§1659. Funding deposit account

A.(1) There shall be established a funding deposit account for the system. The account shall be credited and charged as provided in this Section.

(2) Notwithstanding any provision of law to the contrary, for any fiscal year in which the board of trustees exercises the authority granted in R.S. 11:1658 to set the net direct employer contribution rate higher than the minimum recommended rate pursuant to R.S. 11:103, all surplus funds collected by the system shall be credited to the system's funding deposit account.

B. The funds in the account shall earn interest annually at the board-approved actuarial valuation interest rate, and the interest shall be credited to the account at least once a year.

C. The board of trustees may in any fiscal year direct that funds from the account be charged for the following purposes:

(1) To reduce the present value of future normal costs.

(2) To pay all or a portion of any future net direct employer contributions.

(3)(a) To provide for a cost-of-living adjustment, pursuant to applicable law.

(b) Notwithstanding the provisions of R.S. 11:243(G)(1), in order to exercise the authority to grant an increase pursuant to the provisions of Subparagraph (a) of this Paragraph, an increase shall satisfy the requirements of R.S. 11:243(G)(3).

D. In no event shall the funds charged from the account exceed the outstanding account balance.

E. If the board of trustees elects to charge funds from the funding deposit account pursuant to Paragraph (C)(2) of this Section, the percent reduction in the minimum recommended employer contribution rate otherwise applicable shall be determined by dividing the interest-adjusted value of the charges from the funding deposit account by the projected payroll for the fiscal year for which the contribution rate is to be reduced.

F. For funding purposes, any asset value utilized in the calculation of the actuarial value of assets of a system shall exclude the funding deposit account balance as of the asset determination date for the calculation.

G. For all purposes other than funding, the funds in the account shall be considered assets of the system.

H. Repealed by Acts 2017, No. 25, §1.

Acts 2015, No. 371, §1, eff. June 30, 2015; Acts 2017, No. 25, §1.