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Retirement Manual - Transaction That Alter Service Credit

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Webster Parish Clerk of Court

Hon Holli Vining

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Clerks' Association

 

Board of Trustees Membership Information Active Members Information Regular/DROP Benefits Retirement Manual Retirement Forms

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Repayment of Withdrawn Accumulated Employee Contributions – (See R. S. 11: 1516)

If a former member who has withdrawn his accumulated employee contributions again becomes a member of the fund, he has the option to repay the amount he withdrew plus compounded interest.  Upon such repayment, the member is given credit for the prior service, which was cancelled at the time of the prior refund.  The amount he repays must be paid in a lump sum, and will include compound interest of eight percent per year beginning on the date the refund was issued.

For the purpose of repayment of a refund of employee contributions, the fund will accept payment by a trustee-to-trustee transfer to the fund from an annuity in compliance with Section 403(b) of the Internal Revenue Code or any successor thereto, or from a deferred compensation plan in compliance with Section 457 of the Internal Revenue Code or any successor thereto, as long as the transfer complies with all other applicable provisions of federal and state law.

Credit for Noncredited Prior Service – (See R. S. 11:1517)

Any person who was eligible for membership in the fund but was not enrolled for any reason may receive credit for the time such person was otherwise eligible for membership.  The clerk for whom the person was employed must certify the dates of employment and the salary earned by the member during these dates, or the person shall submit such other evidence in lieu thereof as shall be requested by the board.  The person, the clerk for whom the person was employed, and any other person submitting evidence on his behalf, shall certify all evidence by an affidavit in authentic form.  Should any facts or evidence not be true which would disqualify him from benefits, the person shall lose all rights to any benefits from the system.  In order to receive such credit the person shall pay to the system an amount which, on an actuarial basis, totally offsets the increase in accrued liability of the fund resulting from the receipt of the credit.  The amount payable shall be calculated by use of the actuarial funding method, assumptions, and tables in use by the fund at the time of application for credit.  No credit shall be given until the payment is paid in full.

Reciprocal Recognition of Credited Service in Other Public Retirement Systems – (See R. S. 11:142)

A member of the system, or an eligible survivor of a member, who has credit for service in any other Louisiana state, municipal, or parochial public retirement system may combine all service for which the member has credit in order that eligibility for regular retirement, disability retirement, or survivor benefits may be acquired.  Such reciprocal recognition is available only to members who have earned credit for at least six months service in this system.

To exercise this option, a member or survivor of a member must make application to the system. The application must contain the name of all other retirement systems in which the member claims membership service credit and any other necessary information. An application for reciprocal recognition made by an eligible survivor of a deceased member must be approved by the board of trustees.

Each retirement system must permanently keep and retain complete records on each member and retain and maintain all contributions and liabilities for service performed by the member while a member of that retirement system.

Eligibility for regular retirement, disability retirement, or survivor benefits requires the member to meet the highest age and years of service requirements of each system in which he/she has membership service credit.  Service in any one system sufficient to meet the eligibility requirements of that system will qualify the member to receive benefits from that system, but no member will be eligible to receive benefits from any system while contributing to another system.

Upon retirement, each system in which a member has membership service credit will compute the benefit due from that system using its benefit formula and the following provisions apply:

  1. Only the compensation and years of service actually earned or credited in each system will be used in the computation of benefits payable by each system.
  2. If the benefit computation of a system requires the use of a minimum number of years and the member has credit in the system for fewer than the minimum number of years, the benefit will be a pro-rata portion of the benefit using the minimum required years of service.  The pro-rata will be based on the membership service credit in the system as a percentage of the minimum number of years required.

Each system must notify the others of the amount of benefits payable by it and show the computation of the benefit.  In addition, all of the systems involved may agree that benefit payments will be made by one system, with the other systems to reimburse the system making the payments for their portion of the total benefit.

