Updated October 16, 2026. Quick answer: The Parochial Employees’ Retirement System of Louisiana (PERS) runs two plans, and the figures differ by plan. Plan A pays 3% of final average compensation for each year of service and Plan B pays 2%. A retiree picks the Maximum payment or Option 2, 3 or 4, and the brochure says a retiree cannot change the beneficiary designation after retirement. DROP pays a lump sum at retirement that can be rolled over, and 20% is withheld if it is paid directly to the member. A refund of contributions cancels all accrued rights in the system.
What this page covers and what it does not
This page covers the Parochial Employees’ Retirement System of Louisiana (PERS) and keeps its two plans apart, because the brochure says “PLAN A was designed for employers out of Social Security” and “PLAN B was designed for those employers that remained in Social Security on the revision date”. The documents read are the PERS brochure titled Summary of Principal Features Through the 2023 Louisiana Legislature, the undated one page fact sheets for each plan, and the PERS annual funding valuation as of December 31, 2025. The brochure says: “The information contained herein is current through the 2023 Louisiana Legislative Session.” It adds: “It is subject to change during each session of the state legislature.” Later changes are therefore not reflected here, and the brochure states that “ALL BENEFITS SHALL BE PAYABLE AS PROVIDED BY STATE LAW”. Confirm the current rule with PERS before acting.
Membership counts are per plan. The valuation reports “there are 14,528 active members in Plan A” and “There are 2,408 active members in Plan B”. The valuation’s membership chart legend reads “Active Members (including DROP participants)”, and it prints no combined figure for the two plans, so this page gives none.
Plan A and Plan B: the two formulas
For Plan A the brochure says “The retirement allowance is equal to three percent of the member’s final average compensation multiplied by his years of creditable service”. For Plan B it says “The member can receive a retirement allowance equal to two percent of the member’s final average compensation multiplied by his years of creditable service”.
| Plan | Formula | Brochure examples (annual benefit) | Employee contribution rate in the brochure | Active members, valuation of December 31, 2025 |
|---|---|---|---|---|
| Plan A | 3% of final average compensation, times years of creditable service | 30 years and $20,000: $18,000 a year | 9.5% | 14,528 |
| Plan B | 2% of final average compensation, times years of creditable service | 30 years and $20,000: $12,000 a year; 12 years and $15,000: $3,600 a year | 3.0% | 2,408 |
The pay figure is a final average: “Final average compensation shall be defined as the average of the highest consecutive 36 months salary for members hired prior to 1/1/07”. “For members hired 1/1/07 and later, final average compensation shall be defined as the average of the highest consecutive 60 months salary.” The employee rates in the table come from the brochure’s statement that “the Plan A employee rate is 9.5% and the Plan B employee rate is 3.0%”.
A computed example from assumed inputs, not a PERS figure: take 25 years of service and an assumed $40,000 final average compensation. Plan A applies 3% for each of 25 years to $40,000, a computed $30,000 a year or a computed $2,500 a month before any payment option reduction. Plan B applies 2% to the same inputs, a computed $20,000 a year or a computed $1,667 a month.
When a pension can start
Eligibility pairs years of service with age, and it depends on the plan and the hire date. The brochure says “Act 584 of 2006 implemented a new plan of benefits for employees hired 1/1/07 and later”.
| Plan and hire date | Years of service and age for normal retirement | Highest consecutive months averaged |
|---|---|---|
| Plan A, hired before 1/1/07 | 7 years and age 65; 10 years and age 60; 25 years and age 55; 30 years and any age | 36 months |
| Plan A, hired 1/1/07 and later | 7 years and age 67; 10 years and age 62; 30 years and age 55 | 60 months |
| Plan B, hired before 1/1/07 | 7 years and age 65; 10 years and age 60; 30 years and age 55 | 36 months |
| Plan B, hired 1/1/07 and later | 7 years and age 67; 10 years and age 62; 30 years and age 55 | 60 months |
For members hired before 1/1/07 the Plan A list carries 25 years at age 55 and 30 years at any age, while the Plan B list requires age 55 with 30 years.
