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2015 Regular Session
SENATE BILL NO. 13
BY SENATOR PEACOCK
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
FIREFIGHTERS RETIREMENT. Provides benefits for members hired on or after January
1, 2016. (6/30/15)
1 AN ACT
2 To amend and reenact the introductory paragraph of R.S. 11:2252 and 2252(4), 2256(A),
3 and 2257(K)(3)(a) and (b), relative to statewide retirement systems; to provide
4 relative to the Firefighters' Retirement System; to provide for definitions; to provide
5 for eligibility, benefits, and accrual and contribution rates; to provide for an effective
6 date; and to provide for related matters.
7 Notice of intention to introduce this Act has been published.
8 Be it enacted by the Legislature of Louisiana:
9 Section 1. The introductory paragraph of R.S. 11:2252 and 2252(4), 2256(A), and
10 2257(K)(3)(a) and (b) are hereby amended and reenacted to read as follows:
11 §2252. Definitions
12 The following words and phrases, as used in this Chapter, unless a different
13 meaning is plainly required by context, shall have the following meanings:
14 * * *
15 (4)(a) "Average final compensation", for a member whose first
16 employment making him eligible for membership in the system began on or
17 before December 31, 2015, shall mean the average annual earned compensation of
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1 an employee for any period of thirty-six successive or joined months of service as
2 an employee during which the said earned compensation was the highest. In case of
3 interruption of employment, the thirty-six month period shall be computed by joining
4 employment periods immediately preceding and succeeding the interruption. The
5 earnings to be considered for the thirteenth through the twenty-fourth months shall
6 not exceed one hundred fifteen percent of the earnings for the first through the
7 twelfth months. The earnings to be considered for the final twelve months shall not
8 exceed one hundred fifteen percent of the earnings of the thirteenth through the
9 twenty-fourth months.
10 (b) "Average final compensation", for a member whose first employment
11 making him eligible for membership in the system began on or after January
12 1, 2016, shall mean the average annual earned compensation of an employee for
13 any period of sixty successive or joined months of service as an employee during
14 which the said earned compensation was the highest. In case of interruption of
15 employment, the sixty-month period shall be computed by joining employment
16 periods immediately preceding and succeeding the interruption. The earnings
17 to be considered for the thirteenth through the twenty-fourth months shall not
18 exceed one hundred fifteen percent of the earnings of the first through the
19 twelfth months. The earnings to be considered for the twenty-fifth through the
20 thirty-sixth months shall not exceed one hundred fifteen percent of the earnings
21 of the thirteenth through the twenty-fourth months. The earnings to be
22 considered for the thirty-seventh through the forty-eighth months shall not
23 exceed one hundred fifteen percent of the earnings of the twenty-fifth through
24 the thirty-sixth months. The earnings to be considered for the final twelve
25 months shall not exceed one hundred fifteen percent of the earnings of the
26 thirty-seventh through the forty-eighth months.
27 * * *
28 §2256. Benefits; refund of contributions, application, and payment
29 A.(1)(a) Any member of this system whose first employment making him
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1 eligible for membership in the system began on or before December 31, 2015,
2 who has completed at least twenty-five years of creditable service, who has been a
3 member of this system for at least one year, regardless of age, or any shall be
4 eligible to retire from service.
5 (b) Any member who has completed at least twenty years of creditable
6 service, who has been a member of this system for at least one year, and who has
7 attained the age of fifty years, or any member who has completed at least twelve
8 years of service, who has been a member of this system for at least one year, and
9 who has attained the age of fifty-five shall be entitled to retire from service.
10 (2) Any member who has completed twenty or more years of creditable
11 service, and at least one year of which shall be as a member of this system, and who
12 leaves employment covered by this system before attaining age fifty shall be entitled
13 to a retirement benefit beginning at age fifty. Any member who has completed
14 twelve years of creditable service, and at least one year of which shall be as a
15 member of this system, and who leaves employment covered by this system before
16 attaining age fifty-five shall be entitled to a retirement benefit beginning at age
17 fifty-five.
18 (3) Any member who has completed twenty or more years of creditable
19 service and who leaves employment covered by this system before attaining age fifty
20 or any member who has completed twelve or more years of creditable service and
21 who leaves employment covered by this system before attaining age fifty-five may
22 select, at any time prior to thirty days before the date that benefits are scheduled to
23 commence to the member, any optional retirement allowance as provided for in R.S.
