La. Admin. Code tit. 58 § III-1505

Current through Register Vol. 50, No. 9, September 20, 2024

Section III-1505 - Establishment of Plan

A. The plan sponsor and plan administrator intend that the plan conform to the Internal Revenue Code of 1986 requirements for favorable federal tax treatment under IRC §401(a) and is a governmental plan within the meaning of IRC §414(d), with employee contributions picked up under an arrangement consistent with IRC §414(h)(2) Therefore, the plan administrator will construe and interpret the plan to state provisions that conform to the requirements of IRC §401, as applicable to a governmental plan under IRC §414(d) When the Internal Revenue Code is amended through subsequent legislation, or interpreted through revenue rulings, the plan administrator will construe and interpret the plan as stating provisions consistent with such amendment of relevant law.

B. To the extent required for this plan to qualify under IRC §401(a), the provisions of this plan shall be construed, consistent with treasury reg. §1. 401-1(b)(1)(i), to provide:

1. a definite pre-determined formula for allocating contributions and a definite pre-determined formula for allocating investment earnings (and losses) among accounts;

2. periodic valuation of plan assets (including investment options) and trust assets at least once each year;

3. periodic valuation of accounts at least once each year; and

4. distribution of plan accounts after severance from employment or the occurrence of some event.

C. This Chapter states the provisions of an optional retirement plan for the classes of employees covered by R.S. 11:921 et seq. The purpose of the optional retirement plan is set out by R.S. 11:922. The provisions of R.S. 11:921 et seq., are incorporated as if fully set out in this Louisiana Administrative Code.

D. The plan is established and maintained with the intent that the plan conforms to the applicable requirements of the retirement system law. The provisions of the plan shall be interpreted whenever possible to state provisions that conform to the applicable requirements of the enabling statute. When the enabling statute is amended or interpreted through subsequent legislation or regulations or an attorney general opinion, the plan should be construed as stating provisions consistent with such amendment or interpretation of the applicable law. In the event of a conflict between the Louisiana Administrative Code and the enabling statute, the enabling statute will supersede.

E. Subject only to the Constitution of Louisiana, the Louisiana legislature has the right to amend the plan at any time. To the extent consistent with the retirement system law, the plan administrator has the right to amend the plan to implement applicable federal and state law at any time. Any amendment of the plan and trust shall not be effective to the extent that the amendment has the effect of causing any plan assets to be diverted to or inure to the benefit of the plan administrator, ORP provider, or any employer, or to be used for any purpose other than providing benefits to participants and beneficiaries and defraying reasonable expenses of administering the plan and trust.

F. The plan is established for the exclusive benefit of participants and their beneficiaries. Consistent with IRC §401(a)(2), no amount held under the plan will ever inure to the benefit of the plan sponsor, any employer, the plan administrator, the ORP provider or any successor of any of them, and all plan investments and amounts will be held for the exclusive purpose of providing benefits to the plan's participants and their beneficiaries. Notwithstanding anything in the plan to the contrary, plan assets shall not be used for or diverted to purposes other than for the exclusive benefit of participants, beneficiaries, and alternate payees before the satisfaction of all liabilities to participants, beneficiaries, and alternate payees, except that payment of taxes and administration expenses may be made from the plan assets as provided by the plan or permitted by applicable law.

G. Plan contributions are invested, at the direction of each participant, in one or more funding vehicles provided by ORP providers to participants under the plan. Required participant plan contributions are designated picked up so as not to be included in participants' gross income for federal income tax purposes as provided by IRC §414(h)(2)

H. At no time shall the plan assets be used for, or diverted to, any person other than for the exclusive benefit of the employees and their beneficiaries and defraying reasonable expenses of administering the plan, except that contributions made by the employer may be returned to the employer if the contribution was made due to a mistake of fact.

I. The plan, and all acts and decisions taken under it, is binding and conclusive, for all purposes, upon every participant, beneficiary, alternate payee, any person claiming through a participant or beneficiary or alternate payee, all other interested persons, and upon the personal representatives, executors, administrators, heirs, successors and assigns of any and all such persons. The plan shall not affect contracts or other dealings with a person who is not an interested person, unless a written agreement executed by that person expressly so provides.

J. For purposes of the IRC, the plan is a defined contribution money purchase retirement plan under IRC §401(a)

K. The plan is an individual account plan which provides for an individual account for each participant and for benefits based solely upon the amount of contributions, investment gains and losses, fees, and expenses allocated to the participant's account.

L. The United States Code provisions created by title I of the Employee Retirement Income Security Act of 1974 ("ERISA") do not apply to this plan.

M. The plan is a governmental plan within the meaning of 29 USC 1002(32) and IRC §414(d)

N. The Teachers' Retirement System of Louisiana as the plan administrator provides for the administration and maintenance of the ORP pursuant to R.S. 11:921 et seq. The plan administrator may delegate duties to ORP providers to the extent permitted by applicable law.

La. Admin. Code tit. 58, § III-1505

Promulgated by the Department of the Treasury, Board of Trustees of the Teachers' Retirement System of Louisiana, LR 402273 (11/1/2014).

AUTHORITY NOTE: Promulgated in accordance with R.S. 11:921-929.