Louisiana Clerks of Court Retirement: Options, DROP, Refund

Updated October 30, 2026. Quick answer: Under the Clerks’ of Court Retirement and Relief Fund manual, a member hired on or after January 1, 2011 is eligible for regular retirement with 12 years of eligible service at age 60, paid at 3% of average final compensation per year of service. The payment option and its beneficiary cannot be changed once the first monthly payment is received. DROP lets an eligible member defer benefits for up to three years and build a lump sum of up to 36 times the monthly benefit, but the later monthly benefit is generally lower. A refund cancels all service credit, and 20% is withheld when taxable contributions are paid directly.

More on public pension COLAs for 2027: the Louisiana Clerks of Court COLA and its 2027 status.

What this page covers and what it does not

This page works from the Retirement Manual on the Louisiana Clerks of Court Association website (a plain-language summary of R.S. 11:1501 and following, undated on the page), the fund’s audited Financial Report for the year ended June 30, 2025, and its Actuarial Valuation as of June 30, 2025 (report dated November 24, 2025). The manual summarizes the statutes, so the fund should confirm any rule that matters. The figures are for regular retirement of members hired on or after January 1, 2011, with earlier hires noted; disability retirement is outside this page. For size, the audit lists “Active plan members 2,070 2,106” as of June 30, 2025 and 2024 (the first figure is the 2025 column), and the valuation’s equivalent line reads “Active Members (Includes DROP) 2,070 2,106”, so the active count includes members already in DROP.

When a pension can start

The manual has no separate vesting heading. What it shows is a service-years eligibility rule: twelve years of eligible service, the age for the hire date, and leaving employment. The audit’s plan note does use the word: “Members are vested after 12 years of service time.” Retirement is by application, and the manual advises submitting it “at least six weeks prior to the planned retirement/DROP date”. The timing also affects pay: “within ninety days of the date the applicant became eligible for the benefit, benefits will be paid retroactive to the date of eligibility”, but a later application is paid “only from the date the application is received by the board”.

How the benefit is figured

For a member hired on or after January 1, 2011 the manual pays “three percent of their monthly average final compensation” for each year of service credit, and the benefit “cannot exceed one hundred percent of the member’s monthly average final compensation”. Earlier hires accrue three percent for service through June 30, 1999 and three and one-third percent from July 1, 1999. For a hire on or after July 1, 2006, the average is over “the highest compensated sixty consecutive months”, with pay growth inside that window limited to ten percent a year.

A computed example from an assumed $5,000 monthly average final compensation and an assumed 15 years of service credit, not a Clerks’ of Court figure: at 3% for each of 15 years, the maximum monthly benefit is a computed $2,250. The manual’s own illustration (12 years, $4,000 a month) notes that its examples “do not include reciprocal service credit, service credit transferred into the retirement system at a different accrual rate, breaks in service, or other complications”.

The payment election and what each option pays a survivor

The manual says an optional form is “actuarially equivalent to the maximum benefit” and that it requires “a reduction in the amount received by the member”. The pages read give no reduction percentages for Options 1 through 4. The election is final: “No change in the option elected or the selection of the option beneficiary will be permitted after the retiree has received his initial monthly benefit payment”, with narrow exceptions for a retiree later elected Clerk of Court and for a disability retiree who returns to service before 55. The option also caps what a survivor can draw: “the benefits payable under the option selected will constitute the limit of benefits payable from the fund”.

A computed example from an assumed $2,000 maximum monthly benefit, not a Clerks’ of Court figure: Option 5 would pay 90% of it, a computed $1,800 a month to the member. The survivor share is 50% of “the member’s benefit”, so it would be a computed $900 if measured on the reduced amount or a computed $1,000 if measured on the maximum; the manual does not say which. The general trade-off is at single-life versus joint-and-survivor pension. The pages read state no spousal consent rule; the general question is at spousal consent to waive a joint and survivor annuity.

The Deferred Retirement Option Plan (DROP)

The manual calls DROP “an alternative to regular retirement which allows a member to accrue a lump sum in addition to the monthly, lifetime annuity benefit”, and cautions that it “may not provide the highest value benefit in all cases”. Entry requires “at least twelve years of service credit in the Clerks of Court Retirement and Relief Fund” plus the retirement age. Participation “may not exceed three years” and a member may take part “only once”.

