la-202610-034a616f35: Deferred Retirement Option Plan (DROP) and Optional Retirement Plan (ORP)

A. - A.6.b....

c.if a member has reached his required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, when he chooses a partial single sum after withdrawals have begun, even though he retired at a younger age, he will have the required minimum distribution calculated using the “Single Life Table” (SLT), or he may choose the “Uniform Lifetime Table (ULT), or the “Joint and Last Survivor Table” (JLST), whichever applies. The result of using one of these tables may allow a member to lower his monthly or annual withdrawal; 7.... B.Selection of the withdrawal method and the amount of the periodic payment must be complete, correct, and on the form prescribed by TRSL. The correctly completed prescribed TRSL form should be received by TRSL 30 days prior to the disbursement, but no later than 8 business days prior to disbursement. Members who have not reached their required beginning date, as defined by Section 401(a)(9) of the Internal Revenue Code, in the year of retirement must begin withdrawals within 12 months of the date of retirement. Members who have reached their required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, in the year of retirement must begin withdrawals by April 1 of the calendar year following the date of retirement or 12 months after retirement, whichever is earlier. AUTHORITY NOTE:Promulgated in accordance with R.S. 11:784, R.S. 11:786-790 and R.S. 11:826. HISTORICAL NOTE:Promulgated by the Department of the Treasury, Board of Trustees of the Teachers’ Retirement System of Louisiana, LR 18:261 (June 1992), repromulgated LR 24:501 (March 1998), amended LR 28:1031 (May 2002), LR 28:2569 (December 2002), LR 46:1242 (September 2020), amended LR 53: §511.Change of DROP Withdrawal Method A.The participant will have one opportunity per 12-month period to change the chosen withdrawal method and/or amount if the original method selected was either §509.A.2, 3, 4, or 5. Any change must be made in accordance with the life expectancy of the participant. 1.For participants who have not reached their required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, any change in the withdrawal method must be made in accordance with the life expectancy of the participant at the time of his retirement, and at no time may the disbursement from the account be less than the amount of the originally selected periodic payment. 2.For participants who have reached their required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, at the time of the change, the change in the withdrawal method may allow the participant to reduce the disbursement only if the participant had not reached his required beginning date at the time he began withdrawals. Otherwise the rule under §511.A.1 will apply. B.Except as provided below, when the life expectancy of the participant governs the selected periodic withdrawal method, disbursements from the DROP account shall be made in accordance with the “Single Life Table” (SLT) for participants first eligible to begin withdrawing. 1.If a retiree has reached his required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, he must meet a required minimum distribution (RMD) and may request the use of the “Single Life Table” (SLT), “Uniform Lifetime Table” (ULT) or the “Joint and Last Survivor Table” (JLST), whichever applies. Once the election has been made he cannot elect to make a change at a later date. C.… AUTHORITY NOTE:Promulgated in accordance with R.S. 11:739, R.S. 11:784, and R.S. 11:786-790. HISTORICAL NOTE:Promulgated by the Department of Treasury, Board of Trustees of the Teachers’ Retirement System of Louisiana, LR 18:261 (June 1992), repromulgated LR 24:502 (March 1998), amended LR 24:961 (May 1998), LR 28:1031 (May 2002), LR 28:2569 (December 2002), LR 46:1242 (September 2020), amended LR 53: Chapter 15.Optional Retirement Plan (ORP) §1513.Distributions A.… B.The ORP provider shall offer ORP participants the following single-sum cash payments: 1.direct transfers by and between ORP providers; 2.death benefits; and, 3.an initial benefit payable upon retirement, provided such benefit is approved by the ORP provider. The initial benefit shall not exceed an amount equal to the participant’s monthly benefit, payable as a single-life annuity with no guarantees, times 36. C.Minimum Distributions 1.For purposes of this Section, the following definitions shall apply. * * * Required Beginning Date—April 1 of the calendar year following the later of: i.the calendar year in which the participant attains the required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code; or ii.the calendar year in which the participant retires. ii.(a). - C.2.… 3.The participant’s entire interest will be distributed, or begin to be distributed, to the participant no later than the participant’s required beginning date. If the participant dies before distributions begin, the participant’s entire interest will be distributed, or begin to be distributed, no later than as follows: a.If the participant’s surviving spouse is the participant’s sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the participant died, or by December 31 of the calendar year in which the participant would have attained his required beginning date, as defined in Section 401(a)(9) of the Internal Revenue Code, or April 1 following the calendar year in which the surviving spouse reaches the spouse’s required beginning date as defined in Section 401(a)(9) if the surviving spouse submits to the retirement system at least 30 days prior to any required distributions, or the deadline provided by federal law or regulation, an acceptable election, as provided by the system, to be treated as a member for this purpose. C.3.b. - C.8.a.i.