§ 11:2227 — Method of financing

§2227. Method of financing
A.(1) All of the assets of the retirement system shall be credited according to the
purpose for which they are held to one of five funds, namely, the Annuity Savings Fund, the
Annuity Reserve Fund, the Pension Accumulation Fund, the Expense Fund, and the deferred
retirement option plan account.
(2)(a) Except as provided in Subparagraph (d) of this Paragraph, each mandatory
reporter shall electronically submit a contributions report to the retirement system no later
than the fifteenth day of each month. Each mandatory reporter shall report the amount of
earnable compensation per employee and shall separately report state supplemental pay and
the amount of compensation paid for overtime. The report shall include other information
prescribed by the board of trustees. A mandatory reporter that did not employ any eligible
employees during the previous month shall submit a contributions report certifying that fact
to the system.
(b) If a mandatory reporter submits a contributions report that is in error as to the
earnable compensation of any member, such an error results in an overpayment of benefits
by the system, and the system is unable to recover through reduction of the member's
benefits, the mandatory reporter is liable to the system for the amount of overpayment and
shall reimburse the system for the full amount of all such overpayments within thirty days
after notification of the discovery of the error or overpayment.
(c) For purposes of this Paragraph, "mandatory reporter" means any municipality
that, within the previous five fiscal years, employed any police officer or chief of police,
regardless of whether such person met the definition of employee.
(d) A mandatory reporter that employed no employee during the previous and current
fiscal year shall only be required to electronically submit an annual contributions report to
the retirement system and certify that it employed no employee in the current fiscal year no
later than the fifteenth day of July of the following fiscal year.
B. Annuity savings fund:
The annuity savings fund shall be the fund in which shall be accumulated
contributions from the compensation of members to provide for their annuities.
Contributions to the annuity savings fund shall be made as follows:
(1)(a) Each municipality shall make deductions from any salary or wages excluding
overtime paid by them to any member of this system in accordance with the provisions of
R.S. 11:62(6) on the earnable compensation paid him in each and every payroll.
(b) In the event that a member begins receiving workers' compensation payments and
the municipality reduces the salary being paid by them, the municipality shall deduct
contributions from the reduced salary being paid and state supplemental pay in an amount
equal to that which would have been deducted had the member not received workers'
compensation payments and continued to receive his full salary by the municipality and state
supplemental pay, provided that the reduced salary is sufficient to cover the full deduction.
(c) In the event that the reduced salary paid by the municipality is not sufficient to
cover the deduction of employee contributions equal to that which would have been deducted
had the member not begun receiving workers' compensation payments, the member may elect
to pay the deficit to make whole the amount due each and every payroll period directly to the
municipality to be forwarded to the retirement system. If the member does not elect to pay
the deficit to make whole the amount that would have been deducted had the member not
begun receiving workers' compensation, that member, for such periods, shall receive service
credit for eligibility determination purposes only and not for computation of benefits.
Beginning on July 1, 2021, if the member does not pay the deficit to make whole the amount
that would have been deducted pursuant to this Section for service each and every pay
period, the member shall not receive service credit for the period in which the deficit was not
paid.
(2) The deductions provided for herein shall be made notwithstanding that the
minimum compensation provided for by law for any member shall be reduced thereby.
Every member shall be deemed to consent and agree to the deductions made and provided
for herein and shall receipt for his full salary or compensation, and payment of salary or
compensation less said deductions shall be a full and complete discharge and acquittance of
all claims and demands whatsoever for the services rendered by such person during the
period covered by such payment, except as to the benefits provided under this Chapter. The
employer shall certify to the board of trustees on each and every payroll or in such other
manner as the board of trustees may prescribe, the amounts to be deducted; and each of said
amounts shall be deducted, and when deducted shall be paid into said Annuity Savings Fund,
and shall be credited to the individual account of the member from whose compensation said
deduction was made.
C. Annuity reserve fund:
The annuity reserve fund shall be the fund in which shall be held the reserves on all
annuities in force and from which shall be paid all annuities and all benefits in lieu of
annuities, payable as provided in this Chapter. Should a beneficiary retired on account of
disability be restored to active service with a compensation not less than his average final
compensation at the time of his last retirement, his annuity reserve shall be transferred from
the annuity reserve fund to the annuity savings fund and credited to his individual account
therein.
