EXTREMELY IMPORTANT

Refund Eligibility

For a member to be eligible to receive a refund, the member must have terminated employment in the sheriff’s office and be out of service for at least 30 days.  Following are examples of members who are not eligible to receive a refund:

• Members who terminate employment in one parish and transfer to another parish

• Members who “terminate” employment in a sheriff’s office, receive a refund and return to work in the same office

• Members who terminate employment, knowing they will be rehired by the same or another sheriff’s office and who soon return to employment

These members are not eligible for a refund because LA RS 11:2175C intends that the 30-day waiting period is to provide sufficient time for the sheriff’s office to forward refund information and the Pension Fund office to process the refund application.  It is not intended to be a vehicle for members to terminate, stay out 30 days to receive a refund and then return to employment.

More importantly, as a retirement system qualified under Internal Revenue Code Section 401(a), the Pension Fund can lose its qualification if it is determined that we are refunding members who leave anticipating reemployment or who know they are transferring to another parish.  This is known as an “in-service distribution.”

If we were disqualified, two of the most negative results would be that we could not tax-shelter employee contributions and members’ benefits would become taxable income to them as soon as they become vested.  These two outcomes, particularly the taxation of benefits prior to retirement, would be catastrophic for our members and the Fund.

For these reasons, the sheriffs’ offices need to closely monitor requests for refunds to be sure that only eligible members are requesting refunds.

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Last modified: May 08, 2009