RS 11:2227 Method of financing
§2227. 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 Reserve 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 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.
(a) In the event a member begins receiving worker's 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 worker's compensation payments and continued to receive his full salary by the municipality and state supplemental pay, provided the reduced salary is sufficient to cover the full deduction.
(b) In the event 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 worker's 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 he not begun receiving worker's compensation, that member, for such periods, shall receive service credit for eligibility determination purposes only and not for computation of benefits.
(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 shall be accumulated all payments made pursuant to R.S. 11:2221. Interest shall be credited to the account as provided by R.S. 11:2221(F)(2).
H. Repealed by Acts 1992, No. 262, §2.
I. Repealed by Acts 1992, No. 262, §2.
J. Should any municipality or other employer refuse to transmit either employer's contributions or member's contributions within five days after its 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.
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.
NOTE: See Acts 1986, No. 605, §§1, 2, 5, 6.