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Major changes to the Optional Retirement Plan (ORP) signed into law
The 2024 regular legislative session that kicked off in March is drawing to a close with big changes already signed into law for the Optional Retirement Plan (ORP) and return-to-work (RTW) provisions.
We will roll out ORP and RTW fact sheets and webinars this month to quickly get you up to speed on the changes. For now, keep reading for a snapshot of where things stand as the June 3 end of the legislative session approaches.
New ORP law creates transfer window
Act 109 (Rep. Frieberg) provides a window for active, contributing Optional Retirement Plan (ORP) participants to make a one-time, irrevocable decision to join the TRSL defined benefit plan as new members. Depending on when their ORP eligibility began, ORP participants will have a window of at least a year to join the TRSL defined benefit plan.
A few important caveats:
- The new law goes into effect on June 30, 2024.
- The new law does not authorize the purchase of service credit for time in which the member participated in the ORP.
- Beginning July 1, 2026, the ORP administrative fee will be paid by participants and employers with the participant share capped at 0.05% of salary (the current rate).
- The election to join the TRSL defined benefit plan is irrevocable and members will not be allowed to re-enter the ORP.
- ORP participants who elect to join the TRSL defined benefit plan will enter as new members in the 2015 plan and begin earning service credit prospectively from the date of enrollment in the defined benefit plan.
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1-year window: Who’s eligible?
- Current ORP participants whose first ORP-eligible employment occurred before August 1, 2020; and
- Who are active and contributing as of June 30, 2024
Note: Must be eligible for TRSL participation at the time of the election
Option deadline:
- Have until June 30, 2025, to make a one-time, irrevocable election to join the TRSL defined benefit plan as a new member in the 2015 plan.
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5-year window: Who's eligible?
- ORP participants whose first ORP-eligible employment began on or after August 1, 2020; and
- Who are active and contributing at the time of the election
Note: Must be eligible for TRSL participation at the time of the election
Option deadline:
- Can make a one-time, irrevocable choice to join the TRSL defined benefit plan as a new member in the 2015 plan at any time within five years of their first ORP-eligible employment
- Example: Someone who became eligible for the ORP in August 2020 would have 13 months from June 30, 2024, to join the TRSL-defined benefit plan.
Return-to-work (RTW) changes create additional opportunities for TRSL retirees
Act 394 (Rep. Riser): This bill was adopted as a substitute for House Bill 35, also by Rep. Riser.
Act 394 adds critical shortage provisions in the RTW law for retirees who retired on or after July 1, 2020. It also expands critical shortage provisions to allow for part-time reemployment in certain positions for all retirees.
2010 RTW Law (for retirees who retired before July 1, 2020): Allows these retirees to return to work part-time in certain critical shortage positions (as listed in Index 15.1 of the Employer Procedures Manual) without a suspension or reduction in retirement benefits. Under current law, retirees reemployed in these critical shortage positions must work full-time to avoid impacting their benefits.
2020 RTW Law (for retirees who retired on or after July 1, 2020): Adds a critical shortage provision to the law that, after a 12-month waiting period, allows these retirees to return to work:
- Full-time/Part-time: PreK-12 classroom teacher (in a specific subject area), or
- Full-time/Part-time: In certain critical shortage positions (same as referenced above) without a suspension or reduction in retirement benefits if they are directly reemployed by a TRSL-reporting employer.
- [NOTE: Those reemployed by contract or corporate contract, such as a staffing agency, will continue to have their benefits suspended for the duration of their reemployment.]
Other bills:
Act 46 (Sen. Price): Adds clarifying language in the law related to employer contributions eligible for transfer to another Louisiana public retirement system when a member requests to transfer their service credit to another system in which they become eligible for membership.
House Bill 782 (Rep. McFarland): Would make a supplemental appropriation of $23.6 million to the TRSL initial unfunded accrued liability (IUAL) from a portion of the FY 2022-23 surplus funds in the state treasury as required by the State Constitution. The bill also appropriates $1.03 million from a statutory dedication to the TRSL IUAL.
House Concurrent Resolution No. 20 (Rep. M. Johnson): Asks Congress to review the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) Social Security benefit reductions and to eliminate or reduce them by supporting H.R. 82 and S. 597 of the 118th Congress and all similar purposed legislation.
The best way to stay informed about legislation impacting TRSL is to sign up for our legislative updates via email. Sign up for TRSL eNews here and select “Legislation” under topics of interest.
You can also bookmark our Legislation page in your browser. We post status updates whenever action is taken on a bill affecting TRSL.
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The end of the school year means the end of the fiscal year is also approaching. A number of reporting tasks need to be completed, but you can tackle them with ease. We’ve included tip sheets packed with useful information for each TRSL reporting requirement.
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| Access tip sheets below for each category.
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Available on demand: 2024 Annual Employer Training
Thank you to everyone who attended the 2024 Annual Employer Training. From taking a spin through EMIS to creating a checklist for a member’s retirement, we covered a lot of important ground.
If you weren’t able to join us, you can still tune in through TRSL’s YouTube Channel. The recordings are available on demand:
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New employer contribution rates take effect July 1
The FY 2024-25 employer contribution rates for the Defined Benefit Plan and the Optional Retirement Plan (ORP) go into effect July 1, 2024. As we’ve previously reported to you, the employer contribution rate will drop for the sixth consecutive year.
Here’s what you need to do: Please make sure to update your payroll systems with the correct applicable rate(s) for FY 2024-25 reporting. The rates are posted online.
Questions? Contact Ed Branagan at 225-925-4846, or, toll-free outside of the Baton Rouge calling area, at 1-877-275-8775.
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Sharon Lachney has been part of TRSL’s employer training team for nearly 10 years, helping employers with questionable year reports and sick leave data. But now, she has stepped into a new role as Retirement Benefits Supervisor where she supervises Employer Audit/Special Projects.
More about Sharon
Tenure at TRSL: 25 years, 10 months, and counting!
Tenure with the Employer Services Department (ESD): 9 years, 8 months (being precise is kind of my thing!)
Job duties:
- I supervise the Employer Audit/Special Projects section of the Employer Services Department at TRSL
Sharon’s favorite part of the job:
- Supervising and working with an awesome group of analysts/specialists whose TRSL experience level ranges from “fairly new and eager to learn” to “uber-experienced and talented”
- This section is responsible for a variety of work processes, including auditing member records for accuracy, and a host of special projects related to service credit issues and monthly salary reporting from over 200 TRSL reporting agencies. It’s always challenging and keeps me engaged.
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A fun fact about Sharon: I am often recognized at my local Wal-Mart as the lady who is ALWAYS walking her adorable toy poodle, Coco, in my neighborhood. On the weekends, we walk as much as three times a day! Cue the cute pet photo!
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