RS 11:450 Termination of participation
§450. Termination of participation
A. Upon termination of participation in both the plan and employment, a participant shall:
(1) At the participant's option, receive either a lump sum payment from the account equal to the amount then credited to his individual subaccount; or systematic disbursements based on his individual subaccount in any manner approved by the board; and
(2) Begin to receive regular monthly retirement benefits based on the option selected at the time of election to participate in the plan, as adjusted pursuant to Subsection D of this Section.
(3) For the purposes of this Section, a termination of employment shall not mean a termination from one position covered by the system to take another position covered by the system, as long as there is no break in service.
NOTE: Subsection B eff. until July 1, 2009, or sixty days after a final judgment, whichever is later. See Acts 2008, No. 714, §§ 1, 3.
B. Upon termination of participation in the plan but not employment, credits to the account shall cease and no retirement benefits shall be paid to the participant until employment is terminated. The balance in the participant's subaccount shall be placed in a self-directed subaccount in the name of the participant as provided for in R.S. 11:451.1, and the participant shall then be bound by the provisions of said Section. No payment shall be made based on credits in the subaccount until employment is terminated as defined in this Section. The participant may continue employment after termination of participation in the plan for the sole purpose of accruing a supplemental benefit, and employer and employee contributions shall resume. Correction officers, probation and parole officers, and security officers of the Department of Public Safety and Corrections; peace officers of the Department of Public Safety and Corrections, office of state police, other than state troopers, as provided in R.S. 11:444(A)(2)(b); and personnel employed by the Department of Revenue, office of alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c), who have ended their participation in the Deferred Retirement Option Plan but not employment shall make contributions at the rate established in R.S. 11:62(5)(b).
NOTE: Subsection B as amended by Acts 2008, No. 714, §1, eff. July 1, 2009, or sixty days after a final judgment, whichever is later.
B.(1) Upon termination of participation in the plan but not employment, credits to the account shall cease and no retirement benefits shall be paid to the participant until employment is terminated. If the participant chooses to enter the self-directed portion of the plan, the balance in the participant's subaccount shall be placed in a self-directed subaccount in the name of the participant as provided for in R.S. 11:451.1, and the participant shall then be bound by the provisions of that Section. If the participant chooses not to enter the self-directed portion of the plan, the balance in the participant's subaccount shall be maintained and managed by the system in a separate subaccount in his name, subject to the provisions of Paragraph (2) of this Subsection. No payment shall be made based on credits in the subaccount until employment is terminated as defined in this Section. The participant may continue employment after termination of participation in the plan for the sole purpose of accruing a supplemental benefit, and employer and employee contributions shall resume. Correction officers, probation and parole officers, and security officers of the Department of Public Safety and Corrections; peace officers of the Department of Public Safety and Corrections, office of state police, other than state troopers, as provided in R.S. 11:444(A)(2)(b); and personnel employed by the Department of Revenue, office of alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c), who have ended their participation in the Deferred Retirement Option Plan but not employment shall make contributions at the rate established in R.S. 11:62(5)(b).
(2)(a) Any individual who became or becomes eligible to participate in the Deferred Retirement Option Plan on or after January 1, 2004, may make an irrevocable written election to waive his rights as set forth in Article X, Section 29 of the Constitution of Louisiana, relative to the interest earned by his Deferred Retirement Option Plan account. For any such person who has made such irrevocable election, upon termination of participation in the plan, his individual account balance in the plan shall earn interest on those particular funds at a rate equal to the actuarial rate of return on the system's portfolio for each fiscal year as certified by the system's actuary in the actuarial report, less one-half of one percent. However, by making such an election, the person shall expressly acknowledge that his account shall be debited in the event the system's investment portfolio experiences a negative earnings rate. The member shall further expressly acknowledge his consent to having the value of his account balance permanently reduced as a result of the devaluation of system assets caused by such a negative earnings rate. As a precondition of making this election, the member shall expressly acknowledge his understanding of the possibility of such account reductions.