The election: Maximum, Option 2, Option 3 or Option 4
The brochure says “Payment Options are applicable when a member is eligible for normal retirement, DROP or disability retirement”. The choice sets what a survivor receives.
| Choice | What the retiree receives | What a survivor receives |
|---|---|---|
| Maximum | The largest monthly benefit the retiree is eligible to receive | No continuing monthly benefit; if the retiree dies before receiving an amount equal to his contributions, any balance is paid in a lump sum to the beneficiary or estate |
| Option 2 | A reduced benefit | The same benefit, paid to the spouse for life |
| Option 3 | A reduced benefit | One half of the retiree’s benefit, paid to the spouse for life |
| Option 4 | A payment to the retiree or a nominated person, actuarially equivalent to the allowance and approved by the board | Depends on the arrangement the board approves |
Of the Maximum the brochure says “it ceases at death of the retiree”. For Options 2 and 3 it says “The retiree designates his or her spouse as beneficiary at time of retirement and receives a reduced benefit”. Under Option 2 “If the spouse survives the retiree, the same benefit will be paid to the spouse throughout the spouse’s lifetime”. Under Option 3 “If the spouse survives the retiree, one half of retiree’s benefit will be paid to the spouse throughout the spouse’s lifetime”. The trade-off is explained at single-life versus joint-and-survivor pension.
A computed example from an assumed $1,500 reduced monthly benefit, not a PERS figure: the pages read do not print the reduction percentages, so $1,500 stands in for whatever reduced amount PERS quotes. Under Option 2 a surviving spouse would receive that same $1,500. Under Option 3 the spouse would receive one half, a computed $750 a month.
The payment options section also describes inflation protection built into the choice: “Act 270 of 2009 provided for further reduced actuarial payments to provide an annual 2.5% cost of living adjustment commencing at age 55”. It states that “This automatic COLA is paid for by actuarial reduction which is dependent on the age of the retiree”. The size of that reduction is not printed in the pages read.
What is irrevocable and the deadline
“A retiree cannot change the designation of beneficiary after retirement.” The choice of option and beneficiary should be compared with a PERS quote before the application is filed.
On timing, the brochure says “Retirement applications must be submitted in a timely fashion since the system requires a minimum of 30 days to complete the process”, and “Retirements can be made effective no more than 30 days prior to the receipt of the application in the retirement system office”. The pages read do not describe a spousal consent form; the general question is at spousal consent to waive a joint and survivor annuity.
DROP: the lump sum and the rollover
In the documents read, the lump sum at retirement appears under DROP. The brochure says “Act 338 of 1990 established the Deferred Retirement Option Plan (DROP) for this retirement system”. Who may enter: “Only those members who are eligible for normal retirement are eligible for DROP.” The price: “A member who becomes a DROP participant ceases to be a member of the system and loses all rights of membership.” “No credit for retirement is earned during DROP.”
On length, the brochure says “DROP participation defaults to 3 years for all participants.” The Plan B fact sheet says “May participate for up to 36 months”. Also, “The duration of the DROP period must be specified and may not be extended”, and “You may enter DROP only once”. On contributions: “Employee contributions cease but employer contributions continue”.
The deposit is “The deposit to the participant’s DROP account is equal to the benefit computed under the retirement plan option selected at the time of DROP application”. The fact sheets say “Original DROP benefit is frozen upon entering DROP” and give the payout as “Lump sum = (monthly benefit) x (months in DROP)”. To collect it, “In order that a DROP participant may receive a lump sum payment of accumulated benefits, it is necessary that employment be terminated”.
