§ 11:784.1

Louisiana § 11:784.1

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

Text

§784.1. Maximum benefits
A.(1) Notwithstanding any other provision of this system to the contrary, the member contributions paid to and retirement benefits paid from the plan shall be limited to such extent as may be necessary to conform to the requirements of Section 415 of the Internal Revenue Code for a qualified pension plan.
(2) Basic 415(b) limitation. (a) Before January 1, 1995, a member shall not receive an annual benefit that exceeds the limits specified in Section 415(b) of the Internal Revenue Code, subject to the applicable adjustments in that Section. On and after January 1, 1995, a member shall not receive an annual benefit that exceeds the dollar amount specified in Section 415(b)(1)(A) of the Internal Revenue Code, subject to the applicable adjustments in Section 415(b) of the Internal Revenue Code and subject to any additional limits that may be specified in the retirement system. In no event shall a member's annual benefit payable under the plan in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code and the regulations thereunder.
(b) For purposes of Section 415(b) of the Internal Revenue Code, "annual benefit" means a benefit payable annually in the form of a straight life annuity with no ancillary benefits without regard to the benefit attributable to after-tax employee contributions, except pursuant to Section 415(n) of the Internal Revenue Code, and to rollover contributions, as defined in Section 415(b)(2)(A) of the Internal Revenue Code. The "benefit attributable" shall be determined in accordance with Treasury regulations.
B. Adjustments in 415(b) limitation. (1) If the annual benefit begins before the member attains age sixty-two, the limit prescribed by this Section, as adjusted, shall be reduced in accordance with Treasury regulations pursuant to the provisions of Section 415(b) of the Internal Revenue Code, so that such limit, as so reduced, equals an annual straight life benefit when such retirement income benefit begins that is equivalent to a one hundred sixty thousand dollar annual benefit, as adjusted, beginning at age sixty-two. The reduction provided for in this Paragraph shall not be applicable:
(a) In the event the member's benefit is based on fifteen years of military service; or
(b) To pre-retirement disability benefits or pre-retirement death benefits.
(2) Effect of cost-of-living adjustments. (a) The annual adjusted limit, set forth in Paragraph A(2) of this Section, is effective as of January first of each calendar year and is applicable to benefits commencing during that calendar year. As a result of a cost-of-living increase to the limit under Section 415(d) of the Internal Revenue Code, a benefit that had been limited by the provisions of this Section in a previous year may be increased with respect to future payments to the lesser of the new limit or the amount of benefit that would have been payable from this system without regard to the provisions of this Section.
(b) Effective on and after January 1, 2009, for purposes of applying the limits under Section 415(b) of the Internal Revenue Code, referred to in this Paragraph as the "Limit", to a member with no lump sum benefit, the following shall apply:
(i) A member's applicable Limit shall be applied to the member's annual benefit in the member's first limitation year without regard to any cost-of-living adjustments granted under the plan;
(ii) To the extent that the member's annual benefit equals or exceeds the Limit, the member shall no longer be eligible for cost-of-living adjustments until such time as the benefit plus the accumulated increases are less than the Limit; and
(iii) Thereafter, in any subsequent limitation year, a member's annual benefit, including any cost-of-living adjustments granted under the plan, shall be tested under the then-applicable benefit Limit including any adjustment to the Section 415(b)(1)(A) of the Internal Revenue Code dollar limit under Section 415(d) of the Internal Revenue Code, and the regulations thereunder.
(c) Effective on and after January 1, 2009, with respect to a member who receives a portion of the member's annual benefit in a lump sum, a member's applicable Limit will be applied taking into consideration cost-of- living adjustments as required by Section 415(b) of the Internal Revenue Code and applicable Treasury regulations.
(3) Annual benefits may not be paid in an amount greater than the accrued benefit under the plan. The maximum benefit limit, set forth in Paragraph A(1) of this Section, shall apply to a single-life annuity. If the benefit is payable in a form other than a single-life annuity, the maximum limit shall apply to the pension that is the actuarial equivalent of such single-life annuity, using an applicable interest rate and mortality table as prescribed by the Internal Revenue Service.
C. (1) Ten Thousand Dollar Limit. The retirement benefit payable with respect to a member shall be deemed not to exceed the limit under Section 415 of the Internal Revenue Code if the benefits payable, with respect to such member under this plan and under all other qualified defined benefit pension plans to which the member's employer contributes, do not exceed ten thousand dollars for the applicable limitation year and for any prior limitation year and the employer has not at any time maintained a qualified defined contribution plan in which the member participated.
(2) Less than Ten Years of Participation or Service Adjustment for 415(b) Limitations. The maximum retirement benefits payable to any member who has completed less than ten years of service shall be the amount determined under Paragraph A(2) of this Section, as adjusted under Subsection B of this Section, multiplied by a fraction, the numerator of which is the number of the member's years of participation and the denominator of which is ten. The limit under Paragraph C(1) of this Section, concerning the ten thousand dollar limit, shall be similarly reduced for any member who has accrued less than ten years of service, except the fraction shall be determined with respect to years of service instead of years of participation. The reduction provided by this Paragraph shall not reduce the maximum benefit below ten percent of the limit determined without regard to this Paragraph. The reduction provided for in this Paragraph cannot be applicable to pre-retirement disability benefits or pre-retirement death benefits.
D.(1) If a member is or has been a participant in one or more defined contribution plans maintained by the employer, the sum of the annual additions under such defined contribution plan or plans may not exceed the limit under Section 415(c) of the Internal Revenue Code.
(2) The 415(b) limit with respect to any member who at any time has been a member in any other defined benefit plan as defined in Section 414(j) of the Internal Revenue Code maintained by the member's employer shall apply as if the total benefits payable under all such defined benefit plans in which the member has been a member were payable from one plan.
(3) Effective on and after January 1, 2000, the limit under Section 415(e) of the Internal Revenue Code shall no longer apply.
E.(1) If the United States Congress or the United States Internal Revenue Service, or both, later cause to be amended, any laws, regulations, or other guidelines pertaining to Section 415 of the United States Internal Revenue Code in order to permit higher service retirement benefits, then, for any retired member who had previously had a benefit reduced because it exceeded the limits set forth in this Section, the board shall recalculate the retired member's benefit to be the smaller of either:
(a) The unreduced benefit based on this system's service retirement benefit formula in effect on the date the member retired.
(b) The maximum permissible benefit calculated under such amended laws or regulations.
(2) If a retroactive change is permissible, the board shall pay the retired member in a single payment an amount equal to the difference between the adjusted higher monthly benefit and the reduced benefit for the number of months the member has received the reduced benefit. However, no member shall receive any benefit under this Section to the extent that he has received a distribution with respect to such benefit from an excess benefit plan as set forth in Part IX of this Chapter.
F. The board of trustees shall make no actuarial adjustment under this Section by reason of the member's retirement after normal retirement age.
G. The board of trustees shall adopt rules for the administration of the limits provided in this Section and the limitations under Section 415 of the Internal Revenue Code, including adjustments in the annual dollar limitation to reflect cost-of-living adjustments authorized by the Internal Revenue Service.
Acts 1999, No. 356, §1, eff. July 1, 1999; Acts 2010, No. 637, §1, eff. July 1, 2010; Acts 2014, No. 727, §1, eff. July 1, 2014.