HLS 20RS-116 ENGROSSED
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 (C)(1)(a), and 2227(B)(1)(introductory paragraph) and (b), (G), and (J) and to enact
4 R.S. 11:2225(G), relative to the Municipal Police Employees' Retirement System;
5 to provide relative to employer and employee contributions and the reporting thereof;
6 to provide for suspension of benefit payments and extension of Deferred Retirement
7 Option Plan participation period under certain circumstances; to provide with regard
8 to interest and penalties for delinquent contributions; and to provide for related
9 matters.
10 Notice of intention to introduce this Act has been published
11 as provided by Article X, Section 29(C) of the Constitution
12 of Louisiana.
13Be it enacted by the Legislature of Louisiana:
14 Section 1. R.S. 11:2220(G), 2221(C) and (E)(1)(a), 2225(A)(1), 2225.4(B) and
15(C)(1)(a), and 2227(B)(1)(introductory paragraph) and (b), (G), and (J) are hereby amended
16and reenacted and R.S. 11:2225(G) is hereby enacted to read as follows:
17 §2220. Benefits; contribution limit
18 * * *
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1 G. The retirement benefits provided by this Section shall not annually exceed
2 one hundred percent of average final compensation, and when a member has earned
3 benefits equal to one hundred percent of his average final compensation, no further
4 contributions shall be required of him. However, the employer shall continue to pay
5 to the system the employer's contribution. However, if a member earns benefits
6 equal to or greater than one hundred percent of his average final compensation on or
7 after July 1, 2021, the employer and employee shall continue to pay their respective
8 contributions to the system.
9 * * *
10 §2221. Deferred Retirement Option Plan
11 * * *
12 C. The duration of participation in the plan shall be specified and shall not
13 exceed three years. However, if employer contributions on behalf of a participant
14 are suspended during the participation period as a result of interruption of
15 employment, benefit payments into the participant's subaccount within the plan shall
16 be suspended until payment of employer contributions is restored, and the member's
17 participation period shall be extended by the number of months his benefit payments
18 were suspended. In such a case, the participation period may exceed three calendar
19 years but shall not exceed thirty-six nonconsecutive months of participation. For
20 purposes of this Subsection, interruption of employment shall include but not be
21 limited to periods when a participant is on leave without pay or worker's
22 compensation.
23 * * *
24 E.(1)(a) Upon the effective date of the commencement of participation in the
25 plan, membership in the system shall terminate and neither employee nor employer
26 contributions shall be payable, except that for employees who commence
27 participation in the plan on or after July 1, 2021, employer contributions shall
28 continue to be payable.
29 * * *
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1 §2225. Administration
2 A.(1) The general administration and responsibility for the proper operation
3 of the retirement system and for making effective the provisions of this Chapter are
4 hereby vested in a board of trustees which shall be organized immediately after a
5 majority of the trustees provided for in this Section shall have qualified and taken the
6 oath of office. The board of trustees may make, amend, and promulgate rules and
7 otherwise provide for the establishment and maintenance of the system as authorized
8 by this Title.
9 * * *
10 G. All employers shall report separately the amount of compensation paid
11 for overtime on their monthly contribution reports.
12 * * *
13 §2225.4. Unfunded accrued liability; payment by employer
14 * * *
15 B.(1) Any amount due pursuant to Subsection A of this Section shall be
16 determined by the actuary employed by the system and shall be amortized over
17 fifteen years in equal payments with interest at the system's valuation interest rate.
18 Payments for withdrawals that occur on or after July 1, 2018, shall be payable
19 beginning July first of the second fiscal year following the withdrawal determination
20 by the actuary and in the same manner as regular payroll payments to the system.
21 Beginning July first of the fiscal year following the withdrawal, interest shall accrue
22 at the system's actuarial valuation rate, compounded annually.
23 (2) If the number of participating employees of an employer subject to
24 Paragraph (A)(2) of this Section returns to at least the number of participating
25 employees as of the June thirtieth immediately preceding the withdrawal, the
26 payments required by this Section shall cease on the July first following the
27 determination by the actuary that a sufficient increase in participating employees has
28 occurred, and no further payments shall be due with respect to the withdrawal. Any
29 payments made pursuant to this Section will shall be credited as an offset of any
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1 amounts due by the employer attributable to any subsequent withdrawal that occurs
2 within fifteen years of the payments.