On rolling it over: “Lump sum payments may be rolled over into an Individual Retirement Account (IRA) or another qualified retirement plan.” “If the member elects the rollover of the lump sum, payment of the full amount is made directly to the financial institution.” “If a payment is made directly to the member, Federal law effective 1/1/93 requires that 20% be withheld for Federal income tax withholding purposes.” See 20% withholding on a pension lump sum.
A computed example from an assumed $2,500 monthly benefit, not a PERS figure: for the full 36 months the lump sum is a computed $90,000. If it were paid to the member, 20% would be withheld, a computed $18,000, leaving a computed $72,000 in cash before any other tax. A direct rollover would send the full amount to the financial institution. The pages read do not say whether the account earns interest during DROP, so the example uses none.
A member who works on should know that “Please note, the original DROP benefit is frozen and will not be recomputed no matter how long the member continues employment following DROP”. A member who returns to work too soon faces a repayment rule: “a member who returns to work within a period of time shorter than the period in which he participated in DROP will be required to repay all funds withdrawn together with interest from the date of withdrawal”. “No cost of living payments to retirees are made to DROP participants.”
Leaving before retirement: a vested pension or a refund
On vesting, the brochure says “For employees hired 1/1/07 and later, vesting occurs with seven years of service credit; however, these members must attain age 67 before becoming eligible for normal retirement”. A vested member who leaves and takes no refund has this path: “A vested member who withdraws from active service prior to becoming eligible for retirement, and having received no refund of his accumulated contributions, shall be entitled to receive a retirement allowance to commence on the earliest normal retirement date”.
The refund rule reads: “Upon withdrawal from service, members not entitled to a retirement allowance are paid a refund of accumulated contributions upon written request and verification of termination by the employer.” “Receipt of such a refund cancels all accrued rights in the system.” That passage does not say whether a vested member may choose a refund over the deferred allowance, so that question belongs with PERS. The trade-off is at pension refund versus leaving it.
For a refund the brochure says “Refunds shall not be payable until 30 days after termination of employment or death and until all contributions due are submitted”. Its checklist says “A refund request form must be completed and signed by both the employee and the employer and submitted to the retirement system office”. A later return is affected: “If a member receives a refund of contributions and is subsequently rehired on or after January 1, 2007, the provisions of Act 584 of 2006 shall apply”.
How a refund is taxed and paid
For contributions made before January 1, 1993, which the brochure describes as after-tax, it says “refunds of these contributions carry no tax consequences”. Contributions are eligible “to be rolled over to an IRA, to another qualified plan, or to a 457 plan”. If the member takes the money instead, “If a terminated member chooses to have post-1992 contributions made payable to him, Federal law requires that 20% be withheld for Federal income tax purposes”. It also says that “refunds of post-1992 contributions made payable to a member not yet 59 ½ years old are subject to a 10% penalty under Federal law”.
A computed example from an assumed $10,000 taxable refund paid to the member, not a PERS figure: 20% is a computed $2,000 withheld, leaving a computed $8,000 in cash before any further tax. If the brochure’s 10% penalty statement applied in full, that would be a computed $1,000 on the same amount.
Buying back refunded service and other service credit
A member who took a refund and returns may restore the service. The brochure says: “Any member who has withdrawn contributions shall be entitled to repay the refund, plus interest compounded annually (to be equal to the board-approved actuarial valuation rate, currently 6.4%) to re-establish creditable service after six (6) months current membership.” See the pension buyback calculator. For military service it says “Service credit for up to a maximum of four years of military service may be purchased”, paid at “an amount that on an actuarial basis offsets the increase in the accrued liability of the system”.
Cost-of-living adjustments
The brochure describes two mechanisms. One is the option built into the payment choice, described above. The other is a board decision: “the Board of Trustees may provide a cost of living adjustment to retirees and beneficiaries who are age 62 and over”. Retirees age 62 and older who have been retired one year or more as of December 31 are eligible if a COLA is granted, and an approved increase can be as much as 2 1/2% of the current benefit. The brochure cautions that “It is important to note that cost of living adjustments are not automatic or guaranteed”.