D. Pension accumulation fund:
The pension accumulation fund shall be the fund in which shall be accumulated all
reserves for the payment of all pension and benefits payable from contributions made by
employers. Contributions to and payments from the pension accumulation fund shall be
made as follows:
(1)(a) In addition to the assessment collected above, each municipality which has
employees on its police force who become members in this retirement system shall
contribute the employer contribution rate as determined in R.S. 11:103, and shall remit this
amount monthly to the system.
(b) In the event a member begins receiving worker's compensation payments and the
municipality reduces the salary being paid by it, the municipality shall continue to contribute
an amount equal to that which would have been contributed by them had the member not
received worker's compensation and continued to be paid his full salary and state
supplemental pay provided the reduced salary is sufficient to deduct the full employee's
contribution due.
(c) In the event the reduced salary paid by the municipality is not sufficient for the
municipality to deduct the full employee's contribution which would have been deducted had
the member not begun receiving worker's compensation and the member elects not to pay the
deficit, no employer contributions shall be due on the portion of earnable compensation for
which the member elects not to contribute.
(d) Fifty percent of the proceeds from the sale and issuance of certificates or other
evidence of competency or authority to bona fide residents of the city of New Orleans to
operate motor vehicles on the streets of the city of New Orleans, particularly drivers' and
chauffeurs' licenses, and whether or not the same are levied and collected by authority of the
commission council of the city of New Orleans or the state of Louisiana, or any department,
board, commission, or agency of the city or state, shall be paid to and shall be used for
paying the operating expenses of the police pension fund for the police department of the city
of New Orleans. The proper official, department, board, commission, or agency charged
with the collection of such funds shall make the payments to the board of the pension fund.
Any proceeds in excess of the amount needed to pay for the operating expenses of the New
Orleans police pension fund not otherwise covered as provided in R.S. 11:3635.1(B)(3) shall
be paid by the entity responsible for collection to the Municipal Police Employees'
Retirement System. Such proceeds shall be applied to meet the city's required employer
contribution due to the system.
(2) Delinquent payments due under R.S. 11:2227(B)(1) and 2227(D)(1) may be
recovered through either of the following actions:
(a) Upon certification to the state treasurer and written notice to the municipality by
the director that a municipality's monthly report and payment of contributions is delinquent,
the state treasurer shall deduct the amount of the delinquent contributions from any monies
then available for distribution to or for the benefit of that municipality and shall transmit said
amount directly to the board of trustees of the retirement system. Upon making such a
deduction, the state treasurer shall immediately notify the municipality that the deduction has
been made and that the funds available for distribution to it are reduced accordingly. In like
manner, the director of the system, upon receipt of said funds, shall credit such funds to the
proper account affected thereby and shall notify the municipality thereof; or
(b) Through an action initiated in a court of competent jurisdiction against the
political subdivision or instrumentality liable therefor together with interest charged at the
legal rate computed from the date the payment became delinquent.
(3) On the basis of regular interest and of such mortality and other tables as shall be
adopted by the board of trustees, the actuary engaged by the board to make each valuation
required by this Chapter during the period over which the accrued liability contribution is
payable, immediately after making such valuation, shall determine the uniform and constant
percentage of the compensation of the average new entrant, which if contributed on the basis
of compensation of such new entrant throughout the entire period of active service would be
sufficient to provide for the payment of any pension payable on his account. The rate percent
so determined shall be known as the "normal contribution" rate. After the accrued liability
contribution has ceased to be payable, the normal contribution rate shall be the rate percent
of the earned salary of all members obtained by deducting from the total liabilities of the
Pension Accumulation Fund the amount of funds on hand to credit of that fund and dividing
the remainder by one percent of the present value of the prospective future salaries of all
members as computed on the basis of the mortality and service tables adopted by the board
of trustees and regular interest. The normal rate of contribution shall be determined by the
actuary after each valuation.
(4) Upon the retirement of a member, an amount equal to his pension reserve, less
the amount of his annuity savings account, shall be transferred from the pension
accumulation fund to the annuity reserve fund. At the same time the amount of his annuity
savings account shall also be transferred to the annuity reserve fund.
