§ 1:271.2. Supplemental funding of DROP accounts; member subject to early distribution penalty on contracted date of retirement.

A.

Eligibility for the application of this section is limited to those members who are electing participation in DROP and are scheduled to be subject to penalty on early distributions from qualified plans under Section 72(t) of the Internal Revenue Code on the contracted date of retirement.

B.

In addition to funding deferred retirement option plan (DROP) accounts pursuant to section 1:271, those members eligible under subsection A of this section shall have the option, to be made not less than thirty (30) days nor more than ninety (90) days prior to termination of employment, to irrevocably contract to have (1) any severance pay or compensatory time payable by an employer funded directly to the retirement system for credit to the eligible member's account, and/or (2) any separation benefits payable by the retirement system funded directly to the eligible member's account, all funding to occur immediately upon termination of employment.

C.

If a member who has contracted amounts payable under this section into his DROP account dies prior to termination of employment, the election shall be voidable at the option of the member's named beneficiary. In the event multiple beneficiaries have been designated, all must agree on the disposition of the affected funds, or the election shall be void.

D.

Limitations relative to vacation time, sick leave, or compensatory time as allowed by the city-parish shall be used for purposes of this section in those cases where limitations for an employer are greater than those of the city-parish. In such cases, the employer shall certify compliance with the applicable city-parish limitations.

E.

This section shall not apply to a member who (1) elects funding of amounts payable under this section to an eligible deferred compensation plan, or (2) is subject to a community property settlement or court order which is dispositive of any amounts payable under this section.

F.

The administration of this section shall be subject to any provision of the Internal Revenue Code which would mandate limitation on its operation.

G.

The provisions of this section shall be effective May 1, 2001.

(Ord. No. 12005, § 2, 4-25-01; Ord. No. 16039, § 1, 8-12-15)