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)]
HB 58 Original 2016 Regular Session Leger
Abstract: Restricts payment options for members electing to participate in the Deferred Retirement
Option Plan (DROP) in the Firefighters' Pension and Relief Fund in the city of New Orleans
(NOFF) and provides relative to investment of the funds in member DROP accounts and
interest earned thereon.
Present law establishes the DROP within NOFF. Members may select a participation period of up
to five years in the program.
Present law is silent as to whether a member who participates in DROP may also take an initial lump
sum option on his retirement benefit. Proposed law prohibits a member who elects to participate in
DROP from also exercising an initial lump sum benefit option at retirement.
Present law provides that, beginning Jan. 1, 2015, upon expiration of the member's participation
period or termination of employment, whichever occurs first, interest shall be allocated annually to
the member's DROP account at a rolling 5-year average rate. Further provides that the balance of
the member's account cannot be diminished or impaired. Proposed law authorizes the board, at its
option, to invest DROP account balances in liquid asset money market investments. Provides that
interest, in such event, shall be the actual rate of return earned on the investments.
Present law provides that DROP accounts are to be charged an administrative fee determined by the
board of trustees. Proposed law provides that DROP account balances that are not invested in liquid
asset money market investments, as provided in proposed law, shall be assessed an administrative
fee of not more than 2% per year.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 11:3385.1(D) and (H)(2))