… ii.notwithstanding Clause a.i, if the designated beneficiary is an eligible designated beneficiary, then the participant’s entire interest shall be distributed beginning no later than December 31 of the calendar year immediately following the calendar year in which the participant died, over the life of the eligible designated beneficiary or over a period not exceeding the life expectancy of the eligible designated beneficiary. If the eligible designated beneficiary is the surviving spouse, payment is not required until the later of December 31 of the calendar year immediately following the calendar year in which the participant died or December 31 of the calendar year in which the participant would have attained the required beginning date as defined in Section 401(a)(9) of the Internal Revenue Code. C.8.iii. - F.4.… AUTHORITY NOTE:Promulgated in accordance with R.S. 11:826 and 921-929. HISTORICAL NOTE:Promulgated by the Department of Treasury, Board of Trustees of the Teachers’ Retirement System of Louisiana, LR 40:2275 (November 2014), amended LR 47:1902 (December 2021), amended LR 53: Family Impact Statement The proposed Rule should not have any known or foreseeable impact on any family formation, stability, and autonomy. In particular, the proposed Rule has no known or foreseeable impact on: 1.the stability of the family; 2.the authority and rights of persons regarding the education and supervision of their children; 3.the functioning of the family; 4.family earnings and family budget; 5.the behavior and personal responsibility of children; 6.the ability of the family or a local government to perform the function as contained in the proposed Rule. Poverty Impact Statement The proposed Rule should not have any known or foreseeable impact on any child, individual, or family as defined by R.S. 49:973(B). In particular, there should be no known or foreseeable effect on: 1.household income, assets, and financial security; 2.early childhood development and preschool through postsecondary education development; 3.employment and workforce development; 4.taxes and tax credits; 5.child and dependent care, housing, health care, nutrition, transportation, and utilities assistance. Small Business Analysis The proposed Rule should have no adverse impact on small businesses as defined in the Regulatory Flexibility Act. Provider Impact Statement The proposed Rule should not have any known or foreseeable impact on providers as defined by HCR 170 of the 2014 Regular Legislative Session. In particular, there should be no known or foreseeable effect on: 1.the staffing level requirements or qualifications required to provide the same level of service; 2.the total direct and indirect effect on the cost to the providers to provide the same level of service; or 3.the overall effect on the ability of the provider to provide the same level of service. Public Comments Interested persons may submit written comments to the Teachers’ Retirement System of Louisiana on the proposed Rule until 12 p.m. on November 10, 2026, to Bridget B. Denicola, Executive Counsel, Board of Trustees for the Teachers’ Retirement System of Louisiana, P.O. Box 94123, Baton Rouge, LA 70804-9123. Public Hearing Interested parties may submit a written request to conduct a public hearing to the Teachers’ Retirement System of Louisiana, Attention: Bridget B. Denicola, Executive Counsel, Board of Trustees for the Teachers’ Retirement System of Louisiana, via U.S. Mail to P.O. Box 94123, Baton Rouge, LA 70804-9123, or via hand delivery; however, such request must be received by no later than 12:00 p.m. on November 10, 2026. If the criteria set forth in R.S. 49:961(B) are satisfied, a public hearing will take place at 2 p.m. on December 1, 2026 in the Boardroom, located on the fourth floor of the Louisiana Retirement Systems Building at 8401 United Plaza Blvd., Baton Rouge, LA 70809. If a public hearing is to be held, all interested parties are invited to attend and present data, views, comments, or arguments, orally or in writing. Katherine Whitney Director FISCAL AND ECONOMIC IMPACT STATEMENT FOR ADMINISTRATIVE RULES RULE TITLE: Deferred Retirement Option Plan (DROP) and Optional Retirement Plan (ORP) I.ESTIMATED IMPLEMENTATION COSTS (SAVINGS) TO STATE OR LOCAL GOVERNMENT UNITS (Summary) The proposed amendment to the rules will not have any fiscal impact on state or local government units. The proposed amendment to the rules ensures compliance by the Teachers' Retirement System of Louisiana ("TRSL") with R.S. 11:784(A) and (C)(2), as amended by Act 24 of the 2026 Regular Legislative Session, and conformity with revisions to the Internal Revenue Code. The proposed amendment to the rules provides that the required beginning date ("RBD") for TRSL members who have a Deferred Retirement Option Plan ("DROP") account will be the same as that used in Section 401(a)(9) of the Internal Revenue Code, as amended by the SECURE Act and SECURE 2.0 Act, i.e., the age that triggers a required minimum distribution ("RMD") for a TRSL member with a DROP account will increase depending upon the member's date of birth. In addition, the proposed rules provide that TRSL participants who have an Optional Retirement Plan ("ORP"), will be subject to the same RBD age rule as those who have a DROP account, i.e., the RBD for ORP participants will be the same required beginning date as defined in Section 401(a)(9) of the Internal Revenue Code, as amended by the SECURE Act and SECURE 2.0 Act. This proposed amendment to the rules is not expected to have any discernible negative impact to TRSL or State or local governmental units since the rules are intended to ensure that TRSL remains in compliance with State and Federal laws and regulations. II.ESTIMATED EFFECT ON REVENUE COLLECTIONS OF STATE OR LOCAL GOVERNMENTAL UNITS (Summary) The proposed amendment to the rules will not impact state or local governmental revenue collections. III.ESTIMATED COSTS AND/OR ECONOMIC BENEFITS TO DIRECTLY AFFECTRED PERSONS, SMALL BUSINESSES, OR NONGOVERNMENTAL GROUPS (Summary) The proposed amendment to the rules will directly benefit the TRSL members by allowing members of TRSL, who have a DROP account or participants with an ORP account, to delay taking their RMDs. This allows these individuals greater discretion over when to withdraw funds from their DROP or ORP account. IV.ESTIMATED EFFECT ON COMPETITION AND EMPLOYMENT (Summary) Katherine WhitneyPatrice Thomas DirectorDeputy Fiscal Officer 2610#032Legislative Fiscal Office