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1. Who is eligible for membership in LSERS?
Membership in the Louisiana School Employees' Retirement System (LSERS) is mandatory for non-instructional individuals employed by a Louisiana parish or city school board in the following positions: school bus drivers, janitors, custodian workers, maintenance workers, bus aides, attendants/monitors or any other regular school employee who actually works on a school bus helping with the transportation of school children. Employees must work more than 20 hours
per week to qualify as a member of LSERS. Refer to Fact Sheet 2 - LSERS Membership.
2. What is the retirement contribution rate that is taken out of my paycheck every payday?
LSERS members contribute a percentage of their salary to the retirement system. LSERS invests these funds and earns income through a broad and diversified portfolio of investments. The contributions and investment earnings are used to pay retirement benefits to retirees and beneficiaries and to provide for the operating expenses of the system. The current member contribution rate is 7.5% or 8.0%, if enrolled on or after July 1, 2010. See Member and Employer Contribution Rates
on LSERS’ website.
3. Are my LSERS contributions and retirement benefits community property?
Yes, member contributions and retirement benefits are considered community property in Louisiana. You should consult with an attorney for questions concerning the effect of divorce, remarriage, property settlements, etc., on the refund of your retirement contributions or payment of your retirement benefits.>/p>
Note: If a legally married member selects a retirement option that does not leave his/her spouse at least 50% of his/her pension the spouse must sign a spousal consent form stating that he/she is aware of this decision. This form is provided during the refund or retirement application process. Refer to Fact Sheet 10 - Benefit Options and Fact Sheet 12 - Regular Service Retirement.
4. What will my spouse receive if I die before I retire?
Survivor benefits may be paid to your surviving spouse and/or minor child and/or your physically disabled or mentally handicapped child if you have at least 5 years of service credit at the time of your death. Refer to Fact Sheet 17 - Survivor Benefits
for more information. If you have less than five years of service in LSERS, member contributions are refunded to the named beneficiary(ies).
5. What is a member statement?
A member statement is an annual statement that includes your total years of service credit, total contributions as a LSERS member, and the name of your designated beneficiary. The statement includes all of your credit in the retirement system through June 30th of the previous fiscal year. You should contact LSERS immediately, in writing, if there are any discrepancies on the member statement. Correcting this information in advance will help LSERS and you with processing your long-awaited and well-deserved retirement in a timely manner.
6. What if I quit before I become eligible to retire?
You are entitled to a “refund” of your contributions after a 90-day waiting period.
If you have at least 10 years of service (at least 5 years if enrolled in LSERS 7/1/10 or after) and decide to quit work; you are allowed to leave your contributions with LSERS and draw a benefit at age 60.
If you have at least 25 years of service; you are allowed to draw a benefit at age 55.
You should note that if you have at least 5 years of service credit with LSERS you may choose to stay in LSERS if you move to a job covered by either the Louisiana State Employees’ Retirement System (LASERS) or the Teachers’ Retirement System of Louisiana (TRSL). This includes positions that do not normally qualify a person for membership in LSERS. Refer to Fact Sheet 7 - Refunds & Vested Retirement.
7. What happens if I become disabled before retirement?
- You may qualify for disability benefits if you become totally and permanently disabled and are no longer able to perform your current job.
- To qualify for a disability benefit you must be an active contributing member and have at least 10 years of service credit or 5 years if enrolled before July 1, 2006. Service credit earned while you were receiving Workers’ Compensation cannot be used to meet the minimum requirement. Also, service credit earned while on extended sick leave may not be used to meet the minimum requirement.
- You must be certified as permanently disabled by the Louisiana State Medical Disability Board.
- You can obtain a packet containing disability retirement forms from your employer. It will include forms to be completed by you, your supervisor, your employer, and your physicians.
Refer to Fact Sheet 16 - Disability Retirement for more information about disability.
8. Can I purchase credit from another system?
There are several ways to transfer service credit between systems: reciprocal agreements, actuarial transfers, and reverse transfers. Members may also purchase time for refunded service, military service, or substitute employee time. Certain restrictions and costs may apply to your particular situation. You should contact LSERS for a more detailed explanation. Refer to Fact Sheet 6 - Purchase of Credit.
9. What should I do to start preparing for retirement?
Here are some helpful suggestions for planning your "Road to Retirement." Refer to Fact Sheet 12 – Regular Service Retirement and Fact Sheet 10 – Benefit Options.
Three Years to Go...
- Understand your pension options. What are the economic, tax, and estate planning results for each retirement plan available to you?
- Request an estimate of your monthly retirement benefit under the plans you are considering. Requests for estimates are now available on LSERSWeb.
- Create a preliminary retirement budget. This will guide your decision-making process.
One Year to Go...
- Make sure you have a social security card and birth certificate or other proofs of age for you and your beneficiary(ies).
- Review your life insurance. Figure out what you will need and can afford.
- Check home and auto insurance. Are you adequately protected?
- Begin to think about which benefit option will be best for you.
- Attend an LSERS seminar or view a webinar.
- Request an estimate of benefits from LSERS.
Refer to Fact Sheet 4 - Checklist for Retirement/DROP for more information.
