HLS 20RS-116 ORIGINAL
2020 Regular Session
HOUSE BILL NO. 18
BY REPRESENTATIVE BACALA
RETIREMENT/MUNICIPAL POL: Provides relative to contributions to and the
administration of the Municipal Police Employees' Retirement System
1 AN ACT
2To amend and reenact R.S. 11:2220(G), 2221(C) and (E)(1)(a), 2225(A)(1), 2225.4(B), and
3 2227(B)(1)(b), (G), and (J) and to enact R.S. 11:2225(G), relative to the Municipal
4 Police Employees' Retirement System; to provide relative to employer and employee
5 contributions and the reporting thereof; to provide for suspension of benefit
6 payments and extension of Deferred Retirement Option Plan participation period
7 under certain circumstances; to provide with regard to interest and penalties for
8 delinquent contributions; and to provide for related matters.
9 Notice of intention to introduce this Act has been published
10 as provided by Article X, Section 29(C) of the Constitution
11 of Louisiana.
12Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 11:2221(C), 2225(A)(1), 2225.4(B), and 2227(G) and (J) are hereby
14amended and reenacted and R.S. 11:2225(G) is hereby enacted to read as follows:
15 §2221. Deferred Retirement Option Plan
16 * * *
17 C. The duration of participation in the plan shall be specified and shall not
18 exceed three years. However, if employer contributions on behalf of a participant
19 are suspended during the participation period as a result of interruption of
20 employment, benefit payments into the participant's subaccount within the plan shall
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1 be suspended until payment of employer contributions is restored, and the member's
2 participation period shall be extended by the number of months his benefit payments
3 were suspended. In such a case, the participation period may exceed three calendar
4 years but shall not exceed thirty-six nonconsecutive months of participation.
5 * * *
6 §2225. Administration
7 A.(1) The general administration and responsibility for the proper operation
8 of the retirement system and for making effective the provisions of this Chapter are
9 hereby vested in a board of trustees which shall be organized immediately after a
10 majority of the trustees provided for in this Section shall have qualified and taken the
11 oath of office. The board of trustees may make, amend, and promulgate rules and
12 otherwise provide for the establishment and maintenance of the system as authorized
13 by this Title.
14 * * *
15 G. All employers shall report separately the amount of compensation paid
16 for overtime on their monthly contribution reports.
17 * * *
18 §2225.4. Unfunded accrued liability; payment by employer
19 * * *
20 B.(1) Any amount due pursuant to Subsection A of this Section shall be
21 determined by the actuary employed by the system and shall be amortized over
22 fifteen years in equal payments with interest at the system's valuation interest rate.
23 Payments shall be payable beginning July first of the fiscal year following the
24 withdrawal determination by the actuary and in the same manner as regular payroll
25 payments to the system.
26 (2) If the number of participating employees of an employer subject to
27 Paragraph (A)(2) of this Section returns to at least the number of participating
28 employees as of the June thirtieth immediately preceding the withdrawal, the
29 payments required by this Section shall cease on the July first following the
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1 determination by the actuary that a sufficient increase in participating employees has
2 occurred, and no further payments shall be due with respect to the withdrawal. Any
3 payments made pursuant to this Section will shall be credited as an offset of any
4 amounts due by the employer attributable to any subsequent withdrawal that occurs
5 within fifteen years of the payments.
6 * * *
7 §2227. Method of financing
8 * * *
9 G. The deferred retirement option plan shall be the account in which shall
10 be accumulated all payments made pursuant to R.S. 11:2221 11:2221(E)(3)
11 accumulate. Interest shall be credited to the account as provided by R.S.
12 11:2221(F)(2) 11:2221(G).
13 * * *
14 J.(1) Should If any municipality or other employer refuse fails to transmit
15 either employer's contributions or member's contributions within five days after its
16 their due date, the payment shall be delinquent. As used in this Subsection, "due
17 date" means the close of the tenth day after the end of the month for which payment
18 of employer's and member's contributions is applicable or deducted. In addition to
19 the employer and member contributions owed, the employer shall submit an amount
20 determined in accordance with Paragraph (2) of this Subsection.
21 (2)(a) Interest charged at the legal rate shall be due from the date the
22 payment became delinquent.
23 (b) Any employer who becomes delinquent for a period in excess of ninety
24 days in the collection and remittance of the amounts due as monthly contributions
25 is also subject to a penalty of twenty-five percent of the aggregate monthly
26 contributions due.
27 (c) Any employer who becomes delinquent for a period in excess of one
28 hundred and eighty days in the collection and remittance of the amounts due as
29 monthly contributions is liable for the greater of the amounts in Subparagraphs (a)
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1 and (b) of this Paragraph and an amount equal to the actuarial cost of a purchase of
2 the service credit for which contributions were not timely paid calculated by the
3 system's actuary pursuant to R.S. 11:158(C).
