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A.  Should a member cease to be an employee except by death or retirement under the provisions of this Chapter, he shall be paid such part of the amount of the accumulated contributions standing to the credit of his individual account in the annuity savings fund as he shall demand.  Should a member die before retirement the amount of his accumulated contributions standing to the credit of his individual account shall be paid to his estate or to such person as he shall have nominated by written designation, duly executed and filed with the board of trustees, unless benefits are payable under La. Rev. Stat. 11:1636.

B.  Notwithstanding any other provision of law to the contrary that would otherwise limit a member’s election under this Section, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

C.  If a distribution is one to which 26 U.S.C. § 401(a)(11) and 417 do not apply, the distribution may commence fewer than thirty days after the notice required under 26 C.F.R. § 1.411(a)-11(c) is given, if both of the following apply:

(1)  The plan administrator clearly informs the member that he has a right to a period of at least thirty days after receiving the notice to consider the decision of whether or not to elect a distribution and, if applicable, a particular distribution option.

(2)  The participant, after receiving the notice, affirmatively elects a distribution.

D.  As used in this Section, the following terms shall mean the following:

(1)  “Direct rollover” means a payment by the plan to the eligible retirement plan specified by the distributee.

(2)  “Distributee” means a member or former member.  In addition, the member’s or former member’s surviving spouse, or the member’s spouse or former member’s spouse with whom a benefit or return of employee contributions is to be divided pursuant to La. Rev. Stat. 11:291(B) are distributees with reference to an interest of the member or former spouse.

(3)  “Eligible retirement plan” means an individual retirement account described in 26 U.S.C. § 408(a), an individual retirement annuity described in 26 U.S.C. § 408(b), an annuity plan described in 26 U.S.C. § 403(a), or a qualified trust described in 26 U.S.C. § 401(a), that accepts the distributee’s eligible rollover distribution.  However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.  “Eligible retirement plan” shall also mean an annuity contract described in 26 U.S.C. § 403(b) and an eligible plan under 26 U.S.C. § 457(b) that is maintained by the state or any political subdivision or instrumentality thereof agreeing to account separately for amounts transferred into such plan from this system.  A distribution to a surviving spouse or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order shall not make the retirement plan ineligible.

(4)  “Eligible rollover distribution” means any distribution of all or any portion of the balance to the credit of the distribution, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments, not less frequently than annually, made for the life or life expectancy of the distributee or the joint lives or joint life expectancies of the distributee and the distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under 26 U.S.C. § 401(a)(9); and the portion of any distribution that is not includable in gross income, determined without regard to the exclusion for net unrealized appreciation with respect to employer securities.  A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income; however, such portion may be paid only to an individual retirement account or annuity described in 26 U.S.C. § 408(a) or (b), or to a qualified defined contribution plan described in 26 U.S.C. § 401(a) or 403(a) that agrees to account separately for amounts so transferred, including accounting separately for the portion of such distribution which is includable in gross income and the portion of such distribution which is not includable.  The system shall accept member rollover contributions, direct rollovers of distributions made after December 31, 2011, or both, from the following types of plans: individual retirement accounts or annuities or plans qualified under 26 U.S.C. § 401(a) or 403(a), governmental deferred compensation arrangements defined in 26 U.S.C. § 457(b), or tax sheltered annuities or other arrangements under 26 U.S.C. § 403(b), beginning on the effective date specified; but only for the purposes of repaying prior distributions or purchasing service credits permitted under 26 U.S.C. § 415(k)(3) and 415(n).

E.  The board of trustees may adopt provisions of the system that carry out the requirements of Subsections B, C, and D of this Section, and the board of trustees may adopt provisions as required to maintain the qualified status of the system under 26 U.S.C. § 401(a).

Added by Acts 1956, No. 56, §5(6); Redesignated from La. Rev. Stat. 16:1046 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 2012, No. 523, §1, eff. Jan. 1, 2013.