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Regular Session, 2014
SENATE BILL NO. 4
BY SENATOR PEACOCK
FIREFIGHTERS RETIREMENT. Provides benefits for members hired on or after January
1, 2015. (6/30/14)
AN ACT1
To amend and reenact R.S. 11:2252 (introductory paragraph), 2252(4), 2256(A), and2
2257(K)(3)(a) and (b), relative to statewide retirement systems; to provide relative3
to the Firefighters' Retirement System; to provide for definitions; to provide for4
eligibility, benefits, and accrual and contribution rates; to provide for an effective5
date; and to provide for related matters.6
Notice of intention to introduce this Act has been published.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 11:2252 (introductory paragraph), 2252(4), 2256(A), and9
2257(K)(3)(a) and (b) are hereby amended and reenacted to read as follows:10
§2252. Definitions11
The following words and phrases, as used in this Chapter, unless a different12
meaning is plainly required by context, shall have the following meaning s:13
* * *14
(4)(a) "Average final compensation", for a member whose first15
employment making him eligible for membership in the system began on or16
before December 31, 2014, shall mean the average annual earned compensation of17 SB NO. 4
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an employee for any period of thirty-six successive or joined months of service as1
an employee during which the said earned compensation was the highest. In case of2
interruption of employment, the thirty-six month period shall be computed by joining3
employment periods immediately preceding and succeeding the interruption. The4
earnings to be considered for the thirteenth through the twenty-fourth months shall5
not exceed one hundred fifteen percent of the earnings for the first through the6
twelfth months. The earnings to be considered for the final twelve months shall not7
exceed one hundred fifteen percent of the earnings of the thirteenth through the8
twenty-fourth months.9
(b) "Average final compensation", for a member whose first employment10
making him eligible for membership in the system began on or after January11
1, 2015, shall mean the average annual earned compensation of an employee for12
any period of sixty successive or joined months of service as an employee during13
which the said earned compensation was the highest. In case of interruption of14
employment, the sixty-month period shall be computed by joining employment15
periods immediately preceding and succeeding the interruption. The earnings16
to be considered for the thirteenth through the twenty-fourth months shall not17
exceed one hundred fifteen percent of the earnings of the first through the18
twelfth months. The earnings to be considered for the twenty-fifth through the19
thirty-sixth months shall not exceed one hundred fifteen percent of the earnings20
of the thirteenth through the twenty-fourth months. The earnings to be21
considered for the thirty-seventh through the forty-eighth months shall not22
exceed one hundred fifteen percent of the earnings of the twenty-fifth through23
the thirty-sixth months. The earnings to be considered for the final twelve24
months shall not exceed one hundred fifteen percent of the earnings of the25
thirty-seventh through the forty-eighth months.26
* * *27
§2256. Benefits; refund of contributions, application, and payment28
A.(1)(a) Any member of this system whose first employment making him29 SB NO. 4
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eligible for membership in the system began on or before December 31, 2014,1
who has completed at least twenty-five years of creditable service, who has been a2
member of this system for at least one year, regardless of age, shall be eligible to3
retire from service.4
(b) or any Any member who has completed at least twenty years of creditable5
service, who has been a member of this system for at least one year, and who has6
attained the age of fifty years, or any member who has completed at least twelve7
years of service, who has been a member of this system for at least one year, and8
who has attained the age of fifty-five shall be entitled to retire from service.9
(2) Any member who has completed twenty or more years of creditable10
service, and at least one year of which shall be as a member of this system, and who11
leaves employment covered by this system before attaining age fifty shall be entitled12
to a retirement benefit beginning at age fifty. Any member who has completed13
twelve years of creditable service, and at least one year of which shall be as a14
member of this system, and who leaves employment covered by this system before15
attaining age fifty-five shall be entitled to a retirement benefit beginning at age16
fifty-five.17
(3) Any member who has completed twenty or more years of creditable18
service and who leaves employment covered by this system before attaining age fifty19
or any member who has completed twelve or more years of creditable service and20
who leaves employment covered by this system before attaining age fifty-five may21
select, at any time prior to thirty days before the date that benefits are scheduled to22
commence to the member, any optional retirement allowance as provided for in R.S.23
11:2259; within the same time period allowed above, the member may change the24
option selected or the beneficiary of the option selected. However, in the event of the25
death of the member after the selection of the option but prior to the commencement26
of benefits, the optional benefit will become payable to the option beneficiary, at the27
time the member would have otherwise begun to receive benefits. In the event that28
the member selects neither the maximum regular retirement benefit nor an optional29 SB NO. 4
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retirement allowance within the time period allowed above, Option 2 will be1