(5) The board of trustees shall transfer annually from the pension accumulation fund
to the expense fund an amount equal to seventy-five thousand dollars, which shall be
increased according to inflation as determined by the Consumer Price Index.
E. Expense fund:
The expense fund shall be the fund from which the expenses of the retirement system
shall be paid, exclusive of amount payable as retirement allowances and other benefits
provided therein. Contributions shall be made to the expense fund as follows:
(1) The board of trustees shall determine annually the amount required to defray such
expenses for the ensuing fiscal year and shall have the right to transfer the amount required
to defray the cost of expenses of administration from the amount transferred from the
pension accumulation fund.
F. Collections of contributions:
(1) The collection of members' contributions shall be as follows:
(a) Each municipality shall cause to be deducted on each and every payroll of a
member for each and every payroll period subsequent to the date of establishment of the
retirement system the contributions payable by such member as provided in this Chapter.
(b) The treasurer, or other officer authorized to issue warrants, shall make deductions
from salaries of members as provided in this Chapter, and shall transmit monthly the amount
specified to be deducted to the secretary of the board of trustees. The secretary of the board
of trustees after making a record of all such receipts shall deposit them in a bank or banks
selected by the board of trustees.
(2) The collection of employers' contributions, if and when assessed or required,
shall be as follows:
(a) Upon the basis of each actuarial valuation provided herein, the board of trustees
shall annually prepare a statement of the total amount necessary for the ensuing fiscal year
to the pension accumulation and expense funds as provided under Subsections D and E of
this Section.
G. The deferred retirement option plan shall be the account in which all payments
made pursuant to R.S. 11:2221(E)(3) accumulate. Interest shall be credited to the account
as provided by R.S. 11:2221(G).
H. Repealed by Acts 1992, No. 262, §2.
I. Repealed by Acts 1992, No. 262, §2.
J.(1) If any employer fails to transmit either employer's contributions or member's
contributions within five days after their due date, the payment shall be delinquent. As used
in this Subsection, "due date" means the close of the tenth day after the end of the month for
which payment of employer's and member's contributions is applicable or deducted. In
addition to the employer and member contributions owed, the employer shall submit an
amount determined in accordance with Paragraph (2) of this Subsection.
(2)(a) Interest charged at the legal rate shall be due from the date the payment
became delinquent.
(b) Any employer who becomes delinquent for a period in excess of ninety days in
the collection and remittance of the amounts due as monthly contributions is also subject to
a penalty of twenty-five percent of the aggregate monthly contributions due.
(c) Any employer who becomes delinquent for a period in excess of one hundred and
eighty days in the collection and remittance of the amounts due as monthly contributions is
liable for the greater of the amounts in Subparagraphs (a) and (b) of this Paragraph and an
amount equal to the actuarial cost of a purchase of the service credit for which contributions
were not timely paid calculated by the system's actuary pursuant to R.S. 11:158(C).
(d) The employer that failed to transmit the required contributions in a timely manner
shall also reimburse the system any legal and actuarial fees paid by the system in the
collection of amounts pursuant to this Paragraph.
NOTE: See Acts 1986, No. 605, §§1, 2, 5, 6.

Legislative History

Added by Acts 1973, No. 189, §1. Amended by Acts 1974, No. 389, §1; Acts 1975, No. 377, §1; Acts 1976, No. 603, §6; Acts 1977, No. 601, §1; Acts 1978, No. 537, §1; Acts 1981, No. 230, §1; Acts 1984, No. 475, §2; Acts 1985, No. 177, §1, eff. July 6, 1985; Acts 1986, No. 605, §3; Acts 1988, 2nd Ex. Sess., No. 6, §3, eff. Oct. 31, 1988; Acts 1990, No. 43, §1, eff. June 26, 1990; Acts 1990, No. 420, §1, eff. July 1, 1990; Acts 1990, No. 573, §1, eff. July 1, 1990; Redesignated from R.S. 33:2380 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1992, No. 262, §2; Acts 1992, No. 553, §1, eff. July 1, 1992; Acts 2004, No. 793, §1, eff. July 8, 2004; Acts 2020, No. 124, §1, eff. July 1, 2020; Acts 2024, No. 673, §1, eff. July 1, 2024.