Employers:
Act 337 of the 2020 Regular Session enacted La. R.S. 11:710.1 which made significant changes to the state’s return-to-work (RTW) law governing the Teachers’ Retirement System of Louisiana (TRSL). The new law establishes a separate set of RTW provisions for retirees who returned to work for the first time with a TRSL-reporting employer on or after July 1, 2020.
The original RTW provisions in La. R.S. 11:710 that were in effect prior to La. R.S. 11:710.1 remain in place for all retirees who returned to work for a TRSL-reporting employer before July 1, 2020 as well as retirees who retired on or before June 30, 2010. However, retirees subject to La. R.S. 11:710 can make an irrevocable election to be covered by the provisions of La. R.S. 11:710.1.
TRSL is updating its publications and materials to include all of the new RTW provisions of La. R.S. 11:710.1 and will be conducting webinars in July with detailed information about the changes. In advance of these webinars, we are providing all employers with a summary of the new law to provide notice of its provisions and guidance if you are considering hiring TRSL retirees for the upcoming school year.
Please remember that the state’s RTW laws only determine whether a TRSL retiree’s benefit will be impacted should they be re-employed. It does not direct who an employer can hire. Below is a summary of the changes you need to be aware of (click the image above to read the information in PDF).
WHO IS COVERED UNDER EACH RTW LAW?
Subject to La. R.S. 11:710 (2010 Group): Provisions in La. R.S. 11:710 now only apply to the following individuals:
- Retirees who retired and returned to work for a TRSL-reporting employer before July 1, 2020
- Retirees who retired on or before June 30, 2010 (grandfathered group), regardless of when they return to work
Subject to La. R.S. 11:710.1 (2020 Group): Provisions in La. R.S. 11:710.1 apply to the following individuals:
- Retirees who return to work for a TRSL-reporting employer for the first time on or after July 1, 2020
- Retirees in the 2010 Group (above) can make an irrevocable election to be covered by La. R.S. 11:710.1. Once this irrevocable election is made, the retiree will be subject to La. R.S. 11:710.1 for all future employment
WHAT ARE THE PROVISIONS FOR LA. R.S. 11:710.1 (2020 GROUP)?
Effective July 1, 2020 and thereafter, retirees in the 2020 Group who return to work for a TRSL-reporting employer must choose one of the following options with one option only available for full-time employment:
- Option 1: Retiree’s earnings are limited to 25% (per fiscal year) of the retiree’s final average compensation (FAC) from their original retirement with a suspension of benefit when earnings limit is reached and reduction of benefit to recover amounts over earnings limit. This provision differs from current law in two important ways: (1) the earnings limit is calculated on the retiree’s FAC, not their retirement benefit amount; and (2) Option 1 can be selected regardless of the position the retiree is filling, as long as the position is through direct employment.
- Option 2 (only available to full-time employees): Retiree’s benefit is suspended for the duration of re-employment. Retiree regains active membership in TRSL and service credit is earned during re-employment. Retiree will accrue a supplemental benefit. The supplemental benefit is calculated with the same formula used to determine the original benefit, utilizing service credit earned during re-employment under Option 2. The FAC utilized will depend on the length of re-employment. Once the retiree elects Option 2, a return to Option 1 is only allowed in limited circumstances.
- Employment by Contract or Corporate Contract: Retirees returning to work through any employment by contract or corporate contract will have their benefits suspended for the duration of re-employment. This includes contract or corporate contract work performed as a substitute teacher. Retirees, including substitute teachers, must be direct employees of the TRSL-reporting agency in order to choose Option 1 or 2 above.
