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ACT No. 1026
Regular Session, 2010
HOUSE BILL NO. 748
BY REPRESENTATIVE PEARSON
AN ACT1
To amend and reenact R.S. 11:102(B)(1), (2)(introductory paragraph), (b)(i) and (ii), and (c),2
(3)(a) and (d)(v), (4), and (5)(b) and to enact R.S. 11:102(C), relative to the3
Louisiana State Employees' Retirement System; to provide relative to system4
funding; to require individualized normal cost payments for employers; to require5
individualized payments for changes in actuarial liability for employers; to provide6
an effective date; and to provide for related matters.7
Notice of intention to introduce this Act has been published8
as provided by Article X, Section 29(C) of the Constitution9
of Louisiana.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 11:102(B)(1), (2)(introductory paragraph), (b)(i) and (ii), and (c),12
(3)(a) and (d)(v), (4), and (5)(b) are hereby amended and reenacted and R.S. 11:102(C) is13
hereby enacted to read as follows: 14
ยง102. Employer contributions; determination; state systems15
* * *16
B.(1) Except as provided in Subsection C of this Section for the Louisiana17
State Employees' Retirement System and except as provided in R.S. 11:102.1 and18
102.2 and in Paragraph (5) of this Subsection, for each fiscal year, commencing with19
Fiscal Year 1989-1990, for each of the public retirement systems referenced in20
Subsection A of this Section, the legislature shall set the required employer21
contribution rate equal to the actuarially required employer contribution, as22
determined under Paragraph (3) of this Subsection, divided by the total projected23
payroll of all active members of each particular system for the fiscal year. Each24 ENROLLEDHB NO. 748
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entity funding a portion of a member's salary shall also fund the employer's1
contribution on that portion of the member's salary at the employer contribution rate2
specified in this Subsection.3
(2) At the end of each fiscal year, the difference between the actuarially4
required employer contribution for the fiscal year, as determined under Paragraph5
(3) of this Subsection or pursuant to Subsection C of this Section, and the amount of6
employer contributions actually received for the fiscal year, excluding any amounts7
received for the extraordinary purchase of additional benefits or service, shall be8
determined.9
* * *10
(b) At the end of each fiscal year, the difference between the minimum11
employer contribution, as required by the Constitution of Louisiana, and the12
actuarially required employer contribution for the fiscal year, as determined under13
Paragraph (3) of this Subsection or pursuant to Subsection C of this Section, shall be14
determined and applied in accordance with the following provisions:15
(i) The amount, if any, by which the actuarially required contribution for a16
system exceeds the constitutionally required minimum contribution for that system17
shall be accumulated in an employer credit account which shall be adjusted annually18
to reflect any gain or loss attributable to the balance in the account at the actuarial19
rate of return earned by the system.20
(ii) Except as provided in Paragraph (5) of this Subsection, annual21
contributions required in accordance with this Subsection, or the constitutional22
minimum if greater, may be funded in whole or in part from the employer credit23
account, provided the employee contribution rate or rates for the system as set forth24
in R.S. 11:62 has or have been reduced to an amount equal to or less than fifty25
percent of the annual normal cost for the system or the plan as provided in26
Subsection C of this Section, rounded to the nearest one-quarter percent.27
* * *28
(c) Except as provided in R.S. 11:102.1 and 102.2, differences occurring for29
any other reason shall be added to or subtracted from the following fiscal year's30 ENROLLEDHB NO. 748
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actuarially required employer contribution in accordance with Subparagraph (3)(c)1
of this Subsection or with Subsection C of this Section.2
(3) With respect to each state public retirement system, the actuarially3
required employer contribution for each fiscal year, commencing with Fiscal Year4
1989-1990, shall be that dollar amount equal to the sum of:5
(a) The employer's normal cost for that fiscal year, computed as of the first6
of the fiscal year using the system's actuarial funding method as specified in R.S.7
11:22 and taking into account the value of future accumulated employee8
