Retirement Reference Manual (RRM) Training Presented by: Retirement Education Division

Retirement Reference Manual (RRM) Training

Presented by:Retirement Education Division

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Housekeeping

• Cell phones, beepers

• Coffee, snacks, restrooms

• Lunch

• Certificates

• Ask questions

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Introduction

• RRM designed to assist with LASERS procedures, rules and regulations• RRM is “living manual” evolving as issues and

laws change• Website: www.lasersonline.org

• RRM Power Point on website under Employers, Publications for Employers, Training

• Retirement Reference Manual under Employers, Publications for Employers, download by Chapter

• Locate forms on website under Employers, Forms for Employers

• Username: Agency Password: Lasers• Can complete forms online, print, sign, and mail to LASERS

• Do NOT photocopy forms

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Introduction

• An acknowledgement is sent for most processes:

• Receipt of retirement, DROP, or IBO applications• Receipt of request to transfer or upgrade service credit• Receipt of request to repay refund or purchase service

credit• Receipt of request to refund contributions• Receipt of payment for refund, transfer or purchase of

service• Receipt of designation of beneficiary form• Receipt of “Air Time” purchase• Processed direct rollover

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Procedures for Forms

• LASERS will accept forms downloaded from web

• LASERS will accept forms officially approved by LASERS

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• LASERS will not:

• Accept forms modified or changed

• Accept unsigned forms

• Accept faxed forms

• Accept copies of forms

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New Look for Forms

• To facilitate imaging and scanning processes

• Numbering system• 1st digit: Chapter number

• 2nd digit: Number of form in chapter

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Reminders

Retirement Reference Manual (RRM) is located on website

• LASERS will not send manuals to agencies

• Agencies must download manual from website

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Social Security Protection Act of 2004 Effective January 1, 2005

• Agencies must notify individuals employed about effects of Government Pension Offset (GPO) and Windfall Elimination Provision (WEP)

• Member is required to sign form certifying they have been told about GPO and WEP

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Social Security Protection Act of 2004Effective January 1, 2005

• Employee ID number is member social security number

• Employer ID number is agency number

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Contact LASERS

• Members and agencies in Baton Rouge area must dial 922-0600

• Members and agencies outside Baton Rouge have use of toll free number 1-800-256-3000

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LASERS Website www.lasersonline.org

Website Offers:• Employer Self Service• Publications for Employers & Members• Forms for Employers & Members• Seminar Registration• Frequently Asked Questions• Contact Information• Ask LASERS• Helpful Links

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Chapter 1

Enrollments & Membership

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Participation

• Enrollment in LASERS is mandatory for all state employees whose agency is a LASERS participant, except those excluded by law

• Proper enrollment of employees is important

• The agency responsible for future cost to correct enrollment errors

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Participation

• Employees not eligible for membership:• Employees who receive per diem allowance

instead of earned compensation

• Students, interns, and resident physicians at any state educational institution employed for temporary, part time or intermittent work

• Independent contractors

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Participation

• Employees not eligible for membership: (Cont’d)• Certain pool nurses

• Certain unclassified, temporary, seasonal employees of Dept. of Revenue & Taxation

• Part time (20 hours or less), seasonal, temporary employees unless employee has 10 years of service credit (R. S. 11:162)

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Definitions

• Definitions are located in Glossary (Chapter 12) of the Retirement Reference Manual

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Part-time Employee

LA R. S. 11:403 (20)

“Part-time employee” means any employee who is a part-time, seasonal, or temporary employee as defined in 26 CFR 31:3121(b)(7)-2, or in any successor regulations.

Note: For purposes of determining eligibility for membership in LASERS, part-time means working 20 hours or less per week. Agency representatives should monitor employees’ schedule to ensure that an employee is properly enrolled in LASERS if their regular scheduled hours increase above 20 hours per week.

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Part-time Employee

26 CFR 31:3121(b)(7)-2

(iii) Definitions of part-time, seasonal and temporary employee

(A) Definition of part-time employee. For purposes of this section, a part-time employee is any employee who normally works 20 hours or less per week. A teacher employed by a post-secondary vocational school, college, university or graduate school is not considered a part-time employee for purposes of this section if he or she normally has classroom hours of one-half or more of the number of classroom hours designated by the educational institution as constituting full time employment, provided that such designation is reasonable under all the facts and circumstances.

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Part-time Employee

Definition of part-time employee (Cont’d)

In addition, elected officials and election workers (otherwise described in section 3121(b)(7)(F)(iv) but paid in excess of $100 annually) are not considered part-time, seasonal or temporary employees for purposes of this section. The rules of this paragraph (d)(2)(iii) are illustrated by the following example:

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Part-time Employee

Example: A community college recognizes a teacher as a full-time employee if the teacher is assigned to work 15 classroom hours per week. A new teacher is assigned to work 8 classroom hours per week. Since the assigned classroom hours of the teacher are at least one-half of the school’s definition of a full-time teacher, the teacher is not considered a part-time employee.

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Seasonal Employee

26 CFR 31:3121(b)(7)-2

(iii) Definitions of part-time, seasonal and temporary employee

(B) Definition of seasonal employee. For purposes of this section, a seasonal employee is any employee who normally works on a full-time basis less than 5 months in a year. Thus, for example, individuals who are hired by a political subdivision during the tax return season in order to process incoming returns and work full-time over a 3-month period are seasonal employees.

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Temporary Employee

26 CFR 31:3121(b)(7)-2

(iii) Definitions of part-time, seasonal and temporary employee(C) Definition of temporary employee. For purposes of this section, a temporary employee is any employee performing services under a contractual arrangement with the employer of two (2) years or less duration. Possible contract extensions may be considered in determining the duration of a contractural arrangement, but only if, under the facts and circumstances, there is a significant likelihood that the employee’s contract will be extended.

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Temporary Employee

Definition of temporary employee (Cont’d)

Future contract extensions are considered significantly likely to occur for purposes of this rule if on average 80 percent of similarly situated employees (i.e., those in the same or similar job classification with expiring employment contracts) have had bona fide offers to renew their contracts in the immediately preceding two (2) academic or calendar years.

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Temporary Employee


In addition, future contract extensions are considered significantly likely to occur if the employee with respect to whom the determination is being made has a history of contract extensions with respect to his or her current position.

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Temporary Employee


An employee is not considered a temporary employee for purposes of this rule solely because he or she is included in a unit of employees covered by a collective bargaining agreement of two (2) years or less duration.

