RS 444 - Computation of retirement benefit
A.(1)(a)(i) A member who retires effective on or after July 1, 1973, shall receive a maximum retirement allowance equal to two and one-half percent of average compensation, as determined under R.S. 11:231, for every year of creditable service, plus three hundred dollars.
(ii) Any member whose first employment making him eligible for membership in one of the state systems occurred on or after January 1, 2011, shall receive an additional benefit equal to one percent times the number of years of creditable service as a judge in a position specified in R.S. 11:553(1), (3) through (5), (7), and (10) through (15) times his average compensation.
(b) The additional sum of three hundred dollars referenced in Subparagraph (a) of this Paragraph shall only apply to a person who became a member prior to July 1, 1986.
(2)(a) Public safety service employees as those employees are referred to as "member" or "members" in R.S. 11:601(B) whose first employment making them eligible for membership in one of the state systems occurred on or before December 31, 2010, shall receive a retirement allowance computed in accordance with R.S. 11:602.
(b) Peace officers, as defined by R.S. 40:2402(3)(a), employed by the Department of Public Safety and Corrections, office of state police, other than state troopers, whose first employment making them eligible for membership in one of the state systems occurred on or before December 31, 2010, shall receive a maximum retirement allowance in accordance with the following:
(i)(aa) Any person employed as a peace officer by the Department of Public Safety and Corrections on or before June 30, 2006 shall receive a benefit equal to three and one-third percent of average compensation, for every year of creditable service in the retirement system whether or not such service was rendered as a peace officer, not to exceed one hundred percent of the member's average compensation.
(bb) Any person employed as a peace officer by the Department of Public Safety and Corrections as determined under R.S. 11:231, on or before June 30, 2006, who was participating in the Deferred Retirement Option Plan on June 30, 2007, or who had continued in employment as of such date after completion of plan participation shall have his base benefit recalculated to reflect the increase in benefits provided pursuant to Subitem (aa) of this Item. The balance in his plan account and any subsequent contributions to such account shall be increased to reflect such benefit increase.
(ii) Any person first employed as a peace officer by the Department of Public Safety and Corrections after June 30, 2006, whose first employment making them eligible for membership in one of the state systems occurred on or before December 31, 2010, shall receive a benefit equal to three and one-third percent of average compensation for every year of creditable service as a peace officer employed by the Department of Public Safety and Corrections not to exceed one hundred percent of the member's average compensation.
(iii) Any peace officer to whom this Subparagraph applies who continues in employment after participation in the Deferred Retirement Option Plan shall receive a supplemental benefit pursuant to R.S. 11:450(D) for such continued employment calculated using the accrual rate of three and one-third percent.
(c)(i) Full-time law enforcement personnel, supervisors, and administrators who are employed with the Department of Revenue, office of alcohol and tobacco control, on June 30, 2007, who are P.O.S.T.-certified, who have the power to arrest, and who hold a commission from such office shall receive a maximum retirement allowance equal to three and one-third percent of average compensation for:
(aa) Every year of creditable service in the retirement system earned on or before June 30, 2007, as a peace officer as defined in R.S. 40:2402(3)(a) in compliance with the certification requirements applicable when such credit was earned, whether or not such service was rendered as such a commissioned alcohol and tobacco control officer, and
(bb) Every year of creditable service earned thereafter as such a commissioned alcohol and tobacco control officer.
(ii) Full-time law enforcement personnel, supervisors, and administrators who become employed by the Department of Revenue, office of alcohol and tobacco control, on or after July 1, 2007, whose first employment making them eligible for membership in one of the state systems occurred on or before December 31, 2010, who are P.O.S.T.-certified, who have the power to arrest, and who hold a commission from such office shall receive a maximum retirement allowance equal to three and one-third percent of average compensation for every year of creditable service in the retirement system earned as such a commissioned alcohol and tobacco control officer.
(d)(i) Probation and parole officers in the office of adult services of the Department of Public Safety and Corrections who were employed on or before December 31, 2001, who did not join the secondary component of this system pursuant to R.S. 11:605(A), and who retire or begin participation in the Deferred Retirement Option Plan on or after July 1, 2014, shall receive a maximum retirement allowance equal to three percent of average compensation, as determined pursuant to R.S. 11:403(5), for every year of creditable service in the retirement system before July 1, 2014, and three and one-third percent of average compensation, as determined by R.S. 11:403(5), for every year of creditable service in the retirement system on or after July 1, 2014.
(ii) A probation and parole officer to whom this Subparagraph otherwise applies, but who entered the Deferred Retirement Option Plan before July 1, 2014, and who continues in employment after participation in the plan shall receive a supplemental benefit pursuant to R.S. 11:450(D) for such continued employment. Such supplemental benefit shall be calculated using the accrual rate of three percent for post-participation employment before July 1, 2014, and three and one-third percent for such employment on or after July 1, 2014.
