§2259. Optional allowances

A.(1) With the provision that no optional selection shall be effective in case a beneficiary dies within thirty days after retirement and that such a beneficiary shall be considered as an active member at the time of death, until the first payment on account of any benefit becomes due, any member may elect to receive his benefit in a retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent at the time of his retirement allowance in a reduced allowance payable throughout life, with the provision that:

Option 1. If he dies before he has received in member's annuity payments the present value of his member's annuity as it was at the time of his retirement, the balance shall be paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees; or

Option 2. Upon his death, his reduced retirement allowance shall be continued throughout the life and paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees at the time of his retirement; or

Option 3. Upon his death, one-half of his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees at the time of his retirement; or

Option 4. Some other benefit or benefits shall be payable to any or all of the following persons: the member, the member's spouse, the member's child or children with a permanent mental or physical disability, or the member's dependent minor child or children as he shall nominate, provided such other benefit or benefits, together with the reduced retirement allowance, shall be certified by the actuary to be of equivalent value to his retirement allowance and approved by the board of trustees.

(2) The nomination made pursuant to Option 2, Option 3, or Option 4 as provided in this Subsection is irrevocable on and after the date that the first of any benefit payments becomes due.

(3) For the purposes of this Subsection, the term "person" includes a trust as provided in R.S. 11:2256.2.

B. However, should the member be single at the time of retirement and after retirement become married, the retiree may select an option for his new spouse, provided the member and the spouse have been married for a period of twelve months prior to selection of the option. The benefit paid to the member who selects a different option under this Subsection shall be actuarially equivalent to the benefit payable immediately prior to the election.

C. Initial benefit option. (1) The initial benefit option provided in this Subsection is available to a member who has not participated in the Deferred Retirement Option Plan provided in this Chapter and who selects the maximum benefit provided in Subsection A (introductory paragraph) of this Section, or Option 2, 3, or 4 thereof and, if this initial benefit option is selected, the person shall thereafter be ineligible to participate in the Deferred Retirement Option Plan under this Chapter.

(2) If a member selects the initial benefit option provided in this Subsection, the member may receive an initial benefit plus a reduced monthly retirement allowance, provided the initial benefit together with the reduced monthly retirement allowance shall equal the actuarially equivalent amount of his maximum retirement allowance.

(3) The initial benefit, as determined by the member, shall not exceed an amount equal to thirty-six payments of the member's maximum retirement allowance.

(4) At the option of the member, the initial benefit shall be paid as a lump-sum payment or shall be placed in an account called an "initial benefit account", established in accordance with the same procedures set forth in R.S. 11:2257, with interest credited thereto and monthly payments made from the account in accordance therewith.

(5) The monthly retirement benefit received by the retiree and the beneficiary or survivor shall be based on the amount otherwise payable under the retirement option selected by the member, which shall be actuarially reduced by a prorated amount calculated to offset the cost of the initial benefit payment.

(6) If a change in option selection is allowed under the provisions of Subsection B of this Section, the monthly benefit payable under those provisions shall be actuarially reduced by a prorated amount calculated to offset the cost of the initial benefit payment.

(7) A person who retires under the provisions of disability retirement may not select the initial benefit option.

(8) Cost-of-living adjustments granted by the board of trustees to retirees who select the initial benefit option shall be computed on the basis of each retiree's regular monthly retirement benefit or on the basis of each beneficiary or survivor's benefit based on the option selected as reduced and shall not be computed on the initial benefit received either as a lump sum or paid pursuant to R.S. 11:2257.

Added by Acts 1979, No. 434, §1; Redesignated from R.S. 33:2157 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1997, No. 356, §1, eff. July 1, 1997; Acts 1999, No. 354, §1, eff. June 16, 1999; Acts 2006, No. 682, §1, eff. June 29, 2006; Acts 2012, No. 427, §1; Acts 2014, No. 811, §4, eff. June 23, 2014; Acts 2017, No. 21, §1, eff. June 3, 2017.

NOTE: Acts 2014, No. 811 changed terminology referring to persons with disabilities throughout the La. Revised Statutes and codes of law, and included a listing of terms that were deleted and their respective successor terms (See Acts 2014, No. 811, §36). The Act provides that it is not the intent of the legislature that changes in terminology effected therein alter or affect in any way the substance, interpretation, or application of any law or administrative rule; further provides that nothing in the Act shall be construed to expand or diminish any right of or benefit for any person provided by any law or administrative rule (See Acts 2014, No. 811, §35(C) and (D)).