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Participation

• Employees that have optional membership:• Elected part time officials• Officials appointed by governor & subject to

approval by Senate• Employees age 60 or older at time of hire• Employees age 55 or older w/ 40 quarters Social

Security• Employees receiving benefit from another

retirement system at time of hire

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Classes of Members

• Regular

• Bridge Police w/Crescent City Connection

• Correctional, Probation or Parole Officers / Security Personnel with Dept. of Corrections

• Peace Officers

• Legislators, Clerk or Sergeant at Arms of House, President or Sergeant at Arms of Senate, Governor, Lt. Governor, State Treasurer

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Classes of Members

• Alcohol and Tobacco Agents

• Wildlife Agents

• Legislative Plan

• Judges and Court Officers

• Appellate Law Clerks

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Eligibility for Membership

• A person employed in LASERS covered position except those specifically excluded or those that have the option or election to join

• Any person employed in LASERS covered position contributing to another retirement system shall become a member unless election is made to remain in other system

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• Persons employed by agency covered by another LA retirement system but elect to remain in LASERS

• Membership is optional for elected officials, officials appointed by governor and must be approved by Senate

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• State, municipal or parochial employees transferred with approval of the Board

• Employees hired on a job appointment with an appointment date that extends over two years

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Job Appointment

LA R. S. 11:403 (15)

“Job appointment” means employment for a fixed period not to exceed two years

NOTE: The appointment duration should be determined at the start of the appointment

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Members of Other Retirement Systems

• If agency hires employee with 5 years service credit in TRSL, LSERS, LA State Police or Municipal Police, membership can be retained in respective retirement system

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Retaining Membership in Certain Cases

Membership can be retained if the employee meets the following criteria:

• Five years service credit with LASERS and• Eligible for TRSL, LSERS, State Police,

Municipal and• Notify LASERS in writing within 30 days of

hire

NOTE: This decision is irrevocable

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Eligibility for Other Classes of Employees

Bridge Police Employees:• Eligible for the provisions of La. R. S. 11:441(F)

Correctional Officers/Security Personnel:• Employees hired by LA Dept. of Public Safety &

Corrections shall be eligible to retire according to La. R. S. 11:441 (D-E) and 11:601-606

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Eligibility for Other Classesof Employees

Peace Officers:• All peace officers with Dept of Public Safety &

Corrections, office of state police other than state troopers shall be eligible to retire according to La. R. S. 11:444 (A)(2)

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Definition of Peace Officer in LA R. S. 40:2402(1)(a):

Any full time employee of the state, a municipality, a sheriff, or other public agency, whose permanent duties actually include the making of arrest, the performing of searches and seizures, or the execution of criminal warrants, and who is responsible for the prevention or detection of crime or for the enforcement of the penal, traffic, or highway laws of the state, but not including any elected or appointed head of a law enforcement department.

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Alcohol and Tobacco Agents:• Full-time law enforcement personnel,

supervisors, and administrators who are employed with the Dept. of Revenue, Office of Alcohol and Tobacco Control (ATC Agents) shall be governed by La. R. S. 11:444(A)(2).

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Wildlife Agents: • Wildlife Agents employed with

Enforcement Division of Louisiana Wildlife and Fisheries Commission shall be governed by La. R. S. 11:581-592.

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Legislators & certain legislative employees:• Employees who are/have been

members of Legislature, Clerk or Sergeant at Arms of House of Representatives, Secretary or Sergeant at Arms of Senate, President of the Senate, Governor, or Lt. Governor and State Treasurer are governed by La. R. S. 24:36.

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Judges & Court Officers:• Shall be governed by La. R. S. 11:551 –

11:571

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Appellate Law Clerks:• Law clerks of a Judge or Justice of an

Appellate Court shall be governed by La. R. S. 11:551 – 11:571

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Membership Enrollment Checklist

• Determine class of employee

• Determine membership eligibility

• Enroll employee through ISIS HR file, Non-ISIS contribution file, or Employer Self Serve on LASERS website

• All agencies must submit copies of employee social security card and birth certificate and Designation of Beneficiary, Form 1-6

Membership Enrollment

Enrollment• ISIS Paid Agencies:

• Agency submits enrollment information to LASERS through ISIS weekly (HR file)

• If Agency submits Membership Registration, Form 1-1 to LASERS, form will be returned to agency

• Form 1-1, Membership Registration is located on website for Employer Use Only and should not be submitted to LASERS.

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Enrollment• Non ISIS agencies who submit FTP files:

• Agency submits enrollment information to LASERS through FTP monthly (Contribution file)

• If agency submits Membership Registration, Form 1-1 to LASERS, form will be returned to agency.

• Form 1-1, Membership Registration is located on website for Employer Use Only and should not be submitted to LASERS

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Enrollment• Non ISIS, Non FTP agencies (Manual/Paper):

• Agency enters enrollment information to LASERS through Employer Self Serve, Member Enrollment

• If agency submits Membership Registration, Form 1-1 to LASERS, form will be returned to agency for processing through Employer Self Serve, Member Enrollment

• Form 1-1, Membership Registration is located on website for Employer Use Only and should not be submitted to LASERS

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Updating Active Member Records

Address Changes: • ISIS agencies:

• Agency submits change to LASERS through ISIS weekly

• If Change of Address, Form 1-2 is submitted to LASERS, form will be returned to member and instructed to see agency to change address

• Non ISIS agencies who submit FTP file:• Agency submits address changes to LASERS through

FTP monthly• If Change of Address, Form 1-2 is submitted to

LASERS, the form will be returned to member and instructed to see agency to change address

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Updating Active Member Records (Cont’d)

Address Changes: • Non ISIS, Non FTP agency (Manual/Paper):

• Agency submits change to LASERS through Employer Self Serve, Member Maintenance

• If Change of Address, Form 1-2 is submitted to LASERS, form will be returned to member and instructed to see agency to change address

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Designation of Beneficiary, Form 1-6• Section 2: Primary & Contingent beneficiaries

must separately total 100%• Must sign in presence of notary public if

member signs with an “X”• Section 4: Requires two witnesses

Change of Name, Form 1-7• Signed Social Security card required

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• Change of Name, Form 1-7

• Submit through Employer Self Serve on website, Member Maintenance

• Signed Social Security card required

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Updating Retiree or Terminated Member Records

Address Changes:• All agencies who report to LASERS will handle

change of address for up to six months • After six months, retirees can submit Change of

Address, Form 1-2 or make change through Retiree Self Serve on LASERS website

• After six months, terminated (out of state service) members can submit Change of Address, Form 1-2 to LASERS

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• Agency forms are located on LASERS website under Agency Information and Agency Forms. • User name and password to access the forms are

agency and lasers

• Members can download & submit forms that do not require agency certification• Designation of Beneficiary, Form 1-6

• Change of Name, Form 1-7

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Service Credit

Total of all earned, transferred, and purchased service credit used to determine eligibility for retirement and calculate member benefits

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Calculation of Service Credit before 01/01/1973

15 - 89 days .25 year 90 - 179 days .50 year 180 - 269 days .75 year 270 or more days 1.00 year

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Part-time service before01/01/1973

Actual fiscal year earnings = ServiceFull time fiscal years earnings Credit

Less than 25% No Credit25% but less than 50% .25 year50% but less than 75% .50 year75% but less than 100% .75 year

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Calculation of ServiceCredit after 01/01/1973

Actual annual earnings =Service

Full time base pay Credit

LASERS rounds service credit to highest tenth

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Part-time service after01/01/1973

Full time and part time service is calculated using the same formula

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LSU Service

LSU Unfunded - Prior to 07/01/1971

LSU Funded- 07/01/1971 to 12/31/1978

Regular - 01/01/1979 to present

LSU must provide worksheet to determine service credit for unfunded and funded years

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Worker’s Compensation

• Effective 09/01/1989, a member not receiving “normal” service credit will be given service credit for eligibility purposes ONLY

• Service credit not used to calculate retirement benefit

• Agency must notify LASERS in writing if member on leave without pay & receiving worker’s compensation

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Family Medical Leave Act

• Provides health coverage during leave

• If on unpaid FMLA, no service credit accrued

• If on paid FMLA, accrue service credit

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Employer Maintenance

• Located on website under Employers, Employer Self-Service, Employer Maintenance

• Use to change and/or add someone to list of agency personnel authorized to sign LASERS forms

• The authorized list should be reviewed and updated periodically

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Questions?

