In a 30-4 vote, the Louisiana Senate on Wednesday voted to endorse a bill aimed at beginning a phase out of the Deferred Retirement Option Plan(DROP)for members of the Louisiana State Employees' Retirement System (LASERS), the Teachers' Retirement System of Louisiana (TRSL) and the Louisiana School Employees' Retirement System (LSERS).
SB 602 by Senator Butch Gautreaux of Morgan City was amended on the Senate floor to change a provision in the original proposal that provided that no member of the above systems who has less than ten years of creditable service on July 1, 2010 will be permitted to participate in DROP. The amendment changes that requirement by saying that no member of the systems hired after July 1, 2010 will be permitted to participate in DROP.
The DROP provisions provide that a participant "freeze" his or her retirement accruals as of the date he or she enters DROP. During participation in DROP, a member continues working and receiving a salary, and the employee's calculated retirement benefit is deposited into a trust fund. Maximum time for participation by an eligible employee is three years.The LASERS Board of Trustees is neutral on the plan, pointing out that DROP is cost neutral to its system.
The measure now heads to the House Retirement Committee for review.