If a member dies while still working
For Plan A the fact sheet says “Member must be active and have been married for at least 12 months prior to death of the member” and “If a member was eligible for normal retirement at the time of death, the surviving spouse receives an automatic Option 2 benefit”. For Plan B it says “Active members must have 10 years of service and have been married for at least 12 months prior to death of the member”. The brochure attaches the 10 years to a member who was not eligible for normal retirement: the spouse, if not eligible for Social Security survivorship or retirement benefits, receives an automatic Option 2 benefit payable when the spouse attains age fifty, and if the member was eligible for normal retirement at death the surviving spouse receives an automatic Option 2 benefit. The brochure adds “Survivor benefits are payable only when a member dies in service”.
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 PERS’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 brochure and the Plan A and Plan B fact sheets describe the same 20% withholding on a payment made directly to the member and offer a direct rollover as the 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
The service needed for a Plan A survivor benefit depends on the hire date in the fact sheet. The Plan A fact sheet says active members hired prior to 1/1/07 need 5 years of service and, for active members hired on or after 1/1/07, 7 years of service is required. The brochure says “Five years of creditable service are required in order to be eligible for survivor benefits” without splitting by hire date, so confirm with PERS which applies to a member hired on or after 1/1/07.
The brochure states a penalty for refunds paid to a member under 59 ½ without mentioning exceptions, while the IRS topic page quoted above lists exceptions. The brochure is a plan summary, not tax advice.
What this page could not settle
- The pages read do not print the reduction PERS applies under Option 2, Option 3, Option 4 or the 2.5% cost of living option.
- The pages read do not state whether a vested member may choose a refund instead of the deferred allowance, or what interest PERS adds to refunded contributions.
- The pages read do not describe a spousal consent requirement for a survivor option.
- The pages read do not state whether a DROP account earns interest during DROP.
- The brochure is current only through the 2023 Legislative Session and the fact sheets are undated, so later legislation is not reflected.
- The valuation gives active member counts per plan and no combined total is used here.
- Disability retirement, reciprocal recognition of service, the brochure’s Social Security offset section and state tax treatment were not examined in depth.
Common mistakes
- Mixing Plan A and Plan B figures: Plan A uses a 3% formula and Plan B uses 2%.
- Choosing an option or beneficiary and expecting to change it later; the brochure says the designation cannot be changed after retirement.
- Taking a refund without weighing that it cancels all accrued rights in the system.
- Letting a DROP lump sum be paid directly to the member and finding 20% withheld; a direct rollover sends the full amount to the financial institution.
- Treating a 2023 plan summary as current law.
Related on this site: Louisiana retirement taxes, does Louisiana tax pensions, Louisiana MPERS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, 20% withholding on a pension lump sum and public pension retirement decisions by system.
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Answer againSources
- Parochial Employees’ Retirement System of Louisiana, Summary of Principal Features Through the 2023 Louisiana Legislature (brochure, current through the 2023 Legislative Session): https://img1.wsimg.com/blobby/go/07f1d526-18a0-4f8f-a2f1-4bc942f3edad/brochure23.pdf
- Parochial Employees’ Retirement System of Louisiana, Plan A Fact Sheet (undated): https://img1.wsimg.com/blobby/go/07f1d526-18a0-4f8f-a2f1-4bc942f3edad/Plan%20A.pdf
- Parochial Employees’ Retirement System of Louisiana, Plan B Fact Sheet (undated): https://img1.wsimg.com/blobby/go/07f1d526-18a0-4f8f-a2f1-4bc942f3edad/Plan%20B%20Fact%20Sheet.pdf
- Parochial Employees’ Retirement System of Louisiana, Annual Funding Valuation, December 31, 2025 (actuarial report): https://img1.wsimg.com/blobby/go/07f1d526-18a0-4f8f-a2f1-4bc942f3edad/PERS%20Actuarial%202025%20Valuation%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 16, 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.