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Chapter 2

Refunds & Purchases

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Refund of AccumulatedContributions

• Must terminate from state service for 30 days• Processing may take approximately 90 days from

date all documents received by LASERS• Refund checks issued several times a month• Checks issued to member ONLY• Contributions are un-assignable by law• Member loses service credit, interest not paid,

only employee contributions refunded• If member later returns to state service, return

under provisions of Act 75• Federal tax due, no state tax due

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• Submit Refund of Accumulated Contributions, Form 2-1• Nine page form, includes tax implications

• Include copy of signed social security card or letter from Social Security Administration

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• Member must choose either• Option 1: Member receives payment, taxable

event

• Option 2: Rollover to qualified plan • Authorization for Direct Rollover, Form 2-1A must

be completed• LASERS will only accept this form for rollover to

financial institution, will not accept a written request from financial institution

• Member must complete Section 2• Financial institution must complete Section 3

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• Submit Refund of Accumulated Contributions, Form No. 2-1 (Cont’d)• Must be submitted by HR of last employer

• Do not have member contact LASERS for form

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Emergency Refunds

• Submit Emergency Refund Request, Form 2-2• One emergency refund allowed during lifetime,

effective 10-08-2004• Include copies of social security card or letter

from Social Security Administration • Reasons for emergency refund (documents

required)• Foreclosure or eviction• Medical bills $2,000 or more• Repossession of vehicle• Death of member

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Types of Purchases

• Repay Refunds

• Actuarial Purchases• Internal Revenue Code prohibits purchasing more

than five years of time not actually worked

• Reciprocals

• Actuarial Transfers

NOTE: LASERS accepts rollovers from qualified plans to pay for purchases

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Reminder

• All purchases must be made prior to application for retirement (Regular, IBO, or DROP)

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Purchasing Service Credit

• Repayment of Refunds• Must have 18 months of service credit

• Must pay amount refunded plus interest

• No fee

• Submit Application for Repayment of Refunded Service, Form 2-11

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Actuarial Purchases

• Full time state service where credit has not been received (R. S. 11:422)• Allows member to purchase years paid into

social security or deferred compensation

• Previous employer must be LASERS agency

• Fee $150

• Submit Certification for Purchase of In-State Service, Form 2-5

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Actuarial Purchases

• State service excluded due to administrative error (R. S. 11:423)• Employee denied LASERS membership

• No fee if less than 12 months

• Fee $150 if over 12 months

• Submit Certification for Purchase of In-State Service, Form 2-5

Actuarial Purchases

• Leave without pay (R. S. 11:163)• Can purchase leave without pay once member

returns to work for the state as long as they did not refund contributions.

• Submit Application for Purchase of Leave without Pay, Form 2-10

• Fee $150

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Actuarial Purchases

• Military Relief Act (USERRA) (38 U.S.C.A. § 4301 et seq.)• Federal law that applies to purchases of service credit

for active military time served after August 1, 1990

• While on military leave, member elects to remit contributions to LASERS. If this is not exercised, member can elect to purchase leave after re-employed for 90 days after the leave has expired.

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Actuarial Purchases

• Military Relief Act (USERRA) (38 U.S.C.A. § 4301 et seq.) (Cont’d)

• The purchase must be made before the deadline of either the lesser of:

• three times the years or service served, or

• five years after re-employment in a LASERS eligible position

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Actuarial Purchases

• Military Relief Act (USERRA) (38 U.S.C.A. § 4301 et seq.) (Cont’d)• Under provision of USERRA, a LASERS member who leaves

employment for active duty in uniformed services shall be eligible to purchase such service in the retirement plan, provided all the following criteria are met:

• Member returned to LASERS-covered employment within 90 days after discharge from military duties. NOTE: Any such date of re-employment must occur on or after August 1, 1990

• Member did not change LASERS employers immediately before and after military service

• Member received an honorable discharge for military service.

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Actuarial Purchases

• Military Relief Act (USERRA) (38 U.S.C.A. § 4301 et seq.) (Cont’d)• Member must pay employee contributions, and

employer must pay the employer contributions prior to the purchase deadline. The employer contributions must be paid within 30 days after the members payment is received.

• Member is eligible to purchase up to five years of service under USERRA. Once the deadline expires, member must apply to purchase this time under the regular military provision which requires a $150 non-refundable actuarial calculation fee.

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Actuarial Purchases

• Military Relief Act (USERRA)(38 U.S.C.A. § 4301 et seq.) (Cont’d)• Submit Application for Purchase of Military Service,

Form 2-6

• DD-214, copy of release or discharge from active duty

• Certification of salary information from agency, including monthly breakdown of the base, earnings, employee contributions, and employer contributions that would have been paid to LASERS if not on military leave

• No Fee

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Actuarial Purchases

• Military Service Not under USERRA (R.S. 11:153)• Can purchase up to four years for active military service

• Credit for military service cannot be used to meet eligibility requirements for disability, survivor benefits, and shall only be used for purposes of acquiring eligibility for normal retirement benefits

• In addition, such military service credit shall not be used to meet the minimum eligibility requirement of any retirement of 20 years or less

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Actuarial Purchases

• Military Service Not under USERRA (R.S. 11:153)• Submit Application for Purchase of Military Service,

Form 2-6

• Submit DD2-14 - Discharge papers from Military

• Fee $150

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Actuarial Purchases

• “Air Time” – allows purchase of five years of service credit [R. S. 11:429 (B)]• Must have 5 years service credit to apply• Fee $150• Submit Application for Purchase of Service

Credit Under 11:429 (B), Form 2-7• Can purchase in one year increments ONLY• Can NOT use to meet retirement eligibility• Will use for computation purposes ONLY

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Actuarial Purchases

• Purchases repealed by “Air Bill”

• Educational leave (R. S. 11:425)

• Federal service (R. S. 11:428)

• Out of state service (R. S. 11:429)

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Actuarial Purchases

• Voluntary or involuntary furlough (Act 301, effective July 1, 2009)• Maximum of 30 days per fiscal year• For members employed at public colleges /

universities, or governing boards / management board of public colleges / universities

• Employee and employer contributions must be paid

• Can be used for eligibility and calculation of benefits

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Actuarial Purchases

• Purchases of Service Credit for Judges & Legislators (R. S. 11:143)• Must contact LASERS

• Fee $150

• Submit Application for Purchases of Certain Service by Legislators, Form 2-8

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Reciprocals (R. S. 11:142)

Recognition of service credit in one Louisiana retirement system by another Louisiana retirement system

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Reciprocals

• No cost to member• Recognize service credit in other system

for eligibility purposes ONLY• No transfer of funds• Member receives benefit check from each

system• Six months service credit required to

apply• Submit Application for Reciprocal

Recognition of Service, Form 2-3

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Actuarial Transfers (R. S. 11:143)

The actuarial transfer of service credit from one Louisiana retirement system to another Louisiana retirement system. All employee, employer contributions and interest are transferred.

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Actuarial Transfers

• Cost based on information such as age, life expectancy, current salary, accrual rate, funds to be transferred, and other factors

• Six months required in current system

• Member receives one check

• Fee $150

• Submit Application for Transfer of Creditable Service, Form 2-4

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Actuarial Transfers

Actuarial Transfer Example: Member has 5 years with TRSL. EE’s and ER’s with TRSL are $26,250. Member has 10 years with LASERS.

Actuarial cost to purchase= $45,000 (5 years)Transfer EE’s, ER’s & Interest = -26,250Deficiency = $18,750

Member can either accept pro-rata credit or pay deficiency.