(iii) Nothing in this Subparagraph shall be construed to allow recalculation of benefits for any retiree, or of base benefits as defined in R.S. 11:450(D) for any Deferred Retirement Option Plan participant, or for any person who continued in employment after completing participation in such plan.
(3) In computing retirement allowances, any fractional period of service shall be taken into account and a proportionate amount of such retirement allowance, annuity, or benefit shall be granted. The retirement benefits provided pursuant to the provisions of this Chapter shall not exceed one hundred percent of the member's average compensation.
B.(1) The normal retirement benefit of any member of the retirement system who is a qualified participant cannot exceed the greater of: the accrued benefit at retirement of the member as if such benefit were computed under R.S. 11:444(A) as in effect on October 14, 1987, or the limitation provided in R.S. 11:444(C) as if the qualified participant were not a qualified participant. Any election made by the member after October 14, 1987, which would have had the effect of reducing such benefit, such as an election under I.R.C. §125 or I.R.C. §457, shall be considered as not reducing the accrued benefit referred to in the preceding sentence.
(2) "Qualified participant" shall mean a member of the system who first became a member before January 1, 1990. In the case of the merger of, or transfer of assets and benefits of a member or members from, another plan maintained by an employer which joins this system, the accrued benefit under such predecessor plan shall be the accrued benefit referred to above, and the member shall be considered a qualified participant if his participation in such predecessor or merged plan commenced on or before January 1, 1990.
(3) All employers contributing to the system on behalf of their employees, and all employers who may join the system, as a condition of such joining, shall elect, and such election is hereby implemented, to have the limitations of Section 415(b) of the Internal Revenue Code other than the Paragraph (2)(G) thereof applied, which limitations are set forth in Subsection C of this Section. Such limitations shall apply to all members who are not qualified participants as described herein.
C. The retirement benefit of any member of this system who is not a qualified participant, as defined in Paragraph (B)(2) of this Section, when expressed as an annual benefit may not exceed the lesser of either the annual benefit authorized by Section 415(d) of the United States Internal Revenue Code or one hundred percent of such member's average compensation for his highest three years. For purposes of determining whether a member's benefit exceeds the limitations of this Subsection, the following shall apply:
(1) Adjustment if benefit not single life annuity. (a) If the normal form of benefit is other than a single life annuity, such form shall be adjusted actuarially to the equivalent of a single life annuity. This single life annuity shall not exceed the maximum dollar or percent limitations outlined in the Introductory Paragraph of this Subsection.
(b) No adjustment is required for the following: qualified joint and survivor annuity benefits; pre-retirement disability benefits; pre-retirement death benefits; and post-retirement medical benefits.
(2) Adjustment if benefit commences before age sixty-two. (a) If benefit distribution commences before age sixty-two, the actual retirement benefit shall not exceed the lesser of one hundred percent of the member's average compensation or the adjusted dollar limitation. The adjusted dollar limitation shall be the equivalent, determined in a manner consistent with reduction of benefits for early retirement under Section 415 of the Internal Revenue Code and related federal regulations, of one hundred sixty thousand dollars, as of January 1, 2002, adjusted annually pursuant to Section 415(d) of the Internal Revenue Code, commencing at age sixty-two. For purposes of this adjustment, survivor benefits, that portion of a joint and survivor annuity which is the survivor benefit, and any other ancillary benefits shall not be taken into account.
(b) No adjustment is required for a member with at least fifteen years of creditable service as a full-time employee of any police department or fire department which is organized and operated to provide police protection, firefighting services, or emergency medical services.
(3) Adjustment if benefit commences after age sixty-five. If benefit distribution commences after age sixty-five, the dollar limitation shall be increased, as provided for in Section 415 of the Internal Revenue Code and related federal regulations, to the equivalent of one hundred sixty thousand dollars, as of January 1, 2002, adjusted annually pursuant to Section 415(d) of the Internal Revenue Code, commencing at age sixty-five.
(4) Interest assumption. The interest rate used for adjusting the maximum limitations above shall be:
(a) For benefits commencing before age sixty-two and for forms of benefit other than straight life annuity, the greater of:
(i) Five percent.
(ii) The rate used to determine actuarial equivalence for other purposes of this retirement system.
(b) For benefits commencing after age sixty-five, the lesser of:
(i) Five percent.
(ii) The rate used to determine actuarial equivalence for other purposes under this retirement system.
(5) Adjustment for less than ten years of participation or service. (a) If retirement benefits are payable under this retirement system to a member who has less than ten years of participation in the retirement system, the dollar limitation referred to in the Introductory Paragraph of this Subsection will be multiplied by a fraction, the numerator of which is the member's number of years of participation in the system, and the denominator of which is ten.