10. What documents will I need to retire and how do I start the retirement process?
Contact your employer to complete the retirement application. Your employer should mail the retirement application to LSERS. The application can be submitted up to 6 months prior to the effective date of retirement. LSERS will send you and your employer a letter acknowledging receipt of the application and requesting any additional information needed to process your retirement.
LSERS must have a copy of your Social Security card and birth certificate. At least two(2) of the following documents will be accepted if a birth certificate cannot be provided:
|| U.S. passport
|| Baptismal certificate
|| Voter registration card
|| Marriage license (if age is indicated)
|| Military records
|| School records
You must apply for a birth certificate from the state in which you were born if the date of birth cannot be determined from these records. Proof of age and a copy of their Social Security card are also required for all beneficiaries. Refer to Fact Sheet 8 – Retirement Application Process.
11. What are my options after DROP?
- You may continue working and begin contributing to retirement again and begin accruing additional service credit.
- You are eligible to withdraw funds from your DROP account after you retired.
- You cannot receive any funds from your DROP account until your monthly retirement benefit has been processed.
- You do not have to begin withdrawing your DROP funds immediately. You have one year from your retirement date before you must make a decision regarding your DROP funds. At that time you have several options from which to choose. You can:
- Withdraw your funds in a lump sum or
- Withdraw your funds in a partial lump sum or
- Withdraw your funds monthly, quarterly, semi-annually, annually or
- Choose a direct rollover of your funds to an IRA or other qualified retirement plan.
Important Information on Taxes:
- We are required to withhold 20% for federal income tax purposes if you withdraw your funds from the system in one lump sum or withdraw your money over a period of time that is less than 10 years.
- If you choose the direct rollover, your funds are not taxed at that time; however, you will owe taxes when you withdraw the money from your IRA or other qualified retirement plan.
- You must include the funds that you withdraw from your DROP account as taxable income for federal income tax purposes.
- You will also be subject to a 10% penalty when you file your tax return if you are under age 55 when you begin withdrawals from your DROP account.
Refer to Fact Sheet 13 - DROP.
12. How long will it take before I receive my first retirement check?
Your Regular Service Retirement, Early Service Retirement, or IBRP estimated benefit can be received as early as the 1st of the month following your retirement date provided your properly completed Estimated Affidavit and Direct Deposit forms have been received by LSERS.
At the end of your DROP participation or at the end of your employment after DROP your estimated benefit will begin the first of the month following your termination date provided a properly completed Form 10DRC - After-DROP Notification and Form 8 - Authorization for Direct Deposit are received by LSERS. Refer to Fact Sheet 8 – Retirement Application Process.
13. Can I have my retirement check deposited directly into my checking or savings account?
Yes, direct deposit of your LSERS retirement check is mandatory for all members after July 1, 2010. You may request the Authorization for Direct Deposit form from our office or go to our website and download Form 8 - Authorization for Direct Deposit
. With electronic funds transfer, also known as direct deposit, your monthly retirement benefit will be wired into your account on the first of every month (or the first working day when the first of the month falls on a weekend or holiday). Refer to Fact Sheet 9 – Electronic Direct Deposit.
14. When are Retiree, IBRP, and DROP checks mailed?
- Retiree checks are mailed one business day before the first of each month.
- DROP, DROP-LA, IBRP and IBRP-LA checks are mailed one business day before the fifth of each month.
- Please contact LSERS if you have not received your check by the 7th business day after your check date.
15. What are Permanent Benefit Increases (PBI) and when are they granted to retirees?
A PBI is a cost-of-living adjustment (COLA) that is a permanent benefit increase granted to eligible retirees and beneficiaries upon recommendation by the LSERS Board of Trustees and approved by the Legislature when funding is available.
16. Are there any restrictions on returning to work after I retire?
Yes. An LSERS service retiree can return-to-work as a retiree and receive both his retirement benefit and salary from his employer if his earnings during the fiscal year (July 1 - June 30) are less than 50% of his final average compensation (FAC). If the retiree earns more than 50% of his FAC, he must repay LSERS every $1 earned over the 50% limit. The employer can rehire a retiree under the earnings limit provisions at any time. Another return-to-work provision allows an employee to rehire a full-time bus driver who has been retired for 12 months if there is a certified shortage of qualified dirvers. Under the full-time bus driver provision, the retiree can receive both full retirement and salary from his employer. The retiree pays contributions into LSERS while working as a full-time bus driver and those contributions are refunded to the retiree upon termination of employment. Refer to Fact Sheet 18 - Retirees Who Return to Work.
17. What happens to my insurance coverage after I retire?
18. Will Social Security reduce my benefit because I am receiving a state pension?
LSERS will not reduce its benefit to you because you are receiving a benefit from the Social Security Administration (SSA). However, SSA may reduce your benefit because you are receiving a state pension. SSA uses two formulas to determine the reduction: one is based on your spouse’s work record documented with SSA (GPO - Government Pension Offset) and the other is based on your own work record documented with SSA (WEP – Windfall Elimination Provision).
All Social Security benefit reduction amounts must be computed by SSA. LSERS representatives cannot provide this information to our members. Contact the Social Security Administration at 1.800.772.1213 between the hours of 7:00 a.m. and 7:00 p.m or your state local SSA office or visit their website at www. Ssa.gov for more information on any of the reductions mentioned above. Refer to Fact Sheet 19 - Social Security and You