(b) The provisions of this Paragraph shall apply prospectively only, beginning on the effective date of the Paragraph. Any member who participated in the Deferred Retirement Option Plan between January 1, 2004, and the effective date of this Paragraph may make the election authorized by R.S. 11:449(A)(2) and the election authorized by Subparagraph (a) of this Paragraph only within the sixty days after the effective date of this Paragraph. Any participant making such election shall earn interest on his individual account balance as provided in Subparagraph (a) of this Paragraph from the later of the date his participation in the plan ends or the date the system receives his funds from the third-party provider. However, any such person who has terminated employment and retired from state service on the effective date of this Paragraph shall only be able to make such election as to those funds in his subaccount that were never disbursed and are still being managed by the third-party provider in accordance with R.S. 11:451.2 and only to the extent otherwise permitted by federal law as determined by the system, with the administrative and legal costs of such determination to be paid directly by the individual making the election. Any member who becomes eligible for participation in the Deferred Retirement Option Plan after the effective date of this Paragraph may only make the election authorized by R.S. 11:449(A)(2) and Subparagraph (a) of this Paragraph prior to participation in the plan.
(c) Any individual who does not elect to waive his rights pursuant to Subparagraph (a) of this Paragraph shall continue to be governed by the provisions applicable to participants in the self-directed portion of the plan.
(d) The board of trustees may make, alter, amend, and promulgate rules necessary for the implementation and administration of this Paragraph.
C. If the participant dies, whether still participating in the Deferred Retirement Option Plan or after participation but while still employed, his credits and benefits, if any, that are due to his beneficiaries shall be payable as if he had retired immediately prior to death and his retirement was in accordance with R.S. 11:441 through 446 for a regular member, R.S. 11:562 and 562.1 for judges and court officers, and R.S. 11:591 for wildlife agents.
D. Monthly retirement benefits payable to a participant after termination of participation in the plan and employment shall be calculated as follows:
(1) There shall be a "base benefit" which shall equal the participant's monthly credit to the account as calculated at the time of the participant's entry into the plan.
(2) If the participant does not continue employment after termination of participation in the plan, his monthly retirement benefit shall equal his base benefit.
(3) If the participant continues employment after termination of participation in the plan for a period of less than thirty-six months, his monthly retirement benefit shall equal his base benefit plus a supplemental benefit based upon the service credit for the additional employment, based upon the final average compensation used to calculate the monthly credit. If the employment is for less than three months, then the service credit shall be rounded to the nearest tenth.
(4) If the participant continues employment after termination of participation in the plan for a period of thirty-six months or more, his monthly retirement benefit shall equal his base benefit plus a supplemental benefit based upon the service credit for the additional employment, based upon the final average compensation for the period of employment after termination of participation in the plan.
(5) The amount of unused sick and annual leave at the time of termination may be converted to retirement credit under the provisions of R.S. 11:424. If a participant continues employment for less than three years after termination of participation in the plan, then unused sick and annual leave shall be used to compute a supplemental benefit using the member's final average compensation as provided in Paragraph (D)(1) of this Section. If a participant continues employment for more than three years after termination of participation in the plan, then unused sick and annual leave shall be used to compute a supplemental benefit using the member's final average compensation as provided in Paragraph (D)(4) of this Section.
(6) In no instance shall a supplemental benefit and a base benefit, added together, exceed one hundred percent of the applicable final average compensation.
Acts 1990, No. 14, §1, eff. Jan. 1, 1991; Redesignated from R.S. 42:578.4 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1995, No. 1110, §1, eff. Jan. 1, 1996; Acts 1997, No. 525, §1, eff. July 3, 1997, retroactive to Jan. 1, 1991; Acts 1999, No. 1320, §1, eff. July 12, 1999; Acts 2001, No. 308, §1, eff. June 6, 2001; Acts 2003, No. 818, §1, eff. Jan. 1, 2004; Acts 2006, No. 835, §1, eff. July 1, 2006; Acts 2007, No. 353, §1, eff. June 30, 2007; Acts 2008, No. 714, §1, eff. July 1, 2009, or sixty days after a final judgment, whichever is later.
NOTE: See Acts 2004, No. 7, §6, providing that the Act shall not affect or change any law relative to retirement or retirement or survivor benefits of employees of the Dept. of Public Safety and Corrections.