4 (d) The employer that failed to transmit the required contributions in a timely
5 manner shall also reimburse the system any legal and actuarial fees paid by the
6 system in the collection of amounts pursuant to this Paragraph.
7 Section 2. R.S. 11:2220(G), 2221(E)(1)(a), and 2227(B)(1)(b) are hereby amended
8and reenacted to read as follows:
9 §2220. Benefits; contribution limit
10 * * *
11 G. The retirement benefits provided by this Section shall not annually exceed
12 one hundred percent of average final compensation, and when a member has earned
13 benefits equal to one hundred percent of his average final compensation, no further
14 contributions shall be required of him. However, when a member has earned
15 benefits equal to one hundred percent of his final average compensation, the
16 employer and the employee shall continue to pay their respective contributions to the
17 system the employer's contribution.
18 * * *
19 §2221. Deferred Retirement Option Plan
20 * * *
21 E.(1)(a) Upon the effective date of the commencement of participation in the
22 plan, membership in the system shall terminate and neither employee nor employer
23 contributions shall be payable. Employee contributions shall cease on
24 commencement of participation, but employer contributions shall continue to be paid
25 during the person's participation in the plan.
26 * * *
27 §2227. Method of financing
28 * * *
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1 B. Annuity savings fund. The annuity savings fund shall be the fund in
2 which shall be accumulated contributions from the compensation of members to
3 provide for their annuities accumulate. Contributions to the annuity savings fund
4 shall be made as follows:
5 (1) Each municipality shall make deductions from any salary or wages
6 excluding overtime paid by them to any member of this system in accordance with
7 the provisions of R.S. 11:62(6) on the earnable compensation paid him in each and
8 every payroll.
9 * * *
10 (b) In the event If the reduced salary paid by the municipality is not
11 sufficient to cover the deduction of employee contributions equal to that which
12 would have been deducted had the member not begun receiving worker's
13 compensation payments, the member may elect to pay the deficit to make whole the
14 amount due each and every payroll period directly to the municipality to be
15 forwarded to the retirement system. If the member does not elect to pay the deficit
16 to make whole the amount that would have been deducted had he not begun
17 receiving worker's compensation, that member, for such periods, shall not receive
18 any service credit for eligibility determination purposes only and not for computation
19 of benefits.
20 * * *
21 Section 3(A). Section 1 and this Section of this Act shall become effective on July
221, 2020; if vetoed by the governor and subsequently approved by the legislature, Section 1
23and this Section of this Act shall become effective on July 1, 2020, or on the day following
24such approval by the legislature, whichever is later.
25 (B) Section 2 of this Act shall become effective on July 1, 2021.
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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 18 Original 2020 Regular Session Bacala
Abstract: Provides for the reporting of contributions within the Municipal Police
Employees' Retirement System (MPERS), for suspension of benefit payments and
extension of participation in the Deferred Retirement Option Plan (DROP),
establishes interest and penalties for delinquent contributions, and gives the board
of directors the authority to promulgate rules.
Present law provides that the duration of participation in the Deferred Retirement Option
Plan (DROP) shall not exceed three years. Proposed law retains present law and provides
that if employer contributions are suspended during the participation period as a result of
interruption of employment, the member's participation period shall be extended by the
number of months his benefit payments were suspended.
Present law further provides that upon the effective date of commencement of participation
in DROP, neither employee nor employer contributions are payable. Proposed law provides
that employee contributions shall cease but employer contributions shall continue to be
payable.
Present law provides for the payment of unfunded accrued liability by employers
participating in the system that fully dissolves its police department and contracts for police
services with another entity. Present law further provides that payments are payable
beginning July first of the fiscal year following the withdrawal from the system by the
participating employer. Proposed law provides that payments are payable following the
determination by the system actuary of the amount owed.
Proposed law provides that delinquent payments of employee or employer contributions by
an MPERS employer are subject to the following:
(1)Interest charged at the legal rate from the date the payment became delinquent.
(2)Payments delinquent in excess of 90 days are subject to a penalty of 25% of the
aggregate contributions due.
(3)Payments delinquent in excess of 180 days are subject to payment of the greater of
(1) or (2) above and an amount equal to the actuarial cost of a purchase of the service
credit for which contributions were not timely paid.
(4)Reimbursement of the system for any legal and actuarial fees paid by the system in
the collection of amounts under proposed law.
Present law provides that a member who is receiving worker's compensation and who does
not pay the full amount that would be his employee contribution if he were not receiving
worker's compensation may receive service credit for purposes of eligibility determination
but not for computation of benefits purposes.
Proposed law provides that such a member shall not receive service credit for any purpose.
Proposed law authorizes the MPERS board of trustees to make, amend, and promulgate rules
and to provide for the establishment and maintenance of the system.
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Effective in part July 1, 2020; effective in part July 1, 2021.
(Amends R.S. 11:2220(G), 2221(C) and (E)(1)(a), 2225(A)(1), 2225.4(B), and
2227(B)(1)(b), (G), and (J); Adds R.S. 11:2225(G))
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