Retired Member FAQs
When will I get my first benefit check/payment?
Retirement benefit payments usually begin within 30 to 45 days after the effective date of your retirement. However, delays may occur if requested documentation is not received in a timely manner.
Will LASERS send me a retirement check stub every month if I receive an Electronic Funds Transfer (also called direct deposit)?
No, LASERS will not send a retirement check stub unless there is a change in your monthly retirement amount.
How are Pay Change Notices Reflected?
When the dollar amount of your gross or net benefit changes, LASERS will mail you a retirement payment stub noting the new amount. Any item that has changed is noted with an “*”. Details to compare the new amount to the old amount are available online through the self-service portal. Go to “Account” and then “Benefit Payment History” to select the payment that was changed.
I am a retiree. Are my retirement benefits taxable?
As a LASERS retiree, you are exempt from Louisiana state income taxes on your LASERS pension. However, you must file a Schedule “E” form with the Louisiana Department of Revenue (DOR).
Your retirement benefits are subject to federal taxes. When filling out your retirement paperwork with your Human Resources office, make sure you complete Form W-4P Withholding Certificate for Pension or Annuity Payments, indicating the amount of federal income taxes to be deducted from your retirement check.
Will LASERS send me something for my taxes?
Yes. A 1099 will be issued to you each year.
How do I get a verification of income letter?
You must send a request in writing to LASERS, P. O. Box 44213, Baton Rouge, LA or by fax to 225.935.2856 and a completed letter will be mailed or faxed to you according to your request.
How long does it take to receive an income verification letter?
Once a verification request is received, it usually is processed within 10 business days.
I have a credit union deduction from my retirement check. How can I stop it?
You must contact the credit union to have this deduction stopped; otherwise, it will continue to be deducted from your retirement check.
I have questions about my health insurance plan and premiums. Who should I contact?
You must contact the insurance carrier or your former employing agency for detailed health plan information.
I have questions about my life insurance policy. Who should I contact?
You must contact the insurance carrier or your former employing agency for detailed life insurance information.
How do I access my account information through myLASERS?
Click here to learn more about creating a myLASERS account.
What employment options are allowed for retirees?
Working in private industry or a government position not eligible for LASERS does not impact your LASERS benefit.
Working as a rehired retiree in a LASERS eligible position generally requires you to choose an option: (1) continue to receive your retirement benefit and earn up to 50% of your annual benefit, (2) for non DROP or IBO participants, regain membership in LASERS by repaying all benefits received since you retired plus interest at an actuarial rate, or (3) suspend your retirement benefit and have no limit on earnings. Your hiring agency must submit a form indicating your option choice within 45 days after you return to work.
For the exceptions to the rule about choosing an option and more details see the Re-employed Retirees chapter of the Member’s Guide to Retirement.
Cost-of-Living Adjustments (COLAs)
What is a cost-of-living adjustment?
A COLA, or permanent benefit increase, is an adjustment made to your retirement benefit in order to counteract the effects of inflation. COLAs are not automatic or guaranteed. COLAs are funded through excess investment earnings, which are earnings above the LASERS expected actuarial return, and above the hurdles that have been legislatively established to help reduce the debt owed to the System.
Read the National Association of State Retirement Administrators (NASRA) Brief, Cost-of-Living Adjustments, to learn more about the purpose of COLAs, the different types of COLAs offered by government retirement systems, and an overview of recent state changes to COLA provisions.
What must happen in order for a COLA to be granted to LASERS retirees?
Several criteria must be met before a COLA can be granted:
- The Experience Account, which receives excess investment returns, must have a balance sufficient to fund the COLA on an actuarial basis. The LASERS Board of Trustees may recommend a COLA to the legislative leadership when funds are available. Legislation to grant a COLA must receive at least a two-thirds vote of both the Louisiana House of Representatives and Louisiana State Senate. The legislation is subject to gubernatorial veto. (R.S. 11:542)
- To be eligible, regular retirees must be retired at least one year on the date the COLA is granted and must be at least age 60. These requirements were set by the Legislature in 2009. For survivors, the age 60 requirement is based on the age the retiree would have attained by the date the COLA is granted. There is no age requirement for disability retirees.
When did LASERS retirees last receive a COLA?*
A 1.5 percent COLA was granted July 1, 2016 for eligible retirees.
*Note: Governor John Bel Edwards signed Act 656 (SB 5), which authorized a one-time supplemental payment to over 45,000 eligible LASERS retirees and beneficiaries in the 2022 Regular Legislative Session. The one-time supplemental payments were issued to eligible retirees and beneficiaries on August 15, 2022. The legislation, sponsored by LASERS and Senate Retirement Committee Chair Ed Price, was crafted to provide some relief for the average rank-and-file retiree, as a Cost-of-Living Adjustment (COLA) had not been granted since 2016. Additional details of the one-time payment can be found here.
How is the amount of a COLA calculated?
Based on Act 399 of 2014, a COLA is subject to the following restrictions:
|System Funding||System Earns at Least 8.25%||System Earns ARR1But Not 8.25%||System Does Not Earn ARR|
|Less than 55%||None||None||None|
|At least 55% but less than 65%||Lesser of 1.5% or CPI-U2||Lesser of 1.5% or CPI-U||None|
|At least 65% but less than 75%||Lesser of 2% or CPI-U||Lesser of 2% or CPI-U||None|
|At least 75% but less than 80%||Lesser of 2.5% or CPI-U||Lesser of 2% or CPI-U||None|
|At least 80%||Lesser of3% or CPI-U||Lesser of 2% or CPI-U||Lesser of 2% or CPI-U|
1ARR is the Assumed Rate of Return for the System, currently 8.0 percent for the 12 month period ending June 30, 2019.
2CPI-U is the Consumer Price Index – Urban.
Legislation can change this process.
How many consecutive years can LASERS retirees go without receiving a COLA?
There is no limitation.
If a COLA is granted, is it retroactive to cover the years retirees did not receive one?
No, COLAs are not retroactive.
Are all of Louisiana’s retirement systems required to provide the same COLA at the same time?
Does the LASERS Board of Trustees support a COLA for retirees?
The LASERS Board of Trustees has identified the adoption of a reliable and dependable mechanism for the funding and granting of COLAs for eligible System retirees as a significant board issue.
Deferred Retirement Option Plan (DROP)
Why is the Deferred Retirement Option Plan (DROP) interest (on non-Self Directed Plans) so different than the current stock market returns?
The DROP interest rate is not a one year return or even a simple multi-year average. The rate is derived using an actuarial return calculation, one uses the last five years of returns, accounting for realized and unrealized gains and losses. LASERS is a globally diversified plan, investing in equities, fixed income, and alternative assets worldwide. The plan returns and risk reflect this diversification. Recent outperformance in the US stock market has been highly unusual, and will differ from the returns in a broadly diversified portfolio such as LASERS.
How are DROP interest rates determined for accounts held at LASERS?
If you entered DROP based on a retirement eligibility date prior to January 1, 2004, you may still have your DROP account held at LASERS. Those accounts earn interest based on the investment returns earned by LASERS, but those returns are “smoothed” over a five year period. This smoothed earnings rate is then subtracted by 0.50% (for administrative expenses) to determine the interest credited to the members’ DROP accounts.
“Smoothing” mitigates volatility in the short-term market fluctuations. Gains and losses are recognized in twenty percent increments over a five year period, subject to corridor limits which avoid outlying returns. Typically, the amount of a gain or loss is recognized 20% in the first year, 40% in the second year, 60% in the third year, and 80% in the fourth year.
What do we need to know about the options for money in DROP Accounts?
Funds in DROP accounts may not be accessed until after a member terminates state service. This rule applies to accounts held at LASERS and accounts held at Empower in the Self-Directed Plan.
DROP account funds held at LASERS may be withdrawn at the retiree’s discretion, subject to IRS rules about required minimum distributions. However, there is nothing that can be done with those funds until withdrawal, other than allowing them to earn interest based on the LASERS investment earnings.
DROP account funds held at Empower may be invested in a wide variety of fixed investment options and mutual funds from asset classes with different holdings, management styles, and risk factors, including a stable value fund designed to avoid investment losses. Empower has investment professionals available to help members with investment decisions.
DROP account funds withdrawn from LASERS or Empower are subject to federal taxes, but are exempt from Louisiana state taxes. However, if DROP account funds are rolled over from a LASERS or an Empower DROP account to another financial provider, the Louisiana state income tax exemption is lost.
How does DROP work for Members currently in the plan?
When you are in the DROP participation period, you no longer pay contributions to LASERS. No service credit is earned during the participation period.
The amount that you would receive as a retirement benefit is deposited to your DROP account each month during the participation period, which is a maximum of 36 months.
You continue to earn sick and annual leave while in DROP.
DROP funds may not be accessed until state service is terminated.
Are online withdrawals allowed from DROP accounts?
LASERS does not currently allow withdrawals to be made online from DROP accounts. It is a feature being explored for the future.
You can visit our website and obtain the necessary form to complete for a DROP withdrawal. On the LASERS website, go to Forms at the top of the screen, Select Member Forms; under DROP/IBO choose the form 09-03 Request for Withdrawal from DROP-IBO. The completed form may be faxed to 225-935-2856 or mailed to P. O. Box 44213, Baton Rouge, LA 70804.
Online withdrawals are allowed from Empower accounts. Contact Empower directly to withdraw your self-directed DROP or IBO money.
What happens if you work after DROP?
You may choose to continue working after DROP participation ends. If so, contributions to LASERS resume and service credit toward a supplemental benefit is earned. Deposits to the DROP account cease. The DROP account may not be accessed until employment is terminated.
When you terminate employment, you will begin receiving a monthly retirement benefit, including the supplemental benefit for the time you worked after DROP. The final average compensation used to calculate a supplemental benefit depends on your plan and how long you work. For details, see the Deferred Retirement Option Plan chapter in the Member’s Guide to Retirement.
When are 1099-Rs available?
1099-Rs are mailed by LASERS each year by January 31, as required by IRS regulations. The 60,000 or so 1099s generated by LASERS each year are the result of extensive testing and verification, which takes significant staff hours. Given our staffing levels it would be difficult to mail 1099s much earlier than January 31.