contributions and interest thereon, such employer's normal cost rate multiplied by the9
total projected payroll for all active members to the middle of that fiscal year. For10
the Louisiana State Employees' Retirement System, effective for the June 30, 2010,11
system valuation and beginning with Fiscal Year 2011-2012, the normal cost shall12
be determined in accordance with Subsection C of this Section.13
* * *14
(d) That fiscal year's payment, computed as of the first of that fiscal year and15
projected to the middle of that fiscal year at the actuarially assumed interest rate,16
necessary to amortize changes in actuarial liability due to:17
* * *18
(v) Effective July 1, 2004, and beginning with the fiscal year ending June 30,19
1999, the amortization period for the changes, gains, or losses of the Louisiana State20
Employees' Retirement System provided in Items (i) through (iv) of this21
Subparagraph shall be thirty years, or in accordance with standards promulgated by22
the Governmental Accounting Standards Board, from the year in which the change,23
gain, or loss occurred. The outstanding balances of amortization bases established24
pursuant to Items (i) through (iv) of this Subparagraph before the fiscal year ending25
June 30, 1999, shall be amortized as a level dollar amount from July 1, 2004, through26
June 30, 2029. Beginning with the year ending June 30, 2004, and for each fiscal27
year thereafter, the outstanding balances of amortization bases established pursuant28
to Items (i) through (iv) of this Subparagraph shall be amortized as a level dollar29
amount. For the Louisiana State Employees' Retirement System, effective for the30 ENROLLEDHB NO. 748
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June 30, 2010, system valuation and beginning with Fiscal Year 2011-2012,1
amortization payments for changes in actuarial liability shall be determined in2
accordance with Subsection C of this Section.3
* * *4
(4) At the end of the fiscal year during which the assets of a system,5
excluding the outstanding balance due to Subparagraph B(3)(c) of this Section,6
exceed the actuarial accrued liability of that system, the amortization schedules7
contained in Subparagraphs B(3)(b) and (d) or in Subsection C of this Section of this8
Section shall be fully liquidated and assets in excess of the actuarial accrued liability9
shall be amortized as a credit in accordance with the provisions of Subparagraph10
B(3)(d) of this Section.11
(5)(a)12
* * *13
(b) At the end of each fiscal year, the difference, if any, by which the amount14
of contributions received from payment of all employer contributions at the fixed15
minimum employer contribution rate established pursuant to this Paragraph exceeds16
the greater of the minimum employer contribution required by Article X, Section 2917
of the Constitution of Louisiana or the statutory minimum employer contribution rate18
calculated according to the methodology provided for in Items (3)(d)(i) through (iv)19
of this Subsection or in Paragraph (C)(4) of this Section shall be accumulated in an20
employer credit account for the respective system.21
* * *22
C.(1) This Subsection shall be applicable to the Louisiana State Employees'23
Retirement System effective for the June 30, 2010, system valuation and beginning24
Fiscal Year 2011-2012. For purposes of this Subsection, "plan" or "plans" shall25
mean a subgroup within the system characterized by the following employee26
classifications:27
(a) Rank-and-file members of the system.28
(b) Full-time law enforcement personnel, supervisors, or administrators who29
are employed with the Department of Revenue or office of alcohol and tobacco30 ENROLLEDHB NO. 748
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control and who are P.O.S.T. certified, have the power to arrest, and hold a1
commission from such office.2
(c) Peace officers, as defined by R.S. 40:2402(3)(a), employed by the3
Department of Public Safety and Corrections, office of state police, other than state4
troopers.5
(d) Judges and court officers to whom Subpart A of Part VII of Chapter 1 of6
Subtitle II of this Title is applicable.7
(e) Wildlife agents to whom Subpart B of Part VII of Chapter 1 of Subtitle8
II of this Title is applicable.9
(f) Wardens, correctional officers, probation and parole officers, and security10
personnel employed by the Department of Public Safety and Corrections who are11
members of the secondary component pursuant to Subpart C of Part VII of Chapter12
1 of Subtitle II of this Title.13
(g) Correctional officers, probation and parole officers, and security14
