner prescribed by the Board of Trustees board of trustees, to have any portion19
of an "eligible rollover distribution", as specified by the member distributee, paid20
directly to an "eligible retirement plan", as those terms are defined below.21
B. An "eligible rollover distribution" is any distribution of all or any portion22
of the balance to the credit of a member, except that an eligible rollover distribution23
does not include: distributee. Effective January 1, 2002, the definition of eligible24
rollover distribution shall also include a distribution to a surviving spouse, or25
to a former spouse with whom a benefit or a return of employee contributions26
is to be divided pursuant to R.S. 11:291(B) and who is an alternate payee under27
a domestic relations order. An eligible rollover distribution shall not include:28
(1) Any distribution that is one of a series of substantially equal periodic29 SB NO. 20
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payments, not less frequently than annually, made for the life or life expectancy of1
the member distributee, or the joint lives or joint life expectancies of the member2
distributee and the member's distributee's designated beneficiary, or for a specified3
period of ten years or more.4
(2) Any distribution to the extent that such distribution is required under5
Section 401(a)(9) of the United States Internal Revenue Code.6
(3) The portion of any distribution that is not includible in gross income;7
provided, however, effective January 1, 2002, a portion of a distribution shall8
not fail to be an eligible rollover distribution merely because the portion consists9
of after-tax employee contributions that are not includible in gross income, but10
such portion may be transferred only:11
(a) To an individual retirement account or annuity described in Section12
408(a) or (b) of the Internal Revenue Code or to a qualified defined contribution13
plan described in Section 401(a) of the Internal Revenue Code that agrees to14
separately account for amounts so transferred and earnings thereon, including15
separately accounting for the portion of the distribution that is includible in16
gross income and the portion of the distribution that is not so includible;17
(b) On or after January 1, 2007, to a qualified defined benefit plan18
described in Section 401(a) of the Internal Revenue Code or to an annuity19
contract described in Section 403(b) of the Internal Revenue Code, that agrees20
to separately account for amounts so transferred and earnings thereon,21
including separately accounting for the portion of the distribution that is22
includible in gross income and the portion of the distribution that is not so23
includible; or24
(c) On or after January 1, 2008, to a Roth IRA described in Section25
408A of the Internal Revenue Code.26
(4) Any other distribution which the Internal Revenue Service does not27
consider eligible for rollover treatment, such as certain corrective distributions28
necessary to comply with the provisions of Section 415 of the Internal Revenue29 SB NO. 20
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words in boldface type and underscored are additions.
Code or any distribution that is reasonably expected to total less than two1
hundred dollars during the year.2
C.(1) An "eligible retirement plan" shall mean any of the following that3
accepts the distributee's eligible rollover distribution:4
(a)(1) An individual retirement account described in Section 408(a) of the5
Internal Revenue Code.6
(b)(2) An individual retirement annuity described in Section 408(b) of the7
Internal Revenue Code.8
(c)(3) An annuity plan described in Section 403(a) of the Internal Revenue9
Code.10
(d)(4) A qualified trust as described in Section 401(a) of the Internal Revenue11
Code, provided that such trust accepts the member's eligible rollover distribution.12
(e)(5) An Effective January 1, 2002, an eligible deferred compensation plan13
described in Section 457(b) of the Internal Revenue Code that is maintained by an14
eligible governmental employer, provided the plan contains provisions to account15
separately for amounts transferred into such plan.16
(f)(6) An Effective January 1, 2002, an annuity contract described in17
Section 403(b) of the Internal Revenue Code.18
(7) Effective January 1, 2008, a Roth IRA described in Section 408A of19
the Internal Revenue Code.20
D. A "distributee" as provided for in this Section shall include:21
(1) A member or former member.22
(2) The member's or former member's surviving spouse, or the member's or23
former member's former spouse with whom a benefit or a return of employee24
contributions is to be divided pursuant to R.S. 11:291(B) and who is the alternate25
payee under a domestic relations order, with reference to an interest of the26
member or former spouse.27
(3) The Effective January 1, 2010, the member's or former member's non-28
spouse beneficiary, provided the specified distribution is to an eligible retirement29 SB NO. 20
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plan as defined in Subparagraphs Paragraphs (C)(1)(a) and (C)(1)(b)(2) of this1
Section established for the purpose of receiving the distribution, and the account2
or annuity will be treated as an "inherited" individual retirement account or3
annuity.4
(4) Any other beneficiary as authorized under the Internal Revenue5
Code and as required to maintain governmental plan tax qualification status.6
* * *7
§826. Rules and regulations8
Subject to the limitations of this Part the board of trustees shall, from time to9
time, establish rules and regulations for the administration of the funds created by10
this Part Chapter and for the transaction of its business. The board shall prepare and11
submit to the Joint Legislative Committee on the Budget an annual budget for12
estimated costs of operating the system for each succeeding fiscal year. This budget13
shall be subject to approval by the Joint Legislative Committee on the Budget. The14
board of trustees shall adopt rules and regulations which are appropriate or15
necessary to maintain the qualified status of the plan.16
Section 2. R.S. 11:723(B) is hereby repealed.17
Section 3. This Act shall become effective on July 1, 2014; if vetoed by the governor18
and subsequently approved by the legislature, this Act shall become effective on July 1,19
2014, or on the day following such approval by the legislature, whichever is later.20
The original instrument was prepared by Laura Gail Sullivan. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Nancy Vicknair.
DIGEST
Guillory (SB 20)
Proposed law amends present law to keep the provisions governing the Teachers' Retirement
System of Louisiana in conformity with the provisions of present federal law requirements
for tax-qualified defined benefit plans.
Effective July 1, 2014.
(Amends R.S. 11:701(10), (11), (12), (24), and (33)(a)(i), (ii)(aa), and (xiii) and (b)(i),
702(A) and (B), 723(A)(1), 781(B), 784(A), (C)(2), and (F), 784.1(A), (B), (C), and (D),
785.1(A) and (C), 792(A), (B), (C), and (D), and 826; adds R.S. 11:701(14.1), (22.1), and
(33)(a)(xiv) and 781(C); repeals R.S. 11:723(B)) SB NO. 20
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Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Makes technical changes.
2. Requires, rather than authorizes, that prior to January 1, 1995, system
members not receive an annual retirement benefit that exceeds the limits
specified in Section 415(b) of the Internal Revenue Code.
3. Requires, rather than authorizes, that on and after January 1, 1995, system
members not receive an annual retirement benefit that exceeds the dollar
amount specified in Section 415(b)(1)(A) of the Internal Revenue Code.