3 C.(1) If an employer fails to make a payment timely, the amount due shall
4 be collected in any of the following manners:
5 (a) By action in a court of competent jurisdiction against the delinquent
6 employer. The amount due shall include interest calculated at the system's actuarial
7 valuation rate, compounded annually. The employer shall also be liable for any legal
8 and actuarial fees incurred by the system in the collection of amounts pursuant to this
9 Section.
10 * * *
11 §2227. Method of financing
12 * * *
13 B. Annuity savings fund:
14 The annuity savings fund shall be the fund in which shall be accumulated
15 contributions from the compensation of members to provide for their annuities.
16 Contributions to the annuity savings fund shall be made as follows:
17 (1) Each municipality shall make deductions from any salary or wages
18 excluding overtime paid by them to any member of this system in accordance with
19 the provisions of R.S. 11:62(6) on the earnable compensation paid him in each and
20 every payroll. All employers shall report separately the amount of compensation
21 paid for overtime on their monthly contribution reports.
22 * * *
23 (b) In the event the reduced salary paid by the municipality is not sufficient
24 to cover the deduction of employee contributions equal to that which would have
25 been deducted had the member not begun receiving worker's compensation
26 payments, the member may elect to pay the deficit to make whole the amount due
27 each and every payroll period directly to the municipality to be forwarded to the
28 retirement system. If the member does not elect to pay the deficit to make whole the
29 amount that would have been deducted had he not begun receiving worker's
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1 compensation, that member, for such periods, shall receive service credit for
2 eligibility determination purposes only and not for computation of benefits.
3 Beginning on July 1, 2021, if the member does not pay the deficit to make whole the
4 amount that would have been deducted pursuant to this Section for service each and
5 every pay period, the member shall not receive service credit for the period in which
6 the deficit was not paid.
7 * * *
8 G. The deferred retirement option plan shall be the account in which shall
9 be accumulated all payments made pursuant to R.S. 11:2221 11:2221(E)(3)
10 accumulate. Interest shall be credited to the account as provided by R.S.
11 11:2221(F)(2) 11:2221(G).
12 * * *
13 J.(1) Should If any municipality or other employer refuse fails to transmit
14 either employer's contributions or member's contributions within five days after its
15 their due date, the payment shall be delinquent. As used in this Subsection, "due
16 date" means the close of the tenth day after the end of the month for which payment
17 of employer's and member's contributions is applicable or deducted. In addition to
18 the employer and member contributions owed, the employer shall submit an amount
19 determined in accordance with Paragraph (2) of this Subsection.
20 (2)(a) Interest charged at the legal rate shall be due from the date the
21 payment became delinquent.
22 (b) Any employer who becomes delinquent for a period in excess of ninety
23 days in the collection and remittance of the amounts due as monthly contributions
24 is also subject to a penalty of twenty-five percent of the aggregate monthly
25 contributions due.
26 (c) Any employer who becomes delinquent for a period in excess of one
27 hundred and eighty days in the collection and remittance of the amounts due as
28 monthly contributions is liable for the greater of the amounts in Subparagraphs (a)
29 and (b) of this Paragraph and an amount equal to the actuarial cost of a purchase of
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1 the service credit for which contributions were not timely paid calculated by the
2 system's actuary pursuant to R.S. 11:158(C).
3 (d) The employer that failed to transmit the required contributions in a timely
4 manner shall also reimburse the system any legal and actuarial fees paid by the
5 system in the collection of amounts pursuant to this Paragraph.
6 Section 2. This Act shall become effective on July 1, 2020; if vetoed by the governor
7and subsequently approved by the legislature, this Act shall become effective on July 1,
82020, or on the day following such approval by the legislature, whichever is later.
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 Engrossed 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 for employees who commence participation in the plan on or
after July 1, 2021, 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.
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(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.
Effective July 1, 2020.
(Amends R.S. 11:2220(G), 2221(C) and (E)(1)(a), 2225(A)(1), 2225.4(B) and (C)(1)(a), and
2227(B)(1)(intro. para.) and (b), (G), and (J); Adds R.S. 11:2225(G))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Retirement to the
original bill:
1. Change the effective date of certain proposed law provisions relative to employer
and employee contributions.
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