RÉSUMÉ DIGEST
ACT 124 (HB 18) 2020 Regular Session Bacala
New law amends various provisions of existing law relative to the Municipal Police
Employees' Retirement System (MPERS), including provisions for, contributions to the
system, the Deferred Retirement Option Plan, system administration, payments made by an
employer that dissolves its police department, and delinquent payments from employers.
Existing law provides that if an employee's earned retirement benefit exceeds 100% of his
final average compensation, he ceases making contributions to MPERS. New law limits the
applicability of existing law to employees whose benefit exceeded his final average
compensation prior to July 1, 2021.
Existing law provides for a Deferred Retirement Option Plan (DROP) which allows a
member who is eligible to retire to continue employment and have his retirement benefit
deposited into an account. Provides that maximum duration of participation in the plan is
three years. New law provides that if benefit payments to the DROP account are suspended
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.
Existing law provides that during a member's participation in DROP, neither the employer
nor the member shall make contributions to MPERS. New law requires the employer to
make contributions to the system on behalf of an employee who commences participation
in DROP on or after July 1, 2021.
Existing law requires an employer that dissolves or partially dissolves its police department
to remit to the system, beginning the July first immediately following the date of dissolution,
that portion of the unfunded accrued liability existing on the June thirtieth immediately prior
to the date of dissolution of the police department that is attributable to the employer.
Provides that such payments shall include interest at the system's valuation rate. Provides
for determination of the amount owed by the system's actuary and the amortization of the
amount over 15 years.
New law provides that for withdrawals that occur after July 1, 2018, payments become
payable in the second fiscal year after the determination of the amount by the actuary, but
interest begins to accrue on July first of the fiscal year following the withdrawal.
Existing law provides for various funds into which the assets of MPERS are credited,
including the annuity savings fund to which employee contributions are credited. New law
requires employers to report overtime compensation separately on their monthly contribution
reports.
Existing law requires that employers continue to deduct employee contributions from an
employee's compensation even if that compensation is reduced while the employee is
receiving worker's compensation. Authorizes the employee to pay the deficit if the
deductions are not sufficient to cover his contributions to the system.
Prior law provided that during any period during which the employee did not pay the deficit,
he would have received service credit for eligibility determination purposes but not for
benefit computation purposes. New law, which becomes applicable July 1, 2021, provides
that the employee will receive no service credit during such a period.
New law provides that delinquent payments of 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 also 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) and (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.
New 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))