§ 11:2262 — Method of financing

Louisiana § 11:2262

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

Text

§2262. Method of financing
A. 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 Reserved Fund, the Pension Accumulation Fund, the Expense Fund, and the
deferred retirement option plan account.
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) Each municipality, parish, and fire protection district shall make deductions from
any salary or wages excluding overtime, except as provided in R.S. 11:233(B), paid by them
to any member of this fund equal to eight percent of the earnable compensation paid him in
each and every payroll after the effective date of this Subpart.
(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 Subpart. 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.
(3) Each municipality, parish, and fire protection district may pay the member's
contributions required by Paragraph (1) herein, for all salary or wages excluding overtime,
except as provided in R.S. 11:233, paid by them, earned on or after January 1, 1989. If a
municipality, parish, and fire protection district decides not to pay the member's
contributions, the required contributions shall continue to be deducted from the member's
salary as provided in Paragraph (1). If the contributions are paid, they shall be treated as
employer contributions in determining tax treatment under the United States Internal
Revenue Code and the employee's participation shall not be optional; however, the
municipality, parish, or fire protection district shall continue to withhold federal and state
income taxes based upon these contributions until the Internal Revenue Service or the federal
courts rule that pursuant to Section 414(h) of the United States Internal Revenue Code, these
contributions shall not be included as gross income of the firefighters until such time as they
are distributed or made available. The municipality, parish, and fire protection district shall
pay these contributions from the same source of funds which is used to pay the salaries of
firefighters. The municipality may pay these contributions by a reduction in the cash salary
of the firefighters or by an offset against a future salary increase or by a combination of a
reduction in salary. If contributions are paid they shall be considered for all purposes of this
Paragraph as the member's contributions made prior to the time that contributions were paid.
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 Subpart. 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 pensions and benefits payable from contributions made by
employers. Contributions to and payments from the pension accumulation fund shall be
made as follows:
(1) In addition to the assessment collected above, each municipality, parish, or fire
protection district which has employees on its fire protection force who become members in
the Firefighters' Retirement System shall contribute a baseline amount equal to nine percent
of the earnable compensation, excluding overtime but including state supplemental pay, of
each firefighter eligible for membership in the Firefighters' Retirement System and shall
remit this amount monthly to the Firefighters' Retirement System.
(2)(a) In compliance with the provisions of Article X, Section 29(E)(4) of the
Constitution of Louisiana, delinquent payments due under Paragraph (B)(1) of this Section
and Paragraph (1) of this Subsection may be recovered by action in a court of competent
jurisdiction against the political subdivision or instrumentality liable therefor with interest
for all pertinent periods at a rate equal to the greater of the following:
(i) The actuarial valuation rate.
(ii) An amount equal to the rate of earnings of the system's investment portfolio.
(b) Reasonable attorney fees and court costs shall be recoverable by the Firefighters'
Retirement System:
(i) If any amount of delinquent payments under Paragraph (B)(1) of this Section and
Paragraph (1) of this Subsection are recovered by action in a court of competent jurisdiction
against a political subdivision or instrumentality liable.
(ii) In any concursus proceeding instituted pursuant to Code of Civil Procedure
Article 4651 et seq., wherein the Firefighters' Retirement System is named as a party.
(c) Alternatively, at the request of the Firefighters' Retirement System, and upon due
certification of delinquency to the state treasurer, such amounts shall be deducted from any
other monies payable to such subdivision or instrumentality by any department or agency of
the state and shall be remitted directly to the Firefighters' Retirement System.
(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 Subpart 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
percentum 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
percentum 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 percentum 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 fifteen dollars per member and beneficiary on the
rolls at the end of the fiscal year, but not less than a total of one hundred thousand dollars.
(6) Taxes or assessments may be appropriated to this fund, in addition to the other
sources of contributions specified herein, as necessary to fund the system on the basis of its
accrued liabilities, as shown by actuarial valuation.
E. Expense fund
The expense fund shall be the fund from which the expense of the retirement system
shall be paid, exclusive of amount payable as retirement allowances and other benefits
provided therein. 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, parish, or fire protection district 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 Subpart.
(b) The treasurer, or other officer authorized to issue warrants, shall make deductions
from salaries of members as provided in this Subpart, and shall transmit monthly the amount
specified to be deducted to the secretary of the board of trustees. After making a record of
all such receipts, the secretary of the board of trustees 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: 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 shall be
accumulated all payments made pursuant to R.S. 11:2257. Interest shall be credited to the
account as provided by R.S. 11:2257(F)(2).
H. Notwithstanding the provisions of this Section or any other law to the contrary,
the city of Monroe, at its discretion, is authorized to pay to the system, from its own funds,
the employee contributions referenced in this Section, and to take appropriate legal and
administrative action to otherwise be in compliance with local, state, and federal laws.
I. Notwithstanding the provisions of this Section or any other law to the contrary, the
city of Port Allen, at its discretion, is authorized to pay to the system, from its own funds, the
employee contributions referenced in this Section, and to take appropriate legal and
administrative action to otherwise be in compliance with local, state, and federal laws. The
amount of any employee contributions paid by the city of Port Allen shall not be included
in the earnable compensation of the members as defined in R.S. 33:2152(13).

Legislative History

Acts 1979, No. 434, §1; Acts 1980, No. 799, §3; Acts 1984, No. 450, §2; Acts 1984, No. 460, §1; Acts 1985, No. 177, §1; Acts 1988, No. 138, §1; Acts 1990, No. 43, §1; Redesignated from R.S. 33:2160 by Acts 1991, No. 74, §3, eff. June 25, 1991; Amended by Acts 1991, No. 57, §1, eff. June 25, 1991; Acts 2003, No. 719, §1, eff. June 27, 2003; Acts 2008, No. 114, §1, eff. June 9, 2008; Acts 2021, No. 250, §1.