Signed by Governor Bobby Jindal

Vote Smart's Synopsis:

Vote to adopt a conference report that amends state workers pensions, effective June 30, 2012.

Highlights:

• Establishes a cash balance plan for the following state retirement systems and categorizes them as “Tier 1” (Sec. 1):
• Louisiana State Employees' Retirement System;
• Teachers' Retirement System of Louisiana; and
• Louisiana School Employees' Retirement System.

• Requires a contribution of 8 percent of an individual's salary to be made to the cash balance plan for  “Tier 1” state retirement systems (Sec. 1).

• Requires the cash balance plan member's account to be credited with 12 percent of the member's monthly pay, including all employee contributions (Sec. 1).

• Prohibits an individual's cash balance account to be debited for investment losses (Sec. 1).

• Prohibits a retirement system from paying total benefits that are less than the total contributions of an employee (Sec. 1).

• Prohibits members of the Hazardous Duty Services Plan from joining cash balance plans (Sec 1).

• Requires employer contributions to retirement plans to include cash balance retirement plans (Sec. 1).

• Requires interest earnings to be credited to an individual's cash balance account each year at a rate equal to the retirement system's certified rate of return minus 1 percent (Sec. 1).

• Authorizes an individual who separates from employment that covers their retirement plan to also withdraw from the cash balance plan (Sec. 1).

• Authorizes individuals who withdraw from the cash balance plan after having the plan for less than 5 years to receive a refund of his or her contributions without interest, while the retirement system will retain all interest and employer contributions (Sec 1).

• Authorizes individuals who withdraw from the cash balance plan after having the plan for 5 years or more to receive a lump-sum payment or the distribution of the total account balance in the following forms (Sec. 1):
• A single-sum transfer payment to another qualified plan; or
• A payment made directly to a conduit individual retirement account.

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report that amends state workers pensions, effective June 30, 2012.

Highlights:

• Establishes a cash balance plan for the following state retirement systems and categorizes them as “Tier 1” (Sec. 1):
• Louisiana State Employees' Retirement System;
• Teachers' Retirement System of Louisiana; and
• Louisiana School Employees' Retirement System.

• Requires a contribution of 8 percent of an individual's salary to be made to the cash balance plan for  “Tier 1” state retirement systems (Sec. 1).

• Requires the cash balance plan member's account to be credited with 12 percent of the member's monthly pay, including all employee contributions (Sec. 1).

• Prohibits an individual's cash balance account to be debited for investment losses (Sec. 1).

• Prohibits a retirement system from paying total benefits that are less than the total contributions of an employee (Sec. 1).

• Prohibits members of the Hazardous Duty Services Plan from joining cash balance plans (Sec 1).

• Requires employer contributions to retirement plans to include cash balance retirement plans (Sec. 1).

• Requires interest earnings to be credited to an individual's cash balance account each year at a rate equal to the retirement system's certified rate of return minus 1 percent (Sec. 1).

• Authorizes an individual who separates from employment that covers their retirement plan to also withdraw from the cash balance plan (Sec. 1).

• Authorizes individuals who withdraw from the cash balance plan after having the plan for less than 5 years to receive a refund of his or her contributions without interest, while the retirement system will retain all interest and employer contributions (Sec 1).

• Authorizes individuals who withdraw from the cash balance plan after having the plan for 5 years or more to receive a lump-sum payment or the distribution of the total account balance in the following forms (Sec. 1):
• A single-sum transfer payment to another qualified plan; or
• A payment made directly to a conduit individual retirement account.

Full Bill Text