ENROLLED
ACT No. 109
2018 Regular Session
HOUSE BILL NO. 9
BY REPRESENTATIVE IVEY
1 AN ACT
2 To amend and reenact R.S. 11:2254(D) and (E) and to enact R.S. 11:2254(F) and (G),
3 relative to the Firefighters' Retirement System; to provide relative to direct rollovers
4 of sums from the system to qualified plans; to provide for definitions; and to provide
5 for related matters.
6 Notice of intention to introduce this Act has been published
7 as provided by Article X, Section 29(C) of the Constitution
8 of Louisiana.
9 Be it enacted by the Legislature of Louisiana:
10 Section 1. R.S. 11:2254(D) and (E) are hereby amended and reenacted and R.S.
11 11:2254(F) and (G) are hereby enacted to read as follows:
12 ยง2254. Creditable service
13 * * *
14 D.(1) The system shall permit direct rollovers from other qualified
15 retirement plans. "Direct rollovers" for purposes of this Section shall mean trustee
16 to trustee transfers of sums from other qualified plans which are permitted to roll
17 over sums to other qualified plans under the provisions of the Internal Revenue Code
18 of 1986, as amended. Amounts so rolled over may be used to purchase service
19 credits at the accrual rate established by the system actuary using actuarial
20 assumptions consistently applied, subject to the limitations of Section 415(n) of the
21 Internal Revenue Code of 1986, as amended. Any such service credit may only be
22 purchased only if authorized by statutory authority, other than this Subsection,
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1 specifically identifying the type of credit authorized to be purchased. Amounts may
2 not be rolled over which are in excess of the amounts which may be used to purchase
3 creditable service under Section 415(n). No member shall receive a benefit for
4 purchased creditable service if to do so would cause the member to receive a
5 retirement benefit for the same service under more than one retirement plan. The
6 system shall also permit members and retirees to make direct trustee to trustee
7 rollovers of those distributions which are eligible for tax-free rollover treatment to
8 other qualified plans as provided in Section 401(a)(31) of the Internal Revenue Code
9 of 1986, as amended.
10 E.(1) Notwithstanding any other provision of law to the contrary that would
11 otherwise limit a distributee's election under this Subsection, a distributee may elect,
12 at the time and in the manner prescribed by the plan administrator, to have any
13 portion of an eligible rollover distribution paid directly to an eligible retirement plan
14 specified by the distributee in a direct rollover.
15 (2) If a mandatory distribution greater than one thousand dollars is made on
16 or after March 28, 2005, and the distributee does not elect to have such distribution
17 paid directly to an eligible retirement plan specified by the distributee in a direct
18 rollover or to receive the distribution directly, then the plan administrator shall pay
19 the distribution in a direct rollover to an individual retirement plan designated by the
20 plan administrator. For purposes of determining whether a mandatory distribution
21 is greater than one thousand dollars, the portion of the distributee's distribution
22 attributable to any rollover contribution is included.
23 F. For purposes of this Section, the following words and phrases shall have
24 the following meanings:
25 (1) "Direct rollovers" shall mean trustee-to-trustee transfers of sums from
26 other qualified plans which are permitted to roll over sums to other qualified plans
27 under the provisions of the Internal Revenue Code of 1986, as amended.
28 (2)(a) "Eligible rollover distribution" shall mean any distribution of all or
29 any portion of the balance to the credit of the distributee. An eligible rollover
30 distribution shall not include:
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1 (i) Any distribution that is one of a series of substantially equal periodic
2 payments, not less frequently than annually, made for the life or life expectancy of
3 the distributee, or the joint lives or joint life expectancies of the distributee and the
4 distributee's designated beneficiary, or for a specified period of ten years or more.
5 (ii) Any distribution to the extent such distribution is required under Section
6 401(a)(9) of the Internal Revenue Code.
7 (iii) The portion of any distribution that is not includible in gross income,
8 determined without regard to the exclusion for net unrealized appreciation with
9 respect to employer securities.
10 (iv) Any other distribution that is reasonably expected to total less than two
11 hundred dollars during a year.
12 (b) A portion of the distribution shall not fail to be an eligible rollover
13 distribution merely because the portion consists of after-tax employee contributions
14 which are not includible in gross income. Such portion may be transferred only to
15 one of the following:
16 (i) A traditional individual retirement account or annuity described in
17 Section 408(a) or (b) of the Internal Revenue Code or a Roth IRA or annuity
18 described in Section 408A of the Internal Revenue Code.
19 (ii) A qualified defined contribution, defined benefit, or annuity plan
20 described in Section 401(a) or 403(b) of the Internal Revenue Code, or to an annuity
21 contract described in Section 403(b) of the Internal Revenue Code, if such plan or
22 contract provides for separate accounting for amounts so transferred, including
23 interest thereon, including separately accounting for the portion of such distribution
24 which is includible in gross income and the portion of such distribution which is not
25 so includible.
26 (3) "Eligible retirement plan" shall mean:
27 (a) An eligible plan described in Section 457(b) of the Internal Revenue
28 Code which is maintained by a state, political subdivision of a state, or any agency
29 or instrumentality of a state or political subdivision of a state and which agrees to
30 separately account for amounts transferred into such plan from this system.
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1 (b) A traditional individual retirement account.
2 (c) An annuity plan described in Section 403(b) of the Internal Revenue
3 Code.
4 (d) A qualified defined benefit or defined contribution plan described in
5 Section 401(a) of the Internal Revenue Code that accepts the distributee's eligible
6 rollover distribution.
7 (e) A distribution to a surviving spouse or to a spouse or former spouse who
8 is the alternative payee under a qualified domestic relations order as defined in
9 Section 414(p) of the Internal Revenue Code.
10 (4)(a) "Distributee" shall mean:
11 (i) A member or former member.
12 (ii) A member's or former member's surviving spouse, or a member's or
13 former member's spouse or former spouse who is the alternate payee under a
14 qualified domestic relations order as defined in Section 414(p) of the Internal
15 Revenue Code are distributees with regard to the interest of the spouse or former
16 spouse.
17 (iii) For distributions occurring in plan years beginning after December 31,
18 2009, the member's or former member's nonspouse designated beneficiary if the
19 direct rollover is made only to a traditional individual retirement account or a Roth
20 IRA that is established on behalf of the designated beneficiary and is treated as an
21 inherited individual retirement account pursuant to the provisions of Section
22 402(c)(11) of the Internal Revenue Code. In this case, the determination of any
23 required minimum distribution under Section 401(a)(9) of the Internal Revenue Code
24 that is ineligible for rollover shall be made in accordance with Notice 2007-7, Q&A
25 17 and 18, 2007-5 Internal Revenue Bulletin 395.
26 G. The qualified military service of a member who has been reemployed in
27 accordance with 26 U.S.C. 414(u) shall be treated for vesting and benefit accrual
28 purposes as service completed under Subsection A of this Section if the member
29 timely remits to the system any employee contributions which would have been
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1 required but for the member's leave of absence to perform qualified military service
2 in accordance with the terms of federal law.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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