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Request for Research ofRefundable Contributions

• For members who left state service without retiring or withdrawing contributions• Can submit Request for Research of Refundable

Contributions, Form 2-16

• Allow 60 days for microfilm search

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Questions?

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Chapter 3

Survivor Benefits

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Survivor Benefits

Benefits payable to survivors of a member who dies while in active service, except for certain judicial employees• Minor child• Surviving spouse with minor children• Surviving spouse without minor children• Named beneficiaries• Estate

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Survivor Benefits

• Complete Form 3-1, Application for Survivor Benefits• Does not matter if survivor is friend or family

member

• Form 3-1 must be submitted regardless of amount of service credit member had at time of death

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Survivor Benefits

• Total survivor benefits cannot exceed 75% of final average compensation

• Sequence of events if active member dies, file examined for:• Required number of years of service credit• A minor child eligible for benefit• A surviving spouse• Named beneficiaries

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Survivor Benefits

• Definition of Minor Child

• Unmarried child under age 18

• Child physically/mentally handicapped• Need documentation from physician

• Unmarried full time student less than age 23• Must attend 80% of classes• Attendance verified twice a semester

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Survivor Benefits

• Surviving Minor Child• Deceased member must have 5 years service credit

• Active contributing member at death, at least 2 years earned immediately prior to death.

• If member has 20 years service credit, does not matter if active, benefits payable

• If member has less than 5 years service credit, contributions are paid to named beneficiaries

• Minor Child/Children receive 75% of Final Average Compensation (FAC)

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Survivor Benefits

• Surviving spouse with minor child/children• Deceased must have 10 years service credit.

• If deceased member has 20 years service credit, does not matter if active, benefits are payable.

• If deceased member has less than five years, contributions are paid to named beneficiaries.

• 75% of FAC• One third to spouse

• Two thirds to minor child/children

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Survivor Benefits

• Surviving Spouse without minor child/children• Deceased must have 10 years service credit

• If deceased has 20 years service credit, does not matter if active, benefits are payable

• If deceased member has less than 10 years, contributions are paid to name beneficiaries

• Married at least 1 year prior to death

• Greater of 50% of FAC or $200/month

Survivor Benefits

• If there is no minor child or spouse, the employee contributions are paid to named beneficiaries in a lump sum

• If there is no minor child, spouse, or named beneficiary, employee contributions are paid to estate of deceased member in lump sum

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Survivor BenefitsJudges & Court Officers

• Benefits for spouse, minor children, handicapped or mentally retarded children of deceased person enumerated in R. S. 11:553 who becomes a member of LASERS shall be paid in accordance with provisions of law applicable to survivors of members of the system.

• Benefits paid to surviving spouse shall not be less than 1/3 third of salary or compensation which was being paid to the deceased person at time to of death or retirement, or an amount equal to one half of retirement pay which such person was entitled to receive or was receiving prior to his death (R.S. 11:562).

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Survivor BenefitsWildlife Agents

Death from injuries in line of duty• Surviving Spouse w/25 years, 75% FAC• Surviving Spouse w/less than 25 years, 60% FAC• Minor Child/children under age 18 (if no surviving

spouse)• 4 or more, 60% FAC• 3 children, 50% FAC• 2 children, 40% FAC• 1 child, 30% FAC

• Parents receiving support from deceased, no spouse or children, 25% of FAC

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Survivor BenefitsWildlife Agents

Death not in performance of duties• Survivors entitled to same benefits

deceased would receive if retired on date of death

• Death after retirement, survivors receive 75% of monthly benefit

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Survivor BenefitsCorrectional Officers

Died other than in line of duty• Deceased must have 10 years (2 years service

credit immediately prior to death) or had 20 years

• Primary & Secondary Component:• No spouse but minor/disabled child, benefits

greater of 75% FAC or $300

• Spouse, but no minor child, benefits greater of 50% or $200

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Died other than in the line of duty• Primary & Secondary Component (Cont’d)

• Spouse with custody of minor/disabled child, benefits for spouse are greater of 25% of FAC or $100. Benefits for minor child/children are greater of 50% of FAC or $300

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Killed in the line of duty while serving• Primary Component

• Less than 5 years service credit:• Minor child, 60% of FAC

• More than 5 years service credit:• Minor child, 75% of FAC

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Killed in the line of duty while serving• Primary Component with less than 25

years:• Spouse only, 60% of FAC

• Spouse with minor child/children:• One third FAC to Spouse• Two thirds FAC minor child/children

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Killed in the line of duty while serving• Primary Component with 25 years service

credit or more:• Spouse only, 75% of FAC

• Spouse with minor child/children• One third FAC to spouse

• Two thirds FAC to minor child/children

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Killed in the line of duty while serving• Secondary Component with less than 25

years of service• Minor child, 60% of FAC

• Spouse only, 60% of FAC

• Spouse with minor child/children• 1/3 spouse

• 2/3 to child/children

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Surviving BenefitsCorrectional Officers

Killed in the line of duty while serving• Secondary Component with 25 years or

more• Minor child/children, 75% of FAC

• Spouse only, 75% of FAC

• Spouse with minor child/children• 1/3 to spouse• 2/3 to child/children

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Survivor Benefits

• Submit Application for Survivor Benefits, Form 3-1• Must be submitted for all members who die

while in active service

• Agency must certify

• Application must be complete

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Survivor Benefits

• Required Documentation• Copies Accepted

• Death certificate of member/spouse

• Signed social security cards for member & beneficiaries

• Marriage license to prove length of marriage

• Birth certificate for member & beneficiaries

• Certified true copy custody or judgment / divorce decree

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Survivor Benefits

• Required Documentation (Cont’d)• Certification of student status (2 times per

semester)

• Medical documentation of disabled child• Affidavit of Natural Tutorship• Adequate proof of handicap/mental disability

• Affidavit of natural tutorship

• Proof of paternity, if applicable

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Questions?

118

Chapter 4

Disability

119

Disability

• 10 years service credit (exceptions under Corrections, WLF & Judicial plans)

• State Medical Disability Board (SMDB) physician certifies condition is total and likely permanent of current job duties

• Disabling condition must have occurred while active unless member has 20 years service credit

• Not eligible for:• Option 4A• DROP/IBO• Lump sum leave payment

120

Disability

• Benefit calculation is same as regular retirement

• LASERS will recertify every year first 5 years, then every 3 years until age 60

• Remaining leave converted to service credit only

• Agency pays 300 hours annual leave at hourly rate of pay

121

Disability-Judges & Court Officers

• If disabled while performing job duties• 50% of FAC immediately preceding disabling

condition, or

• Amount equal to Maximum retirement allowance per R. S. 11:444 plus additional 1% for years of service credit as judge or court officer, whichever is greater (R. S. 11:561)

122

Disability-Wildlife Agents

• Disability not incurred in the line of duty• Must have 10 years service credit at any age

• 75% of regular retirement benefit agent would receive if eligible for regular wildlife retirement

• Disability incurred in line of duty• Wildlife agent must be totally disabled,

resulting from injury received in line of duty

• 60% of FAC

123

Disability-Corrections

If disability sustained in performance of official duties of hazardous nature:

• Primary Component• Receive 60% FAC, regardless of years of service

• Secondary Component• Receive 40% FAC with less than 10 years of service, or• Benefits as provided under regular formula, if more than

10 years of service.

• Unused Leave converted to service credit

124

Disability

• Active member must submit:• Disability Retirement Application, Form 4-1*

• Disability Report Form 4-1*• Completed by supervisor

• Attending Physician Statement Form 4-1*• Completed by physician

*NOTE: This form is four pages! Disability section will only accept revised 03/04 “Bar Coded” Application!

