2011 - Division of Administration - Louisiana

State of LouisianaActuarial Committee to be 5.7%. The number of employersparticipating in the ORP program is currently 126. Currentmembership in the program is 24,516. The ORP is not anobligation of the State or TRSLA, and is therefore notincluded in the CAFR.Act 301 of 2009 Regular Session allows a memberemployed at a public college or university, who voluntarilyor involuntarily participates in a furlough plan implementedas a result of budget reductions, the option to accrueservice credit for the periods of the furlough. The servicecredit shall be used for calculation of benefits and attainingretirement eligibility. The employee and the employer shallremit their respective contributions which would have beenremitted if not for the furlough. The service credit accrued,together with certain other credit purchases, shall notexceed 5 years. This provision shall not apply to furloughsimplemented as a result of a declaration of financialexigency or force majeure. The furlough days shall notexceed 30 days in any fiscal year. Members of the ORPare eligible for this provision but they do not earn servicecredit, rather the employee and the employer contributionsare remitted to a third-party provider who invests the ORPfunds on behalf of the participant.Members of TRSLA also have the option of participating ina three-year DROP program. Although Act 1055 of 2001changes the vesting requirements, members must stillhave 10 years of service credit to participate in DROP. Act368 of the 2011 Regular Session allows members hired onor after January 1, 2011, to participate in DROP with 5years of service at age 60. Current membership in theprogram is 3,032. The election is irrevocable onceparticipation begins.The Initial Lump-Sum Benefit (ILSB) became effectiveJanuary 1, 1996. Under this program, a retiring memberwho does not participate in DROP can select an ILSBalternative. This alternative provides the retiree with a onetimepayment of up to 36 months of a regular maximummonthly retirement benefit with a reduced regular monthlyretirement benefit for life.On January 1, 2000, TRSLA established the ExcessBenefit Plan. This plan is an unfunded, non-qualified planintended to be a qualified excess benefit arrangement. It isdesigned to pay excess benefits to those members whoretired on July 1, 1988, or later. The excess benefit is theportion of the TRSLA benefit that exceeds the maximumbenefit allowed under Section 415 of the Internal RevenueCode.Louisiana School Employees' Retirement System.Although the LSERS is considered part of the State ofLouisiana financial reporting entity, it is not a part of theState payroll. LSERS is the administrator of a cost-sharing,multiple-employer, defined-benefit pension plan. Thesystem was established and provided for by LRS 11:1001-1206. LRS 11:1116 mandates that specified employeesbecome members of the system as a condition ofemployment. Benefit provisions are authorized in LRS11:1141-1152.1.Membership is mandatory for all employees under age 60employed by a Louisiana parish or city school board, whowork more than 20 hours per week as a school bus driver,school janitor, school custodian, school maintenanceemployee, and any regular school employee who works ona school bus helping with the transportation of schoolchildren. Members are vested after 10 years of service.A member is eligible to retire after at least 10 years ofservice at age 60, 25 years at age 55, or after 30 years atany age. Act 368 of the 2011 Regular Session providesthat members hired on or after July 1, 2010, may retire at20 years of service subject to an actuarial reduction ofbenefits, and at 5 years of service at age 60. The systemdoes provide for deferred benefits for vested memberswho terminate before being eligible for retirement. Benefitsbecome payable once the member reaches retirementage. The maximum retirement benefit is an amount equalto 3.33% of the average compensation for the 3 highestconsecutive years of membership service, multiplied by thenumber of years of service limited to 100% of final averagecompensation, plus a supplementary allowance of $2 permonth for each year of service. For members who joinedthe system on or after July 1, 2006, the averagecompensation used to calculate benefits consist of the 5highest consecutive years’ average salary. Once anemployee has accumulated 5 years of service, disabilitybenefits apply based on the normal benefit formula withoutage restrictions. A member who joined the system on orafter July 1, 2006, must have at least 10 years of service toqualify for disability benefits. Other benefits have resultedfrom legislative changes and include cost-of-living benefits.Effective July 1, 1992, members of the LSERS may electto participate in the DROP and defer receipt of benefits.The election may be made one time only and is limited tothree years. Monthly retirement benefits are paid into theplan and credited to a subaccount for that individual.Interest credited and payments from the DROP accountare made in accordance with LRS 11:1152(F)(3). Upontermination of participation in both the plan andemployment, a participant may receive either a lump sumpayment from the account or systematic disbursements.All employers are eligible to participate in DROP. Thenumber of employers currently having plan membersparticipating in the DROP program is 69. As of June 30,2011, there were 619 members participating in theprogram.Effective January 1, 1996, the Legislature authorized thePlan to establish the Initial Benefit Retirement Plan (IBRP).IBRP is available to members who have not participated in- 78 -