No more than one year of membership service may be credited for any one calendar or fiscal year, and there may be no duplication of membership service credit for any period, including credit for military service.  No more than a total of four years of military service may be credited unless five years of such credit has been obtained under the rules applicable in a system, in which case a maximum of five years may be credited.  In the event of duplication of military service credit in more than one system or a total credit for military service in excess of five years, the retirement systems involved will mutually agree on an appropriate procedure to assure that maximum credit in all systems does not exceed five years.

The total benefits payable from all systems, plus primary employee social security benefits then available by reason of the fact that social security is a part of any of the retirement systems involved, may not exceed:

  1. One hundred percent of the highest average compensation on which benefits are based, or,
  2. The highest benefit that any one of the systems would provide if all service had been credited in that system.

If the total computation exceeds either (1) or (2) above, then each retirement system must reduce the benefits it will pay in the proportion its benefits represent of the total computed benefits.
 
Membership in any state, municipal, or parochial public retirement system for which a member’s employment makes him eligible may not be denied an employee by reason of attained age if that employee’s credited service in another state, municipal, or parochial public retirement system, together with the prospective employment in that system until normal retirement age, would make him eligible for regular retirement benefits.

In those retirement systems where thirty-six months or three years is used in the computation of average compensation, the average salary will be computed on the actual time in the retirement system when the person has less than thirty-six months of service.

A member may cancel an application for or agreement of reciprocal recognition of service credit prior to retirement by notifying each system in which the member has service credit.

Transfers Between Public Retirement Systems – (See R. S. 11:143)

A person who has been a member of the system for at least six months and who has membership credit in any other Louisiana state, municipal, or parochial public retirement system may transfer all of their credit from every other system into this system, based upon the following.

All credit that the employee has in the system, fund, or plan from which he/she is transferring, whether credit for regular service, prior service, military service, or other credit, must be transferred, except as provided below:

  1. In the event that the member has six months or more of concurrent service in the transferring system and this system, the concurrent service in the transferring system and the funds attributable to such service shall remain in the transferring system; and,
  2. In the event that the member has less than six months of concurrent service in the transferring system and this system, the concurrent service in the transferring system shall be canceled and the funds attributable to such service shall be transferred to this system.

The system from which the person transfers such credit will transfer to this system an amount equal to the lesser of the following:

  1. The greater of the actuarial cost to this system for the credit transferred or all employee contributions previously made to the transferring system; or,
  2. All employee and employer contributions made to the transferring system by and/or on behalf of such person, and interest on those contributions equal to the transferring system's actuarial valuation rate, compounded annually from each year of contribution to the date of the transfer.  In systems where the employer contribution is not a fixed percentage of the employee's earnings, an employer contribution equal to the employee's contributions will be transferred.

If the amount of funds transferred from the transferring system is less than an amount which, on an actuarial basis, totally offsets the increase in accrued liability resulting from the transfer of the credit, then the person transferring, except as otherwise provided, must pay the difference between the amount of the funds transferred and the actuarial value of the credit transferred.  In lieu of paying the difference, the person may, but only at the time of the transfer, be granted an amount of credit in this system based on the actuarial value of the amount of funds actually transferred by the transferring system.

If a person completes a transfer, the retirement accrual factor of the transferring system will be used to calculate the portion of the retirement benefit that is based on the transferred credit.

After the transfer is completed, the system from which the member transferred will have no future liability with respect to the person who transferred.

A member of this system must make a written application to this system to request a transfer.

If a member dies after a written application for a transfer is received in the office of this system, this system will complete the transfer and it will be considered as having been completed the day before the death of the member.  A survivor, heir, or the estate of a deceased person or member may not request a transfer.