125

Disability

• After SMDB approval of disability, submit• Selection of Disability Retirement Plan, Form 4-

2

• Spousal Consent, Form 4-4

• W-4P

• Authorization for Direct Deposit, Form 4-5

Disability

• Approval for disability expires after six months if member does not retire on disability

• After six months, member must reapply for disability

127

Disability

• Annually, disability retiree must submit• Disability Retiree Earned Income Statement,

Form 4-3 by May 1• Earnings cannot exceed FAC

• Must be signed in presence of Notary

• Attending Physicians Statement, Form 4-1 first five years, then every third year

• LASERS will send these forms to the members each year

128

Disability

• R. S. 11:225 (Effective 06/15/2004)• Disability retiree can return to active service for

six month trial period w/ less than 25 years of service credit

• Disability benefit suspended

• If employment ends before 6 months, benefit resumes

• If employed more than 6 months, must reapply

129

Questions?

130

Chapter 5

Retirement Eligibility

131

Regular Retirement – Hired Prior to July 1, 2006

Eligibility Requirements• 30 years, any age• 25 years, age 55• 10 years, age 60• 20 years, any age, actuarially reduced • Accrual rate is 2.5%• Contribution rate is 7.5%• 36 month FAC used to calculate benefits

132

Regular Retirement – Hired on or after July 1, 2006 (Act 75)

Eligibility Requirements• 10 years at age 60• Accrual rate is 2.5%• Contribution rate is 8.0%• 60 month FAC used to calculate benefits• Can participate in DROP or choose IBO• Salaries used for FAC cannot exceed 15% per

year• Disability retirees accrual rate 2.5% (Act 262,

effective 06/17/2008)

133

Early Retirement

• If member terminated for cause, agency must give member opportunity to send application for early retirement if member meets requirements by termination date

134

Bridge Police Employees with Crescent City Connection

Eligibility Requirements (Prior to 06/30/2006)• 10 years, age 60• 25 years, age 55• 30 years, any age• 25 years at any age, last 10 years must be served

as Bridge Police immediately prior to application for retirement

• 20 years, any age, actuarially reduced benefit• Accrual rate is 2.5%• Contribution rate is 8.5%• 36 month FAC used to calculate benefits

Bridge Police Employees with Crescent City Connection

Eligibility Requirements (After 07/01/2006)• 10 years, age 60• 25 years at any age, last 10 years must be served

as Bridge Police immediately prior to application for retirement

• Accrual rate is 2.5%• Contribution rate is 8.5%• 60 month FAC used to calculate benefits

135

136

Corrections

Eligibility Requirements• Primary Plan (hired on or before 08/15/1986)

• 10 years, age 60• 20 years at any age, actuarially reduced benefit

• Last 10 years must be served as a correctional officer• Primary Plan (hired after 8/15/1986)

• 10 years, age 60• 20 years at age 50 (regular time = 2/3 eligibility)• 25 years at any age (effective 7/01/1999)

• Last 10 years must be served as a correctional officer• 20 years at any age, actuarially reduced benefit

• Accrual rate is 2.5%• Contribution rate is 9.0%• 36 month FAC used to calculate benefits

137

Corrections

Eligibility Requirements

• Secondary Plan• 25 years at any age• 10 years, age 60

• Last day worked must be as a Correctional Officer

• Accrual rate is 2.5% for years in Primary Plan and 3.33% for years in Secondary Plan

• Contribution rate is 9.0%• 36 month FAC used to calculate benefits

138

Corrections

• Members hired prior to or on 12/31/2001:• Have choice to remain in Primary Component

or enter Secondary Component

• Choice was irrevocable

• Members hired 01/01/2002 or later must enter Secondary Component

Peace Officers

Eligibility Requirements• 30 years, any age• 25 years, age 55• 10 years, age 60• 20 years, any age, actuarially reduced• Accrual rate:

• Hired on or before 06/30/2006: 3.33%(Even for years not worked as Peace Officer)

• Hired after 07/01/2006: 3.33%(For all years worked as Peace Officer)

• Contribution rate is 9%• 36 month FAC used to calculate benefits

139

Alcohol Tobacco Control Agents

Eligibility Requirements• 25 years at any age

• 10 years at age 60

• 20 years, any age, actuarially reduced benefit

140

Alcohol Tobacco Control Agents

Eligibility Requirements• Accrual rate:

• Hired on or before 06/30/2007: 3.33% even for years not worked as ATC agent

• Hired on or after 07/01/2007: 2.5% for years prior to 07/01/2007 and 3.33% for years worked as ATC agent after 07/01/2007

• Prior accrual rate dependent on meeting definition under R.S. 40:2402(1)(a) and certified statement from agency


141

142

Wildlife Agents with Enforcement Division of Dept. of Wildlife and Fisheries

Eligibility Requirements• Must have at least 10 years served as a wildlife

agent immediately prior to application for retirement

• If hired before 06/30/2003• 20 years at any age• 10 years at age 55

• If hired on or after 07/01/2003• 25 years at any age• 10 years at age 60

143

Wildlife Agents with Enforcement Division of Dept. of Wildlife and Fisheries


• Must have at least 10 years served as a wildlife agent immediately prior to application for retirement

• Accrual rate:• For all years prior to July 1, 2003 3.00%• For all years after July 1, 2003 3.33%

• Contribution rate is 9%

• 36 month FAC used to calculate benefits

Legislative Plan

Eligibility Requirements• 12 years at age 55• 16 years at any age• 20 years at age 50, at least 12 years as member

of this class• Accrual rate is 2.5% plus 1% for years served in

Legislature, Clerk or Sergeant-at-Arms of House, Secretary or Sergeant-at-Arms of Senate, Governor or Lt. Governor


144

145

Judges and Court Officers


• 10 years as Judge or Court Officer, age 65• 12 years as Judge or Court Officer, age 55 • 18 years as Judge or Court Officer at any age• 20 years, age 50, at least 12 years as Judge or Court Officer• Any number of years as Judge or Court Officer, age 70 • 20 years, any age, actuarially reduced benefit

Judges or Court Officers


• Also have the choice to retire Regular Retirement• Accrual rate is 2.5% plus 1% for years of service

as Judge or Court Officer• Contribution rate is 11.5%• 36 month FAC used to calculate benefit

146

Appellate Law Clerks

• Eligibility Requirements• 10 years as Law Clerk, age 65• 12 years as Law Clerk, age 55• 18 years as Law Clerk, at any age• 20 years, age 50, at least 12 years as Law

Clerk• Any number of years as Law Clerk, age 70• 20 years any age, actuarially reduced benefit

147

Appellate Law Clerks

• Accrual Rate is 2.5%• Contribution rate is

• 7.5%, if hired on or before June 30, 2006• 8%, if hired on or after July 1, 2006

• 36 month FAC used to calculate benefit if hired on or before June 30, 2006

• 60 month FAC used to calculate benefit if hired on or after July 1, 2006

148

149

Retirement Eligibility

This chart helps determine eligibility dates:

January 1 .10 July 15 .60February 15 .20 August 15 .70April 1 .30 September 30 .80May 1 .40 October 30 .90June 1 .50 December 1 1.00

150

Retirement Formula

Years of Service Credit X

Accrual Rate X

Final Average Compensation =

Maximum Benefit*

*Add $300 annually to Maximum Benefit if hired before 07/01/1986.