On entry, “active contributing membership in the system terminates even though the participant continues in employment” and “retirement credit is not earned during DROP participation”. The monthly benefit goes into the DROP fund. The manual states the trade: the lump sum is “worth up to thirty-six times the monthly benefit accrued at DROP entry”, but the later monthly benefit is “generally lower than it would have been had they never entered DROP”, and the entry benefit “cannot be recalculated even if you choose to remain employed”. A survivor option chosen at entry is also locked: “These selections are irrevocable”.

A computed example from the assumed $2,250 monthly benefit above, not a Clerks’ of Court figure: the “up to thirty-six times” limit works out to a computed $81,000. During DROP a participant “will not be eligible to receive a cost-of-living adjustment”, and “Interest is not credited to the DROP account while a member is participating in DROP”. “Distributions from the DROP Account will not be made until employment is terminated”. A member who keeps working at the end of the period “will resume active contributing membership in the system”. If the participant dies during DROP, “a lump sum payment equal to his DROP account balance will be paid to his designated beneficiary or, if none, to his estate”.

Taking the DROP balance: rollover and withholding

The manual lists three payouts: a lump sum, a partial lump sum with a life annuity, or a life annuity on the whole balance, and says that for a life annuity “the terms of the annuity must be approved by the Board of Trustees”. On tax, distributions that empty the account in under ten years are “eligible for rollover into an Individual Retirement Account (IRA) or other qualified retirement plan”. Paid directly, “the system is required by federal law to withhold 20% of the distribution for federal income taxes”, and the manual adds a possible 10% penalty under age 59 ½. Payments made on a life-expectancy basis or stretched over ten or more years “are not eligible to be rolled over”. See 20% withholding on a pension lump sum and pension lump sum versus monthly annuity break-even.

Leaving before retirement: refund or leave the money

A member who is “terminated, and is not eligible to retire” may take a refund of accumulated employee contributions, but “all service credit attributable to the contributions will be cancelled” and “Neither the former member nor his beneficiary will be entitled to receive any benefits related to such service”. Leaving the money in is allowed, but the funds “do not accrue interest that could be paid to the former member”, the former member “is not a member of the system unless they otherwise return to membership”, and “A refund may be requested at any time”.

The manual gives reasons to leave it, including enough service “to be eligible for a deferred retirement benefit” and an expected return to covered employment. The valuation lists terminated members as 72 due a deferred benefit and 931 due a refund, a computed 1,003 together, which equals the audit’s 1,003 inactive members entitled to but not yet receiving benefits. The general trade is at pension refund versus leaving it.

How a refund is taxed and paid

Contributions made on or after January 1, 2000 are “tax-sheltered”, and “The retirement system is required to withhold 20% of the sheltered employee contributions that are eligible for rollover if they are instead paid directly to the member”. A rollover of all the sheltered contributions into an IRA or other qualified plan avoids the withholding and the 10% penalty, but “The portion of any refund equal to those employee contributions that were paid prior to January 1, 2000 may not be rolled over”.

The manual’s example has $1,000 contributed before 2000 and $5,000 sheltered, and says the $1,000 “is not subject to withholding or tax penalty”. A computed example from that $5,000, not a payment figure: if paid directly, 20% is a computed $1,000 withheld, leaving a computed $4,000 in cash before any further tax or penalty. The manual notes “The 20% withholding may be more or less than the actual federal income taxes owed” and advises that “Members should consult a tax accountant”.

Repaying a refund and buying service credit

A returning member “has the option to repay the amount he withdrew plus compounded interest”, and the repayment “will include compound interest of eight percent per year beginning on the date the refund was issued”. The pension buyback calculator can set that price against the benefit restored. Military service can be bought for “up to four years”, at a price that “on an actuarial basis, totally offsets the increase in accrued liability of the system”. The pages read give no price schedule.