24 11:2259; within the same time period allowed above, the member may change the
25 option selected or the beneficiary of the option selected. However, in the event of the
26 death of the member after the selection of the option but prior to the commencement
27 of benefits, the optional benefit will become payable to the option beneficiary, at the
28 time the member would have otherwise begun to receive benefits. In the event that
29 the member selects neither the maximum regular retirement benefit nor an optional
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1 retirement allowance within the time period allowed above, Option 2 will be
2 automatically assumed to have been selected and the member's designated
3 beneficiary shall be the beneficiary of the option. However, in the event that a
4 member has no designated beneficiary, the accumulated contributions of the member
5 shall be refunded to his estate immediately upon receipt of proof of death.
6 (4)(a) Upon such retirement, the member whose first employment making
7 him eligible for membership in the system began on or before December 31,
8 2015, shall be paid an annual retirement allowance equal to three and one-third
9 percent of his average final compensation multiplied by his total years of creditable
10 service. However, the annual retirement allowance shall not exceed one hundred
11 percent of his average final compensation. The member shall not be paid any amount
12 in excess of the maximum amount permitted under Section 415 of the Internal
13 Revenue Code of 1986, as amended. The foregoing sentence shall not prohibit
14 payments to a member from an excess benefit plan established pursuant to Section
15 415(m) of the Internal Revenue Code of 1986, as amended, as provided in Section
16 2272 of this Chapter R.S. 11:2272.
17 (b) Upon such retirement, the member whose first employment making
18 him eligible for membership in the system began on or after January 1, 2016,
19 shall be paid an annual retirement allowance equal to three percent of his
20 average final compensation multiplied by his total years of creditable service.
21 Any member who retires or enters the deferred retirement option plan with
22 thirty or more years of creditable service shall be paid an annual retirement
23 allowance equal to three and one-third percent of his average final
24 compensation multiplied by his total years of creditable service. However, the
25 annual retirement allowance shall not exceed one hundred percent of his
26 average final compensation. The member shall not be paid any amount in excess
27 of the maximum amount permitted under Section 415 of the Internal Revenue
28 Code of 1986, as amended. The foregoing sentence shall not prohibit payments
29 to a member from an excess benefit plan established pursuant to Section 415(m)
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1 of the Internal Revenue Code of 1986, as amended, as provided in R.S. 11:2272.
2 (5) Upon returning to work as a full-time employee covered by this system,
3 retirement benefits shall cease and the employee and employer shall contribute to the
4 system towards creditable service. The member may not change the option which
5 was selected under the first retirement computation.
6 * * *
7 §2257. Deferred retirement option plan
8 * * *
9 K.(1) * * *
10 (3) Upon termination of employment, he shall receive an additional
11 retirement benefit based on his additional service rendered since termination of
12 participation in the fund, using the normal method of computation of benefit, subject
13 to the following:
14 (a) If his period of additional service is less than thirty-six months his
15 average final compensation period, the average compensation figure used to
16 calculate the additional benefit shall be that used to calculate his original benefit.
17 (b) If his period of additional service is thirty-six or more months equal to
18 or longer than his average final compensation period, the average compensation
19 figure used to calculate the additional benefit shall be based on his compensation
20 during the period of additional service.
21 * * *
22 Section 2. This Act shall become effective June 30, 2015; if vetoed by the governor
23 and subsequently approved by the legislature, this Act shall become effective on June 30,
24 2015, or on the day following such approval by the legislature, whichever is later.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Margaret M. Corley.
DIGEST
SB 13 Engrossed 2015 Regular Session Peacock
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, 2015.
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Proposed law defines "average compensation" for persons hired on or after January 1, 2016,
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, 2015.
Proposed law establishes retirement eligibility for FRS employees hired on or after January
1, 2016:
(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, 2015.
Proposed law provides a 3% accrual rate for employees in FRS, hired on or after January 1,
2016; 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, 2015.
(Amends R.S. 11:2252(intro para) and (4), 2256(A), and 2257(K)(3)(a) and (b))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Retirement to the
original bill
1. Provided for technical amendments.
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