151

Final Average Compensation (FAC) if hired before July 1, 2006

Average earned compensation received during highest 36 months of successive employment or the highest joined months of employment if service was interrupted

152

Final Average Compensation (FAC) if hired on or after July 1, 2006

Average earned compensation received during highest 60 months of successive employment or the highest joined months of employment if service was interrupted

153

Example - Regular

Member age 55 w/ 25 years service credit, $32,000 FAC, hired before 07/01/1986

25 X 2.5% X $32,000 + 300 = $20,300 annually or $1,691.67 per month

154

Questions?

155

Chapter 6

Regular Retirement &Initial Benefit Option

Applications

156

Retirement Application

• Submit Application for Retirement, Form 6-1• Member completes Sections 1 – 6• Agency certifies application Section 7

• Required Documentation• Copies accepted

• Signed Social Security card for member & beneficiaries

• Birth certificates for member & beneficiaries

• Marriage certificate if Option 4-A chosen

• Certified true copy of divorce decree, if applicable

157

Retirement Application

• Authorization for Direct Rollover, Form 2-1A must be completed if member selects to rollover their leave payment

• Member must complete Section 2

• Financial institution must complete Section 3

• LASERS will only accept this form for rollover to financial institution, will not accept a written request from financial institution

158

Reminders

• Credit Union Deductions contact list

• Other Insurance Deductions contact list

• Date of termination: Actual date member terminated from agency

159

Reminders: Termination Date on Retirement Application

• Termination date is last day a member was employed with an agency

• The retirement date is the day after the termination date if application received prior to termination date

• The termination date is not the day after a member ceases work

• If termination date is reported inaccurately, it can cause the member to be ineligible for retirement, retire out of state service and lose accrued leave time and also reduce their benefit

160

Initial Benefit Option(IBO)

• One time lump sum amount at the time of retirement

• Available amount cannot exceed 36 months of the maximum benefit

• Actuarially reduced lifetime benefit• Eliminate Option 1 as choice• Not available if early retirement chosen• Cannot choose DROP

161

Initial Benefit Option (IBO)

Reasons member may choose IBO:• Spend lump sum available

• Save lump sum in interest bearing account for future use

• Receive lump sum to reduce debt

• Expect substantial pay increase

162

Initial Benefit Option (IBO)Example

If Maximum benefit is $1,562.50 per month, retiree may receive up to $56,250 in a lump sum.

($1,562.50 X 36 months = $56,250)

163

Initial Benefit Option (IBO)Example

Retiree, 55 years old; beneficiary 58 years old

Regular benefit Reduced benefit

Maximum $1,562.50 Maximum $1,119.75Option 2 $1,444.84 Option 2 $1035.43Option 3 $1,501.37 Option 3 $1075.94

Reduction in benefits depends on age of retiree. This benefit reduced $8.00 for every $1,000 member receives in a lump sum

164


Member must submit:• Application for Retirement w/Initial Benefit

Option (IBO), Form 6-1A• Member must complete Sections 1-9

• Agency must complete Section 1

• Spousal Consent Form, Form 04-04• Member must complete Section 1 and 2• Spouse should initial all situations which apply in

Section 3: Selections

165


• Authorization for Direct Rollover, Form 2-1A must be completed if member selects to rollover their IBO lump sum or leave payment




166


Members eligible for IBO January 1, 2004 or later:

IBO funds will be transferred to Self Directed Plan (SDP) with Great West Retirement Services

167

Questions?

168

Chapter 7

Conversion of Unused Leave

169


• Cannot use sick or annual leave to meet eligibility for retirement

• Agency pay up to 300 hours at hourly rate of pay

• Two choices• Convert to service credit, or • Lump sum payment (except disability)

170

Unused Leave Credit

Formula to convert unused annual and sick leave:

Add hours annual & sick leave, divide by 8 hours, then divide by 260 days

Example:1000 hours A/L; 800 hours S/L = 1800 hours 1800 hours divided by 8 = 225 days225 days divided by 260 = .86 years*

*Note: .86 will round to .90 years service credit

171

Unused Leave CreditConversion Table

Days

001-026027-052053-078079-104105-130131-156157-182183-208209-234

235-260

Years

0.100.200.300.400.500.600.700.800.901.00

172

Unused Leave CreditConversion Example

Regular member age 57 with 25 years of service credit, $2,500 FAC, 225 days (90%) leave balance

Leave balance X accrual rate X FAC = Benefit

.90 X 2.5% X $2,500= $56.25 per month or $675.00 annually

173

Lump Sum Payment for Unused Leave

• Actuarial value of leave credit, not hourly rate of pay

• Lump sum amount calculated at an actuarial rate based on age at retirement and life expectancy

• Use value of leave when converted to retirement credit, then multiply by appropriate reserve factor based on age at retirement

174

Lump Sum Payment forUnused Leave Example

Member Age 57, Reserve factor 10.08535*

Annual benefit X Reserve Factor = Lump Sum Payment

$675.00 X 10.08535 = $6,807.61

*Reserve factor provided by actuary based on age of retiree.

Tax implications on leave lump sum:20% mandatory income tax withholding10% tax penalty applies if lump sum received/not rolled over before age 59 1/2

175


• R. S. 11:424E, (1999 Legislative Session) provides if member who has leave that will cause retirement benefit to exceed 100% FAC, will be able to receive an actuarial lump sum payment, without regard to 100% cap

176


• Agency submits Certification of Unused Annual and Sick Leave, Form 7-1

• Be sure to deduct 300 hours annual leave before entering number of hours in Section 3 of Form 7-1

177

Questions?

178

Chapter 8

Retirement Options

179

Retirement Options

Maximum Plan: Retiree receives basic benefitBeneficiary receives balance of contributions in lump sumMore than one beneficiary can

be named and changed at any timeOption 1: Retiree receives reduced benefit

Beneficiary receives balance ofcontributions in lump sumMore than one beneficiary can

be named and changed at any time

180

Retirement Options

The following options allow only one beneficiary and are based on age of retiree and age of beneficiary.

Option 2A: Retiree receives reduced benefitBeneficiary receives same amount as retiree

Option 2B: Retiree receives reduced benefitBeneficiary receives same amount as retiree. At beneficiary’s death, benefit paid to guardian of mentally handicapped child / children

181

Retirement Option 2B

• R. S. 11:446 (2) (b)• Current law states if beneficiary dies,

benefit payable to guardian of mentally handicapped child/children

• Current law does not include physically handicapped child/children

• Member must make this election to receive this reduced benefit

• Calculation is based on beneficiary age, mentally handicapped child/children’s age and severity of handicap

182

Retirement Option 2B

• R. S. 11:446 (2) (b)• LASERS requires verification of handicap

when application submitted

• If benefit left to spouse is less than 50%, spousal consent form required

• Actuary handles calculation

• No fee for calculation

183

Retirement Options

The following options allow only one beneficiary and are based on age of retiree and age of beneficiary.

Option 3: Retiree receives reduced benefitBeneficiary receives 50% of retiree

benefitOption 4A*:Retiree receives 90% of maximum

benefitSpouse receives 55% of maximum benefit

*NOTE: Must name spouse as beneficiary and have been married at least two years before retirement

184

Retirement Options

The following options allow only one beneficiary and are based on age of retiree and age of beneficiary

Option 4B: Retiree receives reduced benefitBeneficiary receives 55% of retiree

benefit

185

Change of OptionAfter Retirement

There are only two ways to change option chosen:• Death of Beneficiary – can change to Maximum

• Notify LASERS of beneficiary’s death & request increased payments

• Submit copy of beneficiary’s death certificate• Change of option is retroactive to first of the month

following date of death (Act 262, 2008)• Divorce – can change to actuarially reduced

Maximum• Send LASERS written request to change to Maximum• Submit court ordered divorce property settlement stating

former spouse is permanently renouncing all rights to benefits available under original option chosen

• $150 fee• CANNOT NAME ANOTHER BENEFICIARY!