If a member dies before retiring

With less than five years of service for an active member, or less than twelve for a former member, “the amount of his accumulated employee contributions will be paid to his designated beneficiary or, if none, to his estate”. With five or more years and a legal spouse, the spouse chooses between an automatic Option 2 benefit and an earlier start “reduced by one quarter of one percent for each month or fraction thereof”. The early choice has a deadline: “within ninety days of the death of the member”, and “The selection will be final and irrevocable”. A survivor may instead take a refund of contributions “in lieu of monthly survivor benefits”. See survivor benefit with a government pension.

Cost-of-living adjustments

A member may elect “an actuarially reduced retirement allowance which would provide them an automatic annual two and one-half percent cost-of-living adjustment”, and the election is “irrevocable after the effective date of retirement”. The board may separately grant an increase; the audit describes “an annual cost of 2.5% of their benefit (not to exceed $40 per month)”. The actuary reports “the Board is not authorized to grant a cost of living adjustment following this actuarial valuation”, and that “there is no evidence to conclude that COLAs will be granted on a predictable basis in the future”.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of the Clerks’ of Court fund’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The fund’s own text on DROP and refunds describes the same 20% withholding on a direct payment and the same direct-rollover alternative. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

Where the sources disagree

Refund waiting period: the withdrawal section requires the former member to “remain out of service for sixty days”, while the guaranteed-return section says “at least thirty days”. Age for a deferred pension: the deferred-retirement section says a member with twelve years who leaves early is eligible “upon attaining the age of fifty-five years”, while the eligibility section and the audit put the age at 60 for hires on or after January 1, 2011. Recent increases: the audit’s plan note says “The most recent COLAs granted were in 2021, and 2024”, but its benefit-terms note says “January 1, 2018, January 1, 2021, and January 1, 2024”, matching the actuary’s list of 2018, 2021 and 2024. The fund should confirm each.

What this page could not settle

• The pages read do not state reduction factors for Options 1 through 4, or whether the 50% share in Option 5 is measured on the reduced amount or the maximum.
• The pages read do not state a spousal consent requirement for any election, DROP entry or a refund.
• The pages read do not describe a rollover of the monthly pension; rollover treatment is stated only for DROP distributions and refunds, and the statutes behind the manual were not read.
• The pages read give no price schedule for military or prior service credit.
• The manual is undated on the page. Disability retirement, reemployment after retirement and self-directed DROP balances were not examined in depth.
• Whether the board will grant any future increase is not stated; the valuation says the board is not authorized to grant one after that valuation.

Common mistakes

• Choosing a payment option without an estimate; the pages read give no reduction figures and the choice cannot be changed after the first monthly payment.
• Treating DROP as extra money; the manual says the monthly benefit afterward is generally lower and no retirement credit is earned during DROP.
• Taking a refund and expecting to keep the pension; the refund cancels all service credit attributable to the contributions.
• Having a DROP lump sum or taxable refund paid directly to the member without a rollover; 20% is generally withheld.
• Applying more than ninety days after becoming eligible; benefits are then paid only from the date the application is received.

Related on this site: pension refund versus leaving it, single-life versus joint-and-survivor pension, 20% withholding on a pension lump sum, pension buyback calculator, spousal consent to waive a joint and survivor annuity, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension and public pension retirement decisions by system.

Sources

• Clerks’ of Court Retirement and Relief Fund (Louisiana), Retirement Manual, a plain-language summary of R.S. 11:1501 and following (HTML page, undated): https://www.laclerksofcourt.org/retirement/retirement-manual
• Louisiana Clerks of Court Retirement and Relief Fund, Financial Report 2025 and 2024 (audited financial statements, fiscal year ended June 30, 2025): https://cdn.prod.website-files.com/67c88b6e73c988dbe94e6d36/6939b8196ccd041df91e6441_LCCRRF%202025%20AUDITED%20FINANCIAL%20STATEMENTS.pdf
• Louisiana Clerks’ of Court Retirement and Relief Fund, Actuarial Valuation June 30, 2025 (report dated November 24, 2025): https://cdn.prod.website-files.com/67c88b6e73c988dbe94e6d36/6a2b0583dcf03156eebf60b7_June%2030%2C%202025%20Actuarial%20Report.pdf
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 30, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.