RS 11:1644 Back-deferred retirement option program - Louisiana Statutes

§1644.  Back-Deferred Retirement Option Program

A.(1)  There is hereby created a program named the "Back-Deferred Retirement Option Program" which may be referred to in this Chapter as "Back-DROP".

(2)(a)  In lieu of receiving a service retirement allowance pursuant to this Chapter, an active contributing member who has accrued more years of service than are required for a normal retirement pursuant to R.S. 11:1632(A)(2), (3), or (4) or 1633(A)(1) and which are sufficient to qualify for the Back-DROP period selected may make an irrevocable election at the time of retirement to receive a Back-DROP benefit.  The member may qualify for Back-DROP only once.  A member who has participated in the Deferred Retirement Option Plan and who has not rescinded his participation period shall not be eligible to elect to receive a back-DROP benefit.

(b)  Notwithstanding any law to the contrary, any participant or active contributing member who was a former participant in the Deferred Retirement Option Plan for this system who has not severed employment and has not taken a distribution of the plan account may make a one-time, irrevocable election to rescind his participation period in the plan and return to active, contributing membership in the system.  Such election shall be made before January 1, 2009.  A person who rescinds such plan participation shall forfeit all accumulated plan benefits attributable to the participation period.  He shall pay to the system the employee contributions the system would have received if he had not been a plan participant during his participation period together with any interest thereon at the actuarial valuation interest rate.  After he pays to the plan the required amount, the person shall be credited with service as if he had remained in active service continuously and had not participated in the plan.  The board shall be authorized to adopt uniform rules for the implementation of this Subparagraph in accordance with the Administrative Procedure Act.  The rescinding participant shall be required to hold the system contractually harmless in the event that a spouse, former spouse, or any other person ever successfully asserts a property right relative to the rescission of such plan participation which has any adverse effect upon the system.

B.  At the time of retirement, the member shall select a Back-DROP period to be specified in whole months.  The Back-DROP period shall not exceed the lesser of thirty-six months or the number of months of creditable service accrued after the member first became eligible for regular retirement.  The Back-DROP period shall be the most recent calendar period corresponding to the member's accrued creditable service.

C.  The member's Back-DROP monthly benefit accrual shall be calculated based on the provisions applicable for service retirement set forth in R.S. 11:1632 and 1633, subject to the following conditions:

(1)  Accrued service at retirement, utilized for the purpose of calculating the Back-DROP monthly benefit, shall be reduced by the Back-DROP period.

(2)  Final average compensation, utilized for the purpose of calculating the Back-DROP monthly benefit, shall be calculated by excluding all earnings during the Back-DROP period.

(3)  Employer and employee contributions received by the retirement system during the Back-DROP period and any interest that has accrued on employer and employee contributions received during the period shall remain with the retirement system and shall not be refunded to the member or to the employer.

(4)  The member's Back-DROP monthly benefit shall be calculated based upon the member's age and service and the system provisions in effect on the last day of creditable service before the Back-DROP period.

(5)  At retirement, the member's maximum monthly retirement benefit payable as a life annuity shall be equal to the Back-DROP monthly benefit.

(6)  The member may elect to receive a reduced monthly benefit based upon the member's age and the age of the member's beneficiary as of the actual date of retirement by selecting a retirement option in accordance with the provisions of R.S. 11:1637.  No change in the retirement option so selected or the beneficiary nominated in such selection shall be permitted after the retirement option designation is filed with the board of trustees.

(7)  In addition to the monthly benefit received pursuant to this Subsection, the member shall be paid a lump-sum benefit equal to the Back-DROP maximum monthly retirement benefit multiplied by the number of months selected as the Back-DROP period.

(8)  The member may defer receipt of all or a part of the lump-sum Back-DROP payment.  All amounts which remain credited to the individual's Back-DROP subaccount after termination of participation in the program shall be segregated into a subaccount identified for the benefit of the individual, and such funds shall be placed in liquid asset money market investments at the discretion of the board of trustees.  Such subaccounts shall be credited with interest at the actual rate of return earned in such subaccount investments.  The total amount of any disbursements from the member's subaccount shall in no case be less than the amount of funds credited to the member's subaccount at the time of termination of participation in the program.

(9)  Cost-of-living adjustments shall not be payable based on the Back-DROP account or lump-sum benefit.

(10)  Upon the member's death, any remaining unpaid account balance in the Back-DROP account shall be paid to the member's named beneficiary or, if none, to the member's estate.

(11)  Upon the death of a member who selected the maximum option pursuant to R.S. 11:1637, the member's named beneficiary or, if none, the member's estate shall receive the deceased member's remaining contributions, less the Back-DROP benefit amount.

(12)  Upon the death of a member who selected Option 1 pursuant to R.S. 11:1637, the member's named beneficiary or, if none, the member's estate shall receive the member's annuity savings fund balance as of the member's date of retirement reduced by that portion of the Back-DROP lump-sum payment and his previously paid retirement benefits that are attributable to the member's annuity payments as provided by the annuity savings fund.

Acts 2008, No. 835, §1, eff. July 1, 2008.