Louisiana § RS 11:2225.4 - Unfunded accrued liability; payment by employer

§ RS 11:2225.4. Unfunded accrued liability; payment by employer

            A.(1) If an employer fully dissolves its police department, the employer shall remit to the system, beginning the July first immediately following the date of dissolution, that portion of the unfunded accrued liability existing on the June thirtieth immediately prior to the date of dissolution of the police department, attributable to such employer and calculated using the allocation percentage included in the prior fiscal year's employer pension report produced according to requirements established by the Governmental Accounting Standards Board. The amount due pursuant to the provisions of this Paragraph shall include interest at the system's valuation interest rate.

            (2)(a) If a participating employer partially dissolves its police department, the employer shall be liable for a pro rata portion of the system's unfunded accrued liability. The portion shall be calculated by applying the percentage decrease in the salaries paid to participating employees by the employer on June thirtieth and salaries paid to participating employees by the employer as of June thirtieth of the prior year to the total payment that would have been required pursuant to the provisions of Paragraph (1) of this Subsection if the employer had fully dissolved its police department. Payments required pursuant to the provisions of this Paragraph shall include interest at the system's valuation interest rate.

            (b) A participating employer shall be deemed to have partially dissolved its police department if either of the following occurs:

            (i) The number of participating employees of the employer as of June thirtieth is less than seventy percent of the number of participating employees of the employer as of June thirtieth of the prior year and either the number of participating employees decreases by at least two or the number of participating employees is zero.

            (ii) The number of participating employees of the employer as of June thirtieth is at least fifty fewer than the number of participating employees of the employer as of June thirtieth of the prior year.

            (c) If, on the June thirtieth immediately following the transfer of employees from the city to the Baton Rouge Regional Airport Authority, the city is deemed to have partially dissolved its police department, the system shall determine whether the partial dissolution would have occurred without the transfer of employees. If no dissolution would have occurred without the transfer and the employees transferred to the authority remain members of the system, the city shall not be required to make the payments otherwise required by this Section. If the system determines that a partial dissolution would have occurred regardless of the transfer, and the transferred employees remain members of the system, then the amount due under the provisions of this Subparagraph shall be calculated without regard to those transferred employees.

            B.(1) Any amount due pursuant to Subsection A of this Section shall be determined by the actuary employed by the system and shall be amortized over fifteen years in equal monthly payments with interest at the system's valuation interest rate. Such payments shall be payable to the system electronically beginning July first of the second fiscal year following the determination by the actuary and in the same manner as regular payroll payments to the system. Beginning July first of the fiscal year following the withdrawal, interest shall accrue at the system's actuarial valuation rate, compounded annually.

            (2) If the number of participating employees of an employer subject to Paragraph (A)(2) of this Section returns to at least the number of participating employees as of the June thirtieth immediately preceding the withdrawal, the payments required by this Section shall cease on the July first following the determination by the actuary that a sufficient increase in participating employees has occurred, and no further payments shall be due with respect to the withdrawal. Any payments made pursuant to this Section shall be credited as an offset of any amounts due by the employer attributable to any subsequent withdrawal that occurs within fifteen years of the payments.

            C.(1) If an employer fails to make a payment timely, the amount due shall be collected in any of the following manners:

            (a) By action in a court of competent jurisdiction against the delinquent employer. The amount due shall include interest calculated at the system's actuarial valuation rate, compounded annually. The employer shall also be liable for any legal and actuarial fees incurred by the system in the collection of amounts pursuant to this Section.

            (b) The board may certify to the state treasurer all amounts attributable to the delinquent employer. In support of such certification, the board shall submit to the treasurer a resolution certifying the name of the delinquent employer, its failure to pay, and the amount owed and shall name a designee or designees to act on the board's behalf. Upon receipt of such certification, the treasurer shall deduct from monies payable to the certified delinquent party the certified amount due and shall remit such deducted amounts directly to the Municipal Police Employees' Retirement System.

            (2) Notwithstanding any other provision of law to the contrary, the board of trustees shall not collect any payments due from an employer for any partial dissolution that occurred prior to July 1, 2018.

            D. For the purposes of this Section, the following terms shall have the following meanings:

            (1) "Participating employee" shall mean an active member or participant in the Deferred Retirement Option Plan.

            (2) "Withdrawal" shall mean the dissolution or partial dissolution of a police department as described in Subsection A of this Section.

            Acts 2015, No. 43, §1, eff. June 5, 2015; Acts 2018, No. 586, §1, eff. July 1, 2018; Acts 2020, No. 124, §1, eff. July 1, 2020; Acts 2024, No. 673, §1, eff. July 1, 2024; Acts 2025, No. 118, §2, eff. June 8, 2025.