186

Retirement Options

REMINDERS• Louisiana is community property state

• An ex-spouse may be entitled to portion of retirement benefit

• LASERS requires a certified true copy of Court Order of Divorce

• Spousal consent may be required• Should member choose anyone other than

spouse to receive benefit• If member chooses Maximum or Option 1

187

Retirement Options

R. S. 11:446 (F) (Effective 07/01/2004)

• If no spousal consent received at retirement, LASERS will establish benefit as if member selected Option 3

• Spouse will receive 50% under Option 3

188

Retirement Options

• Judges and Court Officers• Can only choose Maximum• Can only name spouse as beneficiary

• Spouse receives benefit not less than 1/3 of FAC which was paid to member at death, or

• Amount equal to ½ of retirement benefit member was entitled to receive or was receiving prior to death

• Must be married at least 1 year for spouse to receive benefit unless judge had 17 years immediately prior to death

189

Retirement Options

• Wildlife Agents, Judges & Correctional Officers (Chapters 16 – 18)

• Change in Option• Death of beneficiary• Divorce of beneficiary

• Spousal approval

• Division of benefit with former spouse

190

Questions?

191

Chapter 9

Deferred Retirement Option Plan

(DROP)

192

DROP

Old DROP• Must be eligible for retirement on or

before 01/01/1996

• Meet regular retirement eligibility

• No window

193

DROP

New DROP• Defer retirement benefit while working

• One time only participation for maximum of 36 months

• Retirement benefit deposited in DROP account monthly

• No interest is paid until after participation ends

• DROP may NOT be beneficial to all members

194

DROP

• Participation window closes 3 years plus 60 days from date window opens (“deadline” for exiting DROP)

• Must enter DROP within 60 day “grace period” to participate 36 months

• Must purchase years of service credit before applying for DROP

• Retirement benefit calculated, retirement option chosen (permanent choice)

• Retirement benefit amount locked in (permanently) for years prior to DROP

DROP

Example of DROP Window including 60 day grace period:

Entry Date Exit Date10/01/2009 09/30/2012+ 60 calendar days

11/30/2009 11/29/2012

02/01/2010 11/29/2012 (2 months lost)

06/01/2010 11/29/2012 (6 months lost)

11/01/2009 10/31/2012 (36 mos./entered within 60 day grace period) 195

196

DROP

• Must specify length of participation when completing application

• Cannot extend DROP participation

• Complete Application for Deferred Retirement Option Plan, Form 9-1 if eligible for DROP after 01/01/2004

• Complete Application for Deferred Retirement Option Plan, Form 9-1A if eligible for DROP on or before 01/01/2004

• Agency must certify these forms

197

DROP

• Retirement benefit deposited each month into DROP subaccount

• No interest paid during DROP participation

• Beneficiary for DROP subaccount can be different than beneficiary named for retirement option and can be changed at any time.

198

DROP

• Three ways to exit DROP early:• Voluntary termination of employment• Involuntary termination of employment• Death

• During DROP• No employee or employer contributions are paid

to LASERS• No additional service credit earned• Continue to earn and use leave credit• Eligible for merit increases, promotions,

demotions, etc.

199

After DROP Participation

Members eligible for DROP 01/01/2004 or later:

DROP funds will be transferred to Self Directed Plan (SDP) with Great West Retirement Services

200

DROP Interest (Accounts held at LASERS)

• Interest rates change annually based on investment earnings

• Past interest rates do not guarantee future success

201

Interest on LASERS DROP/IBO Accounts

2008-09 = 0.00% 1998-99 = 12.60%2007-08 = 7.99% 1997-98 = 12.47%2006-07 = 13.71% 1996-97 = 13.53%2005-06 = 12.46% 1995-96 = 11.84%2004-05 = 11.23% 1994-95 = 8.99%2003-04 = 5.56% 1993-94 = 8.38%2002-03 = 0.00% 1992-93 = 7.55%2001-02 = 0.00% 1991-92 = 9.90%2000-01 = 0.00% 1990-91 = 9.50%1999-00 = 13.28%

202

Supplemental Benefit After DROP

• If DROP participant works less than 36 months, use pre-DROP FAC

• If DROP participant works more than 36 months, use post-DROP FAC

• Unused leave supplement, FAC used depends on length of service worked after DROP

• Must work at least 13 days after DROP participation ends to accumulate additional service credit

203

Withdrawals from DROP/IBO Accounts

• Monthly• Annually• Lump sum• Rollover• Annuity• Leave in DROP/IBO account until age 70

½ and earn interest, if payable

Withdrawals from DROP/IBO Accounts

• Cannot withdraw any monies from DROP/IBO accounts until state employment ends

• Quarterly statements provided

• Subject to federal taxes upon withdrawal

• State tax exempt

204

205

Tax Implications - DROP/IBO, Leave, and Refund Lump Sum Withdrawals

• 20% mandatory income tax withholding• 10% tax penalty applies if lump sum

received/not rolled over before age 59 1/2

Exceptions to 10% tax penalty:• Receive payment after separation from

service during or after reaching age 55• Receive payment after age 59 1/2• Receive payments in equal periodic

payments over life expectancy or joint life expectancies

206

DROP/IBO Withdrawals

• Please verify current withdrawal rules and regulations

• Keep current with IRS withdrawal rules and regulations

• All laws and regulations are subject to change periodically

207

Death during/after DROP

• Benefits paid to named beneficiary according to retirement option chosen

• DROP account payable to named beneficiary

• Leave converted to retirement credit

208

DROP Example

• At beginning of DROP, member had 30 years service credit/AC is $30,000/1500 hours annual leave/1500 hours sick leave

• At end of DROP, member had 1000 hours annual leave/1500 hours sick leave

• At termination, member worked two years after DROP/1200 hours annual leave/1000 hours sick leave

209

DROP Example

DROP Benefit:30 years X 2.5% X $30,000 + $300 = $22,800/$1,900

Leave Benefit:1200 hrs annual + 1000 hrs sick = 275 days275 days = 1.1 years of service credit1.1 X 2.5% X $30,000 = $825

Additional service credit benefit:2 years X 2.5% X $30,000 = $1,500

Final retirement benefit:$22,800 + $825 + 1,500 = $25,125/$2,093.75

Amount in DROP Account (36 months):$1,900 X 36 = $68,400

210

Another DROP Example

• At beginning of DROP, member had 30 years service credit/AC is $30,000/1500 hours annual leave/1500 hours sick leave

• At termination, member worked four years after DROP/AC is $35,000/1200 hours annual leave/1000 hours sick leave

211

Another DROP Example (Cont’d)

• DROP Benefit: 30 X 2.5% X $30,000 +$300=$22,800/$1,900

New AC after DROP = $35,000• Leave Benefit: 1200 + 1000 = 275 days

275 days = 1.1 years service credit1.1 X 2.5% x $35,000 = $962.50

• Additional service credit benefit:

4 years X 2.5% X $35,000 = $3,500

• Final retirement benefit:$22,800 + $962.50 + $3,500= $27,262.50/$2,271.87

• Amount in DROP Account (36 months): $68,400

212

DROP Procedures

• Submit Application• Application for DROP, Form 9-1

• If eligible to retire after 01/01/2004

• Application for DROP, Form 9-1A• If eligible to retire on or before 01/01/2004

• Member completes Sections 1-7

• Agency certifies Section 8

213

DROP Procedures

• Required Documents• Copies accepted

• Signed Social Security card for member and beneficiaries

• Birth certificates for member and beneficiaries• Marriage certificate if Option 4-A chosen

• Certified true copy of divorce decree, if applicable

• Spousal Consent Form, Form 4-4 if applicable

214

DROP Procedures

• Terminate Employment• Certification at End of Employment, Form 9-2

• Member completes Section 1-3• Agency certifies Section 4

• Required Documents• No copies accepted

• Authorization for Direct Deposit, Form 4-5• W-4P• Insurance Premium Deduction Authorization. Form 6-2

215

DROP Procedures

• Authorization for Direct Rollover, Form 2-1A must be completed if member selects to rollover their lump sum or leave payment.




