MPERS Member Update

March 4, 2026

Dear Members,

In January 2026, the City of New Orleans made retention and recruitment incentive payments to qualifying New Orleans Police Department officers pursuant to the City’s Classified Pay Plan.



A legal dispute has arisen regarding whether those payments are subject to mandatory retirement contributions under Louisiana law. Because this issue affects the funding of your retirement system — and may affect benefit calculations for members retiring during this period — we want to explain clearly where matters stand.

The Legal Framework

Louisiana law defines “earnable compensation” as the full amount of compensation earned by an employee for a given month, excluding only overtime. See La. R.S. 11:2213(10).

Under La. R.S. 11:2227, both employee and employer contributions are required on earnable compensation.

MPERS’s position is straightforward: retention and recruitment incentive payments are compensation earned upon satisfaction of service conditions and are therefore subject to the same mandatory contribution requirements that apply to other compensation paid through payroll.



The City has taken a different position, and the matter is now before the court for resolution.

January 2026 Payments

The Louisiana Legislative Auditor has reported that the January retention and recruitment payments totaled approximately $8 million.

Under current statutory contribution requirements, the associated retirement contributions total approximately $3.48 million.

Those contributions have not been reported or remitted to MPERS.

Because the required contributions associated with the January 2026 payments were not reported or transmitted to MPERS within the time required by law, and consistent with its fiduciary obligations to protect the retirement system and its members, MPERS has taken the action required by La. R.S. 11:2227(D)(2)(a) and certified the delinquent amount to the Louisiana State Treasurer. Under this statute, upon receipt of such certification, the Treasurer shall deduct the certified amount from funds otherwise payable to the City of New Orleans and remit those funds directly to MPERS, as required by the governing statute. The State Treasurer also serves as a trustee of MPERS under Louisiana law. This statutory safeguard exists to ensure that retirement contributions owed to the system are ultimately transmitted for the benefit of members and retirees.

Employee Contributions Deducted From Payroll

Payroll documentation reviewed by MPERS reflects that employee retirement contributions were deducted from certain retention and recruitment payments made to officers, but those deducted contributions have not been reported to or transmitted to MPERS.

Under Louisiana law, once employee retirement contributions are deducted from compensation, those amounts must be transmitted to the retirement system in accordance with Louisiana law.

Until contributions are received by MPERS:

• The payroll cannot be credited as pensionable compensation, and
• The deducted amounts cannot be applied toward a member’s retirement benefit calculation.

For members who received these payments, proper reporting and remittance directly affects how retirement benefits are calculated.

Impact on Members Approaching Retirement

Retirement benefits under MPERS are calculated using average final compensation, which is based on pensionable payroll that has been properly reported and funded.

If compensation is not reported as earnable compensation and the required contributions are not remitted:

• That payroll cannot be credited,
• It cannot be included in average final compensation, and
• It cannot be used in calculating retirement benefits.



MPERS cannot include compensation in a member’s benefit calculation unless it has been properly reported and the required contributions have been remitted as required by Louisiana law.

Consistency in Reporting and Benefit Calculations

In prior payroll cycles involving similar retention or incentive-based compensation, employee and employer contributions were deducted and transmitted to MPERS in accordance with the statutory contribution requirements, including during the City’s prior administration.

Retirement benefits for some members have been calculated based on pensionable payroll that included such compensation when properly reported and funded.



Consistent treatment of compensation across payroll periods and across participating employers is essential to maintaining fairness and actuarial soundness within a defined-benefit system.

Why This Matters to Every Member

This issue is not limited to officers who received the January payments. It affects system funding and long-term stability.

The employer contribution rate includes a dedicated 0.85% component that exists specifically to fund future cost-of-living adjustments (COLAs) and serves as the sole source of funding for those adjustments.

When required contributions are not remitted, funding designated for COLAs is reduced. Over time, that affects the system’s ability to provide COLAs.



Protecting required contributions protects both retirement benefit calculations and future COLA capacity.

Our Commitment

MPERS is constitutionally required to maintain actuarial soundness and administer the system uniformly across all participating employers.

We will continue to:

• Apply the law as written,
• Protect system funding,
• Safeguard benefits for current and future retirees, and
• Keep members informed as this matter proceeds.



The legal issues described above are currently pending before the court and will ultimately be resolved through the judicial process unless the matter is resolved sooner in a manner consistent with Louisiana law and MPERS’s fiduciary obligations to its members and retirees. If you have questions, please contact our office.