§ 11:1644 — Back-Deferred Retirement Option Program

Louisiana § 11:1644

• Jurisdiction: Louisiana
• Title 11: Consolidated Public Retirement Systems

Text

§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Plan and who has not rescinded his participation period shall not be eligible to elect to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) Average final 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 for no more than ninety days from the date the account is funded by the system. No
part of the lump sum may be withdrawn prior to confirmation of the member's benefit by the
actuary. 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.

Legislative History

Acts 2008, No. 835, §1, eff. July 1, 2008; Acts 2013, No. 220, §3, eff. June 11, 2013; Acts 2022, No. 97, §1, eff. June 30, 2022.