In addition, and subject to all of the above conditions, a member may execute a reverse transfer (i.e. transfer from his current public retirement system to the public retirement system to which he last contributed).  Such a transfer may only be executed once and the transfer must be executed immediately prior to retirement from the receiving system.  The request for a reverse transfer must be accompanied by the member's application for retirement from the receiving system and, on the day of the transfer, the member must terminate employment that made him eligible to be a member of the transferring system.  The member's date of retirement from the receiving system shall be made effective on the next business day following the transfer.  The member is allowed to apply the transferred credit toward attainment of the retirement eligibility requirements of the receiving system.  Any member who would not be eligible to retire from the receiving system after the transfer may not execute a reverse transfer.  Any member who executes a reverse transfer and is re-employed by an employer who participates in the transferring system shall be ineligible for membership in the transferring system after the effective date of the transfer.

A person who formerly was a member of this system, who has credit and contributions on deposit with this system, and who becomes a member of any of the other public retirement systems in this state may transfer credit and contributions plus interest out of this retirement system into the other public retirement system if the other system allows such transfers.

Repayment of Refunded Contributions for Purposes of Reciprocal Recognition or Transfer – (See R. S. 11:144)

A member of this system who has credit in this system for at least six months of service may repay refunded contributions to any other state, municipal, or parochial public retirement system, plus compounded interest at the other system's board approved actuarial valuation interest rate from the date of refund until repayment, to reestablish such credited service for purposes of attaining reciprocal recognition of service credit in more than one system or transfer service credit to this system.

Likewise, a member of any other public retirement system in this state who has credit therein for at least six months of service may repay refunded contributions to this system, plus compounded interest thereon at this system's board approved actuarial valuation rate from the date of refund until repayment, to reestablish such credited service for purposes of reciprocal recognition or to transfer such service to the other system.

 Purchase of Military Service Credit – (See R. S. 11:153)

A member of the system may purchase credit for regular or non-regular military service.  Regular military service means any state or federal full-time active duty military service.  Non-regular military service means any state or federal military service, which is not regular service, for which retirement points are assigned for participation in such service, including, but not limited to, duty served in the state national guard, coast guard, or any reserve component of the United States armed forces.

A member may purchase credit for up to four years of either regular or non-regular military service, or a combination of both, not exceeding four years total.  In order to purchase military service, an application must be filed with the system.  Included with the application must be proof of the inclusive dates of military service, such as a copy of the member’s Form DD 214, or an official copy of the record of retirement points as maintained by the member’s respective military branch.

Credit for regular service shall be based on one day of retirement credit for each day of full-time service.  Credit for non-regular service shall be based on one day of retirement credit for each one of the member’s accrued retirement points.
 
In order to purchase credit for such regular or non-regular military service, the member must pay, in one lump sum (or, if agreed to by the Board of Trustees, in installments over no more than three years), an amount determined by the general rule relative to the purchase price of retirement credit (see Purchase Price of Retirement Credit - Actuarial Cost).  Generally, this is an amount that, on an actuarial basis, totally offsets the increase in accrued liability of the system resulting from the purchase of the credit.

No member may purchase credit for military service if credit has already been granted for such service in any other Louisiana public retirement system from which the member is receiving any form of retirement benefits.

No member who previously received credit for military service in any retirement system for members of the armed forces of the United States from which plan the member is drawing a regular retirement benefit may purchase such military credit.  This restriction does not apply to members who are drawing disability benefits based on twenty-five percent or less disability received as a result of military service.  In addition, members who are receiving retirement benefits pursuant to Chapter 1223 of Title 10 of the United States Code may purchase credit for military service, either regular or non-regular, provided that the service was rendered prior to the initial date of employment covered by this system.

Any retiree who has earned benefits equal to one hundred percent of average final compensation may purchase military credit only for the limited purpose of using such credit for survivor benefits.

Military service credit may not be used in the computation of average final compensation for retirement benefit computation purposes.

No member who was released or discharged from service under less than honorable conditions may purchase credit for military service.