(b) If retirement benefits are payable under this retirement system to a member who has less than ten years of service with the employer, the percentage limitation referred to in the Introductory Paragraph of this Subsection and the dollar limitation referred to in Paragraph (8) of this Subsection will be multiplied by a fraction, the numerator of which is the member's number of years of service with the employer and the denominator of which is ten.
(6) Annual adjustment. The annual benefit limitation, which is based on Section 415(d) of the United States Internal Revenue Code, as provided in this Subsection, shall be adjusted annually to the maximum dollar limits allowable by the secretary of the Treasury of the United States under Section 415(d) of the Internal Revenue Code. Such adjustments shall not take effect until the first day of each fiscal year following December 31, 1987. The adjustment shall not exceed the adjustment in effect for the calendar year in which the fiscal year of the system begins.
(7) Member or participant in more than one plan. If a member is a member or participant in more than one defined benefit pension plan maintained by the state, its agencies, or its political subdivisions, then such member's benefit, considered in the aggregate after taking into account the benefits provided by all such retirement plans, shall not exceed the limits provided in this Subsection.
(8) Total annual benefits not in excess of ten thousand dollars. Notwithstanding the provisions of this Subsection, the benefits payable with respect to a participant under any defined benefit plan shall be deemed not to exceed the limitations of this Subsection if both of the following apply:
(a) The retirement benefits payable with respect to such participant under such plan and under all other defined benefit plans of the employer do not exceed ten thousand dollars for the plan year, or for any prior plan year.
(b) The employer has not at any time maintained a defined contribution plan in which the participant participated.
(9) Average compensation. (a) For purposes of Subsection A of this Section, average compensation shall include any amounts properly considered as the regular rate of pay of the member, as defined in R.S. 11:231 and unreduced by amounts excluded from income for federal income tax purposes by reason of Section 414(h), Section 125, or Section 457 of the Internal Revenue Code or any other provision of federal law of similar effect.
(b) For purposes of this Subsection, average compensation shall include total compensation payable by the employer and included in the employee's income for federal income tax purposes and shall exclude amounts not includable in the member's gross income by reason of Section 414(h) of the Internal Revenue Code. A member's highest three years shall be the period of three consecutive calendar years during which the member both was an active participant in the plan and had the greatest aggregate compensation from the employer.
(10) Annual compensation limitation for determination of benefits. Unless otherwise provided in this Chapter, the accrued benefit of each "Section 401(a)(17) employee", as that term is defined in this Paragraph, shall be the greater of the following:
(a) The employee's accrued benefit determined with respect to the benefit formula applicable for the plan year beginning on or after January 1, 1996, as applied to the employee's total years of service taken into account for purposes of benefit accruals.
(b) The sum of:
(i) The employee's accrued benefit as of the last day of the last plan year beginning before January 1, 1996, frozen in accordance with the provisions of 26 CFR 1.401(a)(4) through (13).
(ii) The employee's accrued benefit determined under the benefit formula applicable for the plan year beginning on or after January 1, 1996, as applied to the employee's years of service credited to the employee for plan years beginning on or after January 1, 1996, for purposes of benefit accruals.
(c)(i) For purposes of this Paragraph, a "Section 401(a)(17) employee" shall mean an employee whose current accrued benefit as of a date on or after the first day of the first plan year beginning on or after January 1, 1996, is based on compensation for a year beginning prior to the first day of the first plan year beginning on or after January 1, 1996, that exceeded one hundred fifty thousand dollars.
(ii) If an employee is not a Section 401(a)(17) employee, his accrued benefit in this system shall not be based upon compensation in excess of the annual limit provided for in Section 401(a)(17) of the United States Internal Revenue Code, as amended and revised.
Acts 1972, No. 135, §1, eff. July 26, 1972. Amended by Acts 1973, No. 4, §1; Acts 1983, No. 674, §3; Acts 1986, No. 608, §2, eff. July 1, 1986; Acts 1988, No. 664, §1, eff. July 15, 1988; Acts 1989, No. 220, §1; Redesignated from R.S. 42:575 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1995, No. 1112, §1; Acts 1999, No. 42, §1, eff. May 28, 1999; Acts 2001, No. 746, §1, eff. Dec. 31, 2001; Acts 2005, No. 75, §1, eff. July 1, 2005; Acts 2006, No. 835, §1, eff. July 1, 2006; Acts 2007, No. 353, §1, eff. June 30, 2007; Acts 2007, No. 414, §1, eff. June 30, 2007; Acts 2008, No. 312, §1, eff. June 17, 2008; Acts 2010, No. 992, §1, eff. Jan. 1, 2011; Acts 2010, No. 1004, §1, eff. July 1, 2010; Acts 2014, No. 852, §1, eff. June 30, 2014.
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.