La. Admin. Code tit. 58 § III-509

Current through Register Vol. 50, No. 11, November 20, 2024

Section III-509 - Withdrawal of Funds from a DROP Account

A. Withdrawals from a DROP account may begin after the first regular retirement benefit has been issued. Withdrawals from a DROP account are not permitted prior to the termination of DROP participation or during employment which continues immediately following the DROP participation period and shall be limited to the following methods:

1. withdrawal of the total DROP account balance at the termination of DROP participation and employment;

2. monthly withdrawals in an amount to be determined by the life expectancy of the participant. This periodic payment shall not vary from month to month (refer to §511 A);

3. monthly withdrawals based upon an amount to be withdrawn each month, as specified by the participant. This periodic payment shall not vary from month to month, and the amount of the withdrawal must be greater than the amount necessary to liquidate the total account balance within the participant's life expectancy (refer to §511 A);

4. annual withdrawals in an amount to be determined by the life expectancy of the participant. This periodic payment shall not vary from year to year. The participant shall select the month in which the annual payment is to be made, and the first payment must be made within the 12-month period immediately following DROP participation and termination of employment (refer to §511 A);

5. annual withdrawals based upon an amount to be withdrawn each year, as specified by the participant. This periodic payment shall not vary from year to year, and the amount of the withdrawal must be greater than the amount necessary to liquidate the total account balance within the participant's life expectancy. The participant shall select the month in which the annual payment is to be made, and the first payment must be made within the 12-month period immediately following DROP participation and termination of employment (refer to §511 A); and

a. one-time partial account balance withdrawal at the beginning of, or during the term of, monthly or annual withdrawals selected in accordance with §509.A 2, 3, 4, or 5. If the one-time partial account balance withdrawal is made before any other withdrawals, the balance of the account will be paid as determined by the withdrawal method selected in accordance with §509.A 2, 3, 4, or 5. If withdrawals have already begun, the duration of the remaining monthly and or annual withdrawals will be redetermined and the appropriate federal tax laws will be applied. If the one-time partial account balance withdrawal is to be made after the monthly or annual withdrawals have begun, the retiree must meet one of the following conditions:

i. participant must have been at least age 55 in the year of participant's retirement; or

ii. participant must be at least 59 1/2 at the time participant chooses the one-time single lump sum withdrawal;

b. changes to the monthly or annual withdrawals may only be made in accordance §511 A;

c. if a member is 72 or older when he chooses a partial single sum after withdrawals have begun, even though he retired at a younger age, he will have the required minimum distribution calculated using the "Single Life Table" (SLT), or he may choose the "Uniform Lifetime Table" (ULT), or the "Joint and Last Survivor Table" (JLST), whichever applies. The result of using one of these tables may allow a member to lower his monthly or annual withdrawal;

7. total DROP account balance withdrawal at any time after monthly or annual withdrawals have begun.

B. Selection of the withdrawal method and the amount of the periodic payment must be complete, correct, and on the form prescribed by TRSL. The correctly completed prescribed TRSL form should be received by TRSL 30 days prior to the disbursement, but no later than 8 business days prior to disbursement. Members under age 72 in the year of retirement must begin withdrawals within 12 months of the date of retirement. Members age 72 or older in the year of retirement must begin withdrawals by April 1 of the calendar year following the date of retirement or 12 months after retirement, whichever is earlier.

La. Admin. Code tit. 58, § III-509

Promulgated by the Department of the Treasury, Board of Trustees of the Teachers' Retirement System of Louisiana, LR 18:621 (June 1992), repromulgated LR 24:501 (March 1998), amended LR 28:1031 (May 2002), LR 28:2569 (December 2002), Amended LR 461242 (9/1/2020).

AUTHORITY NOTE: Promulgated in accordance with R.S. 11:826.