Purchase Price of Retirement Credit - Actuarial Cost  (See R. S. 11:158(C))

The purchase of retirement credit, other than the receipt of current credit which requires regular employee and employer contributions and the repayment of refunded contributions, which is otherwise authorized, requires payment to the system of the greater of either:

  1. The actuarial cost of the credit which is defined as an amount that, on an actuarial basis, totally offsets the increase in accrued liability of the system resulting from the purchase of the credit; or,
  2. The employee and employer contributions that would have been paid plus interest thereon, compounded annually from the time the contributions would have been paid, at the system's assumed actuarial valuation rate of interest.

The amount payable will be calculated by use of the system's actuarial funding method, assumptions, and tables in use at the time of application for purchase of the credit.  The actuary may modify the assumptions utilized to reflect the effects of anti-selection.

Credit for Certain Military Service Which Interrupts Covered Employment (See R. S. 29:411-412 and R. S. 29:414)

Any employee who leaves covered employment to perform military service, completes service in the uniformed services, and applies for re-employment upon release from service or discharge from hospitalization incidental to service is entitled to receive up to a maximum of four years of retirement credit for such period of service. 

For purposes of these provisions, the term “service in the uniformed services” means the performance of duty on a voluntary or involuntary basis in a uniformed service under competent authority and includes active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, and a period for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the person to perform any such duty.  Active duty by members of the National Guard who are activated pursuant to a call of the governor as provided by law, and service in the armed forces of the United States pursuant to Congressional authority or presidential proclamation under the War Powers Resolution, also qualifies.

Members that wish to continue to receive retirement credit for their period of military service may pay the required employee contributions to the retirement system during such period of service in the uniformed services.  Employee contributions that would have been deducted from the member’s compensation for retirement system coverage must be paid to the employer on a timely basis.  Upon receipt, the employer must remit the employee contributions to the retirement system along with the employer contributions that would have been contributed on behalf of the member.  The employee must notify the employer of the election to pay the required employee contributions at the time of entry into service in the uniformed services.

Any member who did not elect to make employee contributions as provided above can receive credit for service in the uniformed services upon payment into the system of an amount equal to the employee contributions that would have been paid had the member continued in employment and not been called to service in the uniformed services, together with interest on such contributions at the valuation interest rate of the system in effect at the time payment is made.  The contributions must be based on the salary, including any increases in compensation, which the member would have received had he/she remained in employment during the period of service in the uniformed services. Upon such payment by the employee of the employee contributions and interest, the employer must pay the employer contributions that would have been paid had the employee remained in service, plus interest at the valuation interest rate in effect at the time payment is made.  The employer contributions and interest must be paid within thirty days after the employee has paid all of the employee contributions due to the system.  All employee contributions and interest due under this provision must be received by the system within the greater of four years of the member's re-employment or the period of time allowable under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).  If the member fails to pay the required contributions and interest within the allotted period, the credit for service in the uniformed services shall only count toward determining eligibility for retirement benefits and not toward the computation of such benefits.

The member's period of service in the unformed services is counted as creditable service for purposes of determining eligibility for survivor benefits and in the computation of such benefits if the following conditions are satisfied:

  1. The beneficiary of survivor benefits provides payment of the unpaid portion of the employee contributions, plus applicable interest, of the deceased member.  The beneficiary may agree, in writing, to have the payment of the unpaid portion deducted from the benefits over a period of time, not to exceed four years.  Alternatively, the beneficiary may pay the actuarial cost of such additional credit in a lump sum prior to the distribution of benefits.
  2. If there is more than one beneficiary, a written agreement to pay the unpaid contributions must be unanimous.  In the event that a beneficiary is a minor child, the legal guardian of the minor child must express consent for the minor child.

If the above conditions are satisfied, the employer must pay the employer contributions plus applicable interest.  If the beneficiary elects not to pay the employee contributions, the computation of the survivor benefits shall be based on the actual credit of the member prior to being called to service in the uniformed services.

The provisions of this entire section do not apply to any member who is a participant in the Deferred Retirement Option Plan.

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