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Regular Session, 2010
SENATE BILL NO. 119
BY SENATOR B. GAUTREAUX
PAROCHIAL EMPLOYEES RET. Provides for funding of the Parochial Employees'
Retirement System. (7/1/10)
AN ACT1
To amend and reenact R.S. 11:1939, 2011, and 2014(C), and to repeal R.S. 11:1903(H) and2
2012(D), relative to the Parochial Employees' Retirement System; to provide relative3
to plans within the system; to provide for funding of such plans; to provide for4
proper contributions for funding purposes; to provide relative to the funds to which5
system assets are credited; to provide for interest and penalties; to provide for an6
effective date; and to provide for related matters.7
Notice of intention to introduce this Act has been published.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 11:1939, 2011, and 2014(C) are hereby amended and reenacted to10
read as follows:11
§1939. Persons not properly enrolled or properly contributing as members12
A. Any person whose membership in the system was a mandatory condition13
of employment but was not enrolled as a member due to administrative error, may14
upon application receive credit for the time such person was otherwise eligible for15
membership. The person's employer must shall certify the inclusive dates of16
employment and the salary earned by the member during these dates, or the person17 SB NO. 119
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shall submit such other evidence in lieu thereof as shall be requested by the board.1
The person, his employer, and any other person submitting evidence on his behalf,2
shall certify all evidence by an affidavit in authentic form. Should any facts or3
evidence not be true which would disqualify him from benefits, the person shall lose4
all rights to any benefits from this system. In order to receive this credit the person5
and the employer shall pay the greater of: an amount equal to the employee and6
employer contributions which would have been paid had the person been enrolled7
at the time of employment , plus interest as determined by the board, which shall be8
not less than seven percent the system's actuarial valuation rate compounded9
annually, or an amount which, on an actuarial basis, totally offsets the increase in10
accrued liability of the system resulting from the receipt of the credit by the person.11
The amount payable shall be calculated by use of the actuarial funding method,12
assumptions, and tables in use by the system at the time of the person's application13
for credit.14
B. Any member who was properly enrolled, but who was not15
contributing on his full rate of compensation due to administrative error, may16
upon application receive credit for the amount of earnings which would17
otherwise be used to determine the member's final compensation. The18
member's employer shall certify the inclusive dates of employment and the19
salary earned by the member during these dates. The member, his employer,20
and any other person submitting evidence on the member's behalf, shall certify21
all evidence by an affidavit in authentic form. In order to receive this credit the22
member and the employer shall pay the greater of: an amount equal to the23
employee and employer contributions which would have been paid using the24
member's correct rate of compensation at the time such compensation was25
received by the member, plus interest at the current system actuarial valuation26
rate, or an amount which, on an actuarial basis, totally offsets the increase in27
accrued liability of the system resulting from the receipt of the credit by the28
person. The amount payable shall be calculated by use of the actuarial funding29 SB NO. 119
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method, assumptions, and tables in use by the system at the time of the1
member's application for credit. A member who does not purchase the2
additional credit relative to his full rate of compensation shall be given full3
eligibility service credit, however, he shall be given pro rata service credit based4
on the percentage of salary reported to the retirement system relative to his full5
rate of compensation for benefit computation purposes.6
* * *7
§2011. General8
All of the assets of the retirement system shall be credited according to the9
purpose for which they are held to one of thirteen twelve funds, namely the annuity10
savings fund A, the annuity savings fund B, the annuity savings fund C, the annuity11
reserve fund A, the annuity reserve fund B, the annuity reserve fund C, the pension12
accumulation fund A, the pension accumulation fund B, the pension accumulation13
fund C, the Deferred Retirement Option Plan Fund A, the Deferred Retirement14
Option Plan Fund B, and the Deferred Retirement Option Plan Fund C, and the15
expense fund. Expenses for the entire system shall be paid from the pension16
accumulation fund from Plan A. Annually, a transfer of funds from Plans B17
and C shall be made to reimburse Plan A for the pro rata expenses attributable18
to each fund.19
* * *20
§2014. Payment of contributions; delinquency penalty; agreement to deductions21
* * *22
C. Payments due under Subsections A and B, above, of this Section shall23
be considered delinquent when not received by the system within fifteen days after24
the close of each fiscal quarter as determined by the Board. Delinquent payments25
may shall, with interest at the rate of one and one-half percent per month26