personnel employed by the Department of Public Safety and Corrections who are15
members of the primary component.16
(h) Legislators, the governor, and the lieutenant governor.17
(i) Employees of the bridge police section of the Crescent City Connection18
Division of the Department of Transportation and Development.19
(j) Hazardous duty plan members as provided pursuant to the provisions of20
the Act that originated as House Bill No. 1337 of the 2010 Regular Session.21
(k) Judges as provided pursuant to the provisions of the Act which originated22
as House Bill No. 1337 of the 2010 Regular Session.23
(l) Any other specialty retirement plan provided for a subgroup of system24
members. If the legislation enacting such a plan is silent as to the application of this25
Subsection, the Public Retirement Systems' Actuarial Committee shall provide for26
the application to such plan.27
(2) For the Louisiana State Employees' Retirement System, effective for the28
June 30, 2010, system valuation and beginning with Fiscal Year 2011-2012, the29
normal cost calculated pursuant to Subparagraph (B)(3)(a) of this Section, shall be30 ENROLLEDHB NO. 748
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calculated separately for each particular plan within the system . An employer shall1
pay employer contributions for each employee at the rate applicable to the plan of2
which that employee is a member.3
(3) For the Louisiana State Employees' Retirement System, effective for the4
June 30, 2010, system valuation and beginning with Fiscal Year 2011-2012, changes5
in actuarial liability due to legislation, changes in governmental organization, or6
reclassification of employees or positions shall be calculated individually for each7
particular plan within the system based on each plan's actuarial experience as further8
provided in Subparagraph (4)(c) of this Subsection.9
(4) For each plan referenced in Paragraph (1) of this Subsection, the10
legislature shall set the required employer contribution rate equal to the sum of the11
following:12
(a) The particularized normal cost rate. The normal cost rate for each fiscal13
year shall be the employer's normal cost for the plan computed by applying the14
method specified in R.S. 11:102(B)(1) and (3)(a) to the plan.15
(b) The shared unfunded accrued liability rate. A single rate shall be16
computed for each fiscal year, applicable to all plans for actuarial changes, gains, and17
losses existing on June 30, 2010, or occurring thereafter, including experience and18
investment gains and losses, which are independent of the existence of the plans19
listed in Paragraph (1) of this Subsection, the payment and rate therefor shall be20
calculated as provided in Paragraphs (B)(1) and (3) of this Section.21
(c) The particularized unfunded accrued liability rate. For actuarial changes,22
gains, and losses, excluding experience and investment gains and losses, first23
recognized in the June 30, 2010, valuation or in any later valuation, attributable to24
one or more, but not all, plans listed in Paragraph (1) of this Subsection or to some25
new plan or plans, created, implemented, or enacted after the effective date of this26
Subsection, a particularized contribution rate shall be calculated as provided in27
Paragraphs (B)(1) and (3) of this Section.28
(d) The shared gross employer contribution rate difference. The gross29
employer contribution rate difference shall be the difference between the minimum30 ENROLLEDHB NO. 748
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gross employer contribution rate provided in Paragraph (B)(5) of this Section and the1
aggregate employer contribution rate calculated pursuant to the provisions of2
Subsection B of this Section.3
(5) Each entity funding a portion of the member's salary shall also fund the4
employer's contribution on that portion of the member's salary at the employer5
contribution rate specified in this Subsection.6
(6) For purposes of Paragraph (B)(2) of this Section the actuarially required7
employer contributions and the employer contributions actually received for all plans8
shall be totaled and treated as a single contribution.9
(7) If provisions of this Section cover matters not specifically addressed by10
the provisions of this Subsection, then those provisions shall be applicable.11
Section 2. This Act shall become effective on July 1, 2010; if vetoed by the governor12
and subsequently approved by the legislature, this Act shall become effective on July 1,13
2010, or on the day following such approval by the legislature, whichever is later.14
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: