Self-Directed Plan FAQs
What is the Self-Directed Plan?
LASERS established a Self-Directed Plan (SDP) which is a 401(a) retirement plan. While some have the option to participate, others are required to participate in this plan. Once the Deferred Retirement Option Plan (DROP) accumulation period ends, or a retiree selects an Initial Benefit Option (IBO) at the time of retirement, 100 percent of the participant’s DROP or IBO balance is transferred to the SDP administered by a third-party provider.
Who administers the Self-Directed Plan?
Empower is the third party provider for the Self-Directed Plan. As a participant, you are allowed to choose from a wide variety of fixed investment options and mutual funds from asset classes with different holdings, management styles, and risk factors. You can diversify your investments in the way that you would like. More information is available at:
Who has the option to choose the Self-Directed Plan?
Participation in the Self-Directed Plan is optional if:
- you became eligible for retirement before January 1, 2004 and select an IBO at the time of your actual retirement, OR
- you became eligible for DROP participation before January 1, 2004, OR
- you are a spousal beneficiary of a DROP/IBO participant.
Participation in the Self-Directed Plan is mandatory if:
- you became eligible for retirement on or after January 1, 2004 and select an IBO at the time of your actual retirement, OR
- you became eligible for DROP participation on or after January 1, 2004
What are the risks of participating in the Self-Directed Plan?
Participation in the SDP may result in the risk of loss of principal or earnings based on market performance and each participant agrees that neither the State of Louisiana nor LASERS is obligated for any loss in account funds.
How do I transfer from a traditional LASERS DROP/IBO Account to the Self-Directed Plan?
For those who have an option to transfer funds to the Self-Directed Plan, please use LASERS Form 09-04: Transfer to Self-Directed Plan. If participation is mandatory, the funds will be transferred automatically after DROP participation ends or after retirement if an IBO was selected.
How can I receive my money?
You can begin receiving your SDP benefits by contacting Empower upon retirement or termination of employment. In the event of your death, your designated beneficiary should contact Empower to receive the balance in your account.
What are my distribution options?
- Defer the start of payments from your account until April 1 following the calendar year in which you attain age 72;
- periodic payments;
- fixed annuity payments;
- partial lump sum with remainder paid as periodic payments or annuity payments;
- a lump sum.
- Roll over your account balance to an eligible governmental 457(b), 401(k), 403(b) or 401(a) plan or to an IRA.
What are the tax implications of participating in the Self-Directed Plan?
Distributions from the SDP are exempt from Louisiana state income tax. However, should you rollover the funds to another tax sheltered vehicle the Louisiana state income tax exemption will no longer apply. Ordinary federal income tax will apply to any benefit received during the calendar year. Some penalties may apply for early withdrawal. Contact your Empower representative for additional information.