216

DROP Procedures

• Continue Employment After DROP• Certification of Continued Employment After

DROP Participation, Form 9-2A• Member completes Sections 1 & 2


217

DROP Procedures

• Withdrawal from LASERS DROP Account

• Complete Request for Withdrawal from DROP/IBO Account, Form 9-3

• Complete Authorization for Direct Rollover, Form 2-1A if member selects to rollover monies to a qualified plan

218

Self Directed Plan (SDP)

• Members eligible for DROP/IBO on or after 01/01/2004 required to enter SDP

• Members with DROP/IBO account before 01/01/2004 have irrevocable option to transfer to SDP

• Spousal beneficiaries with DROP/IBO account before 01/01/2004 have option to transfer to SDP

219

Self Directed Plan (SDP)

• LASERS will manage subaccount while member participates in DROP

• Irrevocably elect to move 100% of DROP/IBO assets

• Balance is NOT protected from losses

• Great West Retirement Services will administer the account after DROP participation

220

Self Directed Plan

• Initial Benefit Option• When preliminary calculation done, 80% of IBO

balance transfers at termination

• When final calculation complete, remaining 20% transfers

Self Funded Cost of Living Allowance (COLA)-Act 270 of 2009

• Provides for an actuarially reduced retirement allowance with a guaranteed annual 2.5% COLA, effective 7/1/2009

• Make election upon application for retirement, IBO or DROP; election is IRREVOCABLE

• Not available to disability retirees

221


• COLA payable to retirees at age 55 or older

• COLA paid annually on the retiree’s anniversary date or DROP anniversary date

• Also, if eligible for additional System Generated COLA granted by legislature if all criteria met

222


• DROP Participants:• COLA will be credited to the participant’s DROP

subaccount during DROP participation period• Following DROP participation, COLA will be

applied to the member’s benefit even if they work after DROP

• COLA will apply to any supplemental benefits the DROP participant earns

223


• Spousal beneficiary will receive self funded COLA after death of retiree

• Non-spousal beneficiary will NOT receive COLA after death of retiree

224


Example: Retiree: 61 years old; Service Credit: 26.7 Leave Balance: 2.3 years; Total Service Credit w/Leave: 29 years; Annual FAC: $59,266.20; Monthly: $4,938.85

Maximum Retirement Benefit Maximum Retirement Benefit (No COLA) with COLA

29 X 2.5% X $4938.85 + $25 = $3605.67 X .809395 (COLA reduction) = $3605.67 monthly $2918.41 monthly

NOTE: $3605.67 - $2918.41=$687.26 / $3605.67=19% reductionThis retiree was eligible for COLA at age 55

225

226

Questions?

227

Chapter 10

Rehired/Reemployed Retirees

228

Rehired/ReemployedRetirees

As of 05/09/2002, retiree hired in a LASERS eligible position must select one of three options:

• Option 1 – May earn 50% of annual retirement benefit• No contributions to LASERS

• Option 2 – Repay Benefit/Regain Membership• Contribute to LASERS• DROP, IBO and early retirement retirees cannot choose

this option

• Option 3 – Suspend Benefit• Contribute to LASERS• No earnings limits• Work less than 36 months, contributions refunded• Work more than 36 months, supplemental benefit

229

Rehired/ReemployedRetirees

• Rehired retirees on a restricted or temporary appointment have 10 or more years of service credit

• Rehired retiree would need to complete Reemployement of Retiree, Form 10-2 and select an option

230

Rehired/Reemployed Retirees Procedures

• Submit Reemployment of Retiree, Form 10-2• Retiree responsible for choosing one of three

options

• Retiree completes Sections 1-3


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• Required information• Form 10-2 must be submitted within 30 days

• Should retiree fail to make choice within 30 days, retiree considered reemployed under Option 3

• Will pay contributions• In order to change option must terminate and be

rehired under different option

Rehired/ReemployedRetirees Procedures

• LASERS does not require Reemployment of Retiree, Form 10-2 every year. A new Reemployment of Retiree, Form 10-2 is required if the retiree terminates and is rehired in same position or another position.

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• Exceptions – Do NOT complete Form 10-2 if: • Retiree in position eligible for another retirement

system

• Retiree has 30 years of retirement and is age 70 at date of hire

• Retiree hired under a professional services contract

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• Retiree Address Changes• Agency can submit change of address up to 6 months

through agency reporting either through ISIS, FTP, or Employer Self Serve-Member Maintenance

• Retiree can change address on LASERS website under Retiree Self Serve or by submitting Change of Address, Form 1-2

• Direct Deposit

• Retiree Payroll Deductions• Must submit in writing to companies listed in Lagniappe

Booklet and on website

• Retiree’s Death

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System Generated Cost-of-Living Adjustment (COLA), R. S. 11:542 C (1)

• These COLA’s are granted to retirees, survivors, and beneficiaries whenever the balance in the LASERS Experience Account is sufficient to fund such a benefit fully on an actuarial basis and there is legislative approval

• Any increase granted shall begin on the first of July following legislative approval and shall be paid annually

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Eligibility for System Generated COLA’s

The retiree must:

• Have received a benefit for at least one year; and

• Have attained at least age 60

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Eligibility for System Generated COLA’s

Non-retiree beneficiary will be eligible for the PBI if:

• Benefits had been paid to the retiree or the beneficiary, or both combined, for at least one year; and

• In no event before the retiree would have attained age 60

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Amount of System Generated COLA’s

The amount of system generated COLA’s shall equal an amount not to exceed the lesser of:

• Three percent, or

• If the increase in the Consumer Price Index (CPI-U) for the calendar year immediately preceding the cost of living increase is less than three percent, the cost of living increase shall be a sum equal to the CPI-U increase for that prior calendar year

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Questions?

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Chapter 12

Glossary

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Glossary

• Includes General Terms

• DROP Terms

• Definition of Part-time, Seasonal, and Temporary per Title 26-Internal Revenue

• List of Forms

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Chapter 13

Map to LASERS

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Chapter 14

LASERS Extras

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Chapter 14

• Website Contents• Seminars – can register for PREP and RRM

• Calculators: • Use Member Self Service

• Employer Self Service

• Agency and Member Forms

• Subscribe to Daily Beam weblog

• Investment allocations & experience

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Thank You

• We appreciate your attendance

• Encourage all staff to attend RRM workshops and read all Liaison Memorandums submitted by LASERS

• Please complete your evaluation form

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Questions?