1099-Rs are available in myLASERS at the same time they are mailed.
What is the significance of Box 5 on Form 1099-R?
The amount in Box 5 of the 1099-R is the difference between Box 1, “Gross Distribution” and Box 2a “Taxable Amount.” It equals after-tax employee contributions that are recovered tax free during the tax year. After-tax employee contributions are often used when a member purchases service.
Why did I receive two 1099-R forms?
Multiple 1099-R forms are required if you receive more than one “type” of distribution as defined by the IRS regulations or if you receive payments for more than one “Payee Type” (i.e. Retiree, DROP, Beneficiary, Survivor, Alternate Payee). The IRS 1099-R Distribution codes (from Box 7 of the 1099-R form) are explained below:
Taxpayer/Payee is younger than 59½ and the distribution is:
- A distribution after separation from service in or after the year the taxpayer has reached age 55.
- A distribution to a public safety officer after separation from service in or after the year the taxpayer has reached age 50.
- A distribution that is part of a series of substantially equal payments.
- Includes QDRO’s/Alternate Payees
|2||Taxpayer/Payee is younger than 59½
and the distribution is:
• A distribution after separation from
• A distribution to a public safety officer
• A distribution that is part of a series
• Includes QDRO’s/Alternate Payees
|3||Any Taxpayer/Payee with a disability status|
|4||For survivors, beneficiaries, estates, or trusts.
(Death of Member)
|4G||Rollover – Survivor, Beneficiary, or Trust|
|7||Taxpayer/Payee older than or equal to 59½.
(A person must be 59½
at the time of distribution,
else code 2) Includes QDRO’s/Alternate Payees
|G||Rollover for Refunds, Lump Sum Withdrawals,
and Leave Balance Withdrawals
I turned age 59½ in 20xx. How does that affect my 1099-R?
You may receive two 1099-R forms in the year that you turn 59½. One will be coded distribution code “2” and the other code “7.”
Example: John Henry received a LASERS benefit each month in 2013. He turned 59½ in May. He will receive two different 1099-R forms. For January through May, his payments were classified as an early distribution code “2”per IRS rules. Once he reached age 59½ his payments became classified as a normal/regular distribution code “7.” Although the amount he received each month did not change, the “type” of benefit being paid did change from an early distribution to a normal retirement benefit because of his age. Next year, John will receive a single 1099-R covering all 12 months for a normal retirement benefit distribution code “7.”
I switched from Disability to Regular Retirement in 20xx. What does that mean for my 1099-R?
You will likely receive two 1099-R forms in the year that you change from a disability retiree to regular retirement. One will be coded distribution code “3” and the other code “7.”
Example: Sara Jane has been receiving monthly benefits. When she turned 60 in 2013, she chose regular retirement. She will then receive two different 1099-R forms in 2013. One form will have a distribution code “3” in Box 7 for payments classified as disability benefits. The other 1099-R will cover payments for normal/regular retirement with a distribution code “7” in Box 7. Although the amount she received each month did not change, the “type” of benefit being paid did change from a disability benefit to a normal/regular retirement benefit because of her age. Next year, Sara will receive a single 1099-R covering all 12 months for a normal/regular retirement distribution.
My spouse was a LASERS retiree who passed away in 20xx. Will a 1099-R be issued in my spouse’s name?
Yes, you will receive at least two 1099-R forms. One will have a distribution code of either “2” or “7” and contain the benefits paid prior to death and the second will be for benefits paid after death to your spouse or the estate with a distribution code “4.” Also, as your spouse’s survivor/beneficiary, you will receive a 1099-R form under your taxpayer identification number with a distribution code “4,” for any distribution made to you.
If I rolled over funds during the year, will I receive a 1099-R?
Yes. Any money rolled over (such as a refund or DROP or IBO account distribution) into a qualified plan such as a tax-sheltered annuity, a governmental 457(b) plan, or an IRA will generate a separate Form 1099-R with a distribution code of “G.” You will receive a separate 1099-R for your monthly benefit amount.
I took a lump sum leave payment when I retired. Does that generate a 1099?
Yes. If the leave payment was rolled over to a qualified plan it will have a distribution code “G.” But, if you separated from employment before the year you turn 55 and you received a lump sum leave payment before age 59½, the 1099-R will have a distribution code “1” for the lump sum leave payment. You will also receive a 1099-R for your retirement benefits with a distribution code “2.”
Is a separate 1099-R issued for a DROP/IBO distribution taken if the member is also receiving a service retirement distribution?
LASERS sent me an invoice in 20xx saying I owed money to the System because of an overpayment during the year. Why is it included on my 1099-R?
Because the invoice was not paid back in full.
Example: If you were invoiced for 2013 payments and those payments were paid back in full in 2013 (the same year), your gross amount would be reduced by the invoiced amount. If you were invoiced for 2013 payments and the invoices were not paid in full in 2013, the gross amount will not be reduced by the invoiced amount.
Please see Form 1099-R Explanation of Boxes for further clarification on the boxes that appear on Form 1099-R.