compounded monthly, become due immediately upon determination of27
delinquency by the board and may be recovered by action in a court of competent28
jurisdiction against the employer liable therefor or shall, upon due certification of29 SB NO. 119
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delinquency and at the request of the board, be deducted from any other moneys1
monies payable to such employer by any department or agency of the state. The2
board may request its actuary to compute the accrued liability of the system3
resulting from the delinquent receipt of these payments. If, pursuant to that4
calculation, it is determined that the payment of interest, as specified in this5
Subsection, is insufficient to pay the amount which, on an actuarial basis, totally6
offsets the increase in accrued liability of the system resulting from the receipt7
of the credit by the employee for the delinquent payments, the board shall also8
collect an additional amount, sufficient, on an actuarial basis, to totally offset9
the increase in accrued liability. This sum shall be due and owing and may be10
recovered as specified in this Subsection. The amount payable shall be11
calculated by use of the actuarial funding method, assumptions, and tables in12
use by the system at the time of the person's application for credit.13
Section 2. R.S. 11:1903(H) and 2012(D) are hereby repealed.14
Section 3. This Act shall become effective on July 1, 2010; if vetoed by the governor15
and subsequently approved by the legislature, this Act shall become effective on July 1,16
2010, or on the day following such approval by the legislature, whichever is later.17
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren B. Bailey.
DIGEST
B. Gautreaux (SB 119)
Present law (R.S. 11:1939) provides that any person whose membership in the Parochial
Employees' Retirement System (PERS) was a mandatory condition of employment but was
not enrolled due to administrative error may, upon application receive credit for the time
such person was otherwise eligible for membership. Present law requires proof of inclusive
dates of employment and the salary earned by the member during these dates. Provides that
to receive this credit the person and the employer shall pay the greater of: an amount equal
to the employee and employe r contributions which would have been paid had the person
been enrolled at the time of employment, plus interest thereon, or an amount which, on an
actuarial basis, totally offsets the increase in accrued liability of the system resulting from
the receipt of the credit by the person.
Proposed law retains present law.
Proposed law provides that a member who was properly enrolled, but who was not
contributing on his full rate of compensation due to an administrative error may apply to
receive credit for the amount of earnings which would otherwise be used to determine the
member's final compensation for benefit calculation. SB NO. 119
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that if member fails to purchase the additional credit relative to his
full rate of compensation he will be given pro rata service credit based on the percentage of
salary reported to the system relative to his full rate of compensation.
Proposed law retains present law provisions regarding proof of dates of employment and
salary earned, and providing for actuarial calculation of payment amount.
Present law provides that all assets of PERS shall be credited to one of thirteen funds,
including an annuity savings fund, an annuity reserve fund, a pension accumulation fund and
a Deferred Retirement Option Plan fund for each of the system's three retirement plans, and
the system's expense fund.
Proposed law reduces the total number of funds in the PERS to twelve by terminating the
use of the expense fund.
Proposed law provides for all expenses of the system to be paid from the pension
accumulation fund from Plan A with an annual transfer of funds from Plans B & C to
reimburse Plan A for the pro rata expenses attributable to each fund.
Present law provides that each employer participating in PERS shall pay employer and
employee contributions into the appropriate fund by the due dates determined by the Board.
Provides that employer contributions shall be considered delinquent when not received by
the system within 15 days after the close of each fiscal quarter.
Proposed law retains present law.
Present law allows delinquent payments plus interest to be recovered by action in a court
of competent jurisdiction. Present law mandates delinquent contributions to be deducted
from any other monies payable to such employer by any department or agency of the state,
upon due certification of delinquency and at the request of the board.
Proposed law retains present law. Proposed law specifies that delinquent payments plus
interest become due and payable upon determination of delinquency by the board.
Proposed law provides that if the dollar amount of employer contributions plus interest
calculated pursuant to present law is insufficient to fully fund the actuarial liability caused
by the delinquency PERS shall demand additional payments which, on an actuarial basis,
totally offset the accrued liability of the system.
Present law (R.S. 11:1903) provides that, on and after July 1, 1997, all plans submitted for
approval shall be enrolled in Plan A or Plan C.
Proposed law repeals present law.
Effective July 1, 2010.
(Amends R.S. 11:1939, 2011, and 2014 (C); repeals 1903(H) and 2012(D))