Current through Register Vol. 50, No. 9, September 20, 2024
A.
The DROP benefit of any member may not exceed the annual benefit authorized by
Section 415(b) of the Internal Revenue Code. For purposes of
determining whether a member's benefit exceeds the limitations of this
Subsection, the following shall apply:
1.
Adjustment if benefit not a straight life annuity.
a. If the form of benefit is other than a
straight life annuity, such benefit shall be adjusted actuarially to the
equivalent of a straight life annuity to determine whether the limitations set
forth in this Subsection are met.
b. For the purposes of this Subsection, no
adjustment shall be taken into account for any ancillary benefit which is not
directly related to retirement income benefits.
2. Adjustment if benefit commences before age
62.
a. If the benefit distribution commences
before age 62, the actual retirement benefit shall not exceed 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(b)(2)(E) of the Internal Revenue
Code, of $160,000, as of January 1, 2002, adjusted annually pursuant
to Section 415(d) of the Internal Revenue Code, commencing at
age 62. 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 shall be required under this
Subsection if the member is a "qualified participant" as that term is defined
in Section 415(b)(2)(H) of the Internal Revenue
Code.
c. No adjustment
shall be required under this Subsection if the benefit is payable due to the
member's disability or preretirement death.
3. If the benefit distribution commences
after age 65, the adjusted dollar limitation shall be the equivalent,
determined in a manner consistent with the adjustments under Section
415(b)(2)(E) of the Internal Revenue Code, of $160,000, as of
January 1, 2002, adjusted annually pursuant to Section 415(d) of the
Internal Revenue Code, commencing at age 65. 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. The maximum retirement benefit payable
under this Section to any member who has completed less than 10 years of
credited service shall be the number determined under Subsection A multiplied
by a fraction, the numerator of which shall be the number of years of service,
and the denominator of which shall be 10.
C. Notwithstanding the foregoing, the benefit
payable to a member shall not be deemed to exceed the limits of Subsection A if
the total benefits payable to a member under all defined benefit plans
maintained by the state, its agencies, or its political subdivisions do not
exceed $10,000 and the state, its agencies, or its political subdivisions have
never maintained a defined contribution plan in which the member has
participated.
D. Any benefit that,
as a result of an election made under
R.S.
11:447(A), would exceed the
limitations on benefits imposed by Section 415(b) of the Internal
Revenue Code shall be paid into the excess benefit arrangement
established under
R.S.
11:454.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
11:515.