automatically assumed to have been selected and the member's designated2
beneficiary shall be the beneficiary of the option. However, in the event that a3
member has no designated beneficiary, the accumulated contributions of the member4
shall be refunded to his estate immediately upon receipt of proof of death.5
(4)(a) Upon such retirement, the member whose first employment making6
him eligible for membership in the system began on or before December 31,7
2014, shall be paid an annual retirement allowance equal to three and one-third8
percent of his average final compensation multiplied by his total years of creditable9
service. However, the annual retirement allowance shall not exceed one hundred10
percent of his average final compensation. The member shall not be paid any amount11
in excess of the maximum amount permitted under Section 415 of the Internal12
Revenue Code of 1986, as amended. The foregoing sentence shall not prohibit13
payments to a member from an excess benefit plan established pursuant to Section14
415(m) of the Internal Revenue Code of 1986, as amended, as provided in Section15
2272 of this Chapter R.S. 11:2272.16
(b) Upon such retirement, the member whose first employment making17
him eligible for membership in the system began on or after January 1, 2015,18
shall be paid an annual retirement allowance equal to three percent of his19
average final compensation multiplied by his total years of creditable service.20
Any member who retires or enters the deferred retirement option plan with21
thirty or more years of creditable service shall be paid an annual retirement22
allowance equal to three and one-third percent of his average final23
compensation multiplied by his total years of creditable service. However, the24
annual retirement allowance shall not exceed one hundred percent of his25
average final compensation. The member shall not be paid any amount in excess26
of the maximum amount permitted under Section 415 of the Internal Revenue27
Code of 1986, as amended. The foregoing sentence shall not prohibit payments28
to a member from an excess benefit plan established pursuant to Section 415(m)29 SB NO. 4
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of the Internal Revenue Code of 1986, as amended, as provided in R.S. 11:2272.1
(5) Upon returning to work as a full-time employee covered by this system,2
retirement benefits shall cease and the employee and employer shall contribute to the3
system towards creditable service. The member may not change the option which4
was selected under the first retirement computation.5
* * *6
§2257. Deferred retirement option plan7
* * *8
K.(1) * * *9
(3) Upon termination of employment, he shall receive an additional10
retirement benefit based on his additional service rendered since termination of11
participation in the fund, using the normal method of computation of benefit, subject12
to the following:13
(a) If his period of additional service is less than thirty-six months his14
average final compensation period, the average compensation figure used to15
calculate the additional benefit shall be that used to calculate his original benefit.16
(b) If his period of additional service is thirty-six or more months equal to17
or longer than his average final compensation period, the average compensation18
figure used to calculate the additional benefit shall be based on his compensation19
during the period of additional service.20
* * *21
Section 2. This Act shall become effective July 1, 2014; if vetoed by the governor22
and subsequently approved by the legislature, this Act shall become effective on June 30,23
2014, or on the day following such approval by the legislature, whichever is later.24
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Margaret M. Corley.
DIGEST
Peacock (SB 4)
Present law defines "average final compensation" for members as the average of their 36
highest paid months of employment. Proposed law retains present law for current employees
and for employees hired on or before December 31, 2014. SB NO. 4
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Proposed law defines "average compensation" for persons hired on or after January 1, 2015,
as the average of their highest paid 60 months of employment.
Present law contains restrictions on "spiking" salaries of employees so that, year over year,
a member's salary cannot increase more than 15% over the prior year's salary. Proposed law
retains present law.
Present law establishes retirement eligibility for FRS:
(1)25 years of service or more at any age.
(2)20 years of service or more at age 50.
(3)12 years of service or more at age 55.
Proposed law retains present law for current employees and employees hired on or before
December 31, 2014.
Proposed law establishes retirement eligibility for FRS employees hired on or after January
1, 2015:
(1)20 years of service or more at age 50.
(2)12 years of service or more at age 55.
Present law provides that the maximum retirement benefit is calculated as follows:
accrual rate x years of service x average final compensation. Proposed law retains present
law.
Present law provides a 3a% accrual rate for members in FRS.
Proposed law retains present law for current employees and for employees hired on or before
December 31, 2014.
Proposed law provides a 3% accrual rate for employees in FRS, hired on or after January 1,
2015; however, for any employee who earns 30 years of service credit, proposed law
provides a 3a% accrual rate for all years.
Proposed law requires that any additional benefit earned for continued employment after
participation in a deferred retirement option plan (DROP) to be calculated using the same
period as that member's original average final compensation period.
Effective June 30, 2014.
(Amends R.S. 11:2252(4), 2256(A), and 2257(K)(3)(a) and (b))