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Regular Session, 2010
SENATE BILL NO. 632
BY SENATORS B. GAUTREAUX AND NEVERS AND REPRESENTATIVE
ROBIDEAUX
RETIREMENT BENEFITS. Provides a regular schedule for permanent benefit increases
for retirees of the state retirement systems. (06/30/10)
AN ACT1
To amend and reenact R.S. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E), to2
enact R.S. 11:102(B)(3)(e), 249, 446(G), 542(G), 783(L), 883.1(H), and 1150(C),3
and to repeal R.S. 11:1145.1 and 1332, relative to state retirement systems; to4
provide for contributions; to provide for permanent benefit increases; to provide for5
an effective date; and to provide for related matters.6
Notice of intention to introduce this Act has been published.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E), are9
hereby amended and reenacted and R.S. 11:102(B)(3)(e), 249, 446(G), 542(G), 783(L),10
883.1(H), and 1150(C) are hereby enacted to read as follows: 11
§62. Employee contribution rates established12
A. Employee contributions to state and statewide public retirement systems13
shall be paid at the following rates:14
(1) Assessors' Retirement Fund - 8%.15
(2) Clerks' of Court Retirement and Relief Fund - 8.25%.16
(3) Firefighters' Retirement System - 8%.17 SB NO. 632
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(4) Louisiana School Employees' Retirement System - 7.5%.1
(5) Louisiana State Employees' Retirement System:2
(a) Judges, court officers, the governor, lieutenant governor and legislators3
- 11.5%.4
(b) Public safety service employees referred to as "member" or "members"5
in R.S. 11:601(B); peace officers employed by the Department of Public Safety and6
Corrections, office of state police, other than state troopers, as provided in R.S.7
11:444(A)(2)(b); and personnel employed by the Department of Revenue, office of8
alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c) - 9%.9
(c) Clerk of the House and Secretary of the Senate - 9.5%.10
(d) Wildlife Agents - 9.5%.11
(e) All others:12
(i) Employed on or before June 30, 2006 - 7.5%13
(ii) Employed on or after July 1, 2006 - 8%14
(f) Bridge Police - 8.5% for those employees eligible for the benefit provided15
by R.S. 11:441(F).16
(6) Municipal Police Employees' Retirement System - 8%.17
(7) Municipal Employees' Retirement System of Louisiana. Plan A - 9.25%.18
Plan B - 5%.19
(8) Parochial Employees' Retirement System of Louisiana:20
(a) Plan A - 9.5%.21
(b) Plan B - 3%.22
(c) Plan C - 5%.23
(9) Sheriffs' Pension and Relief Fund - Not less than 9.8% nor more than24
10.25%, as determined by the board of trustees in consultation with the actuary for25
the fund.26
(10) State Police Pension and Retirement System - 8.5%.27
(11) Teachers' Retirement System of Louisiana:28
(a) School lunch Plan A - 9.1%.29 SB NO. 632
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(b) School lunch Plan B - 5%.1
(c) All others - 8%.2
(12) District Attorneys' Retirement System - 7%.3
(13) Registrars of Voters Employees' Retirement System - 7%.4
B.(1) Beginning January 1, 2011, employees shall make additional5
contributions to the state retirement systems at the rates provided in this6
Subsection for the purpose of funding the benefits provided in R.S. 11:249(C)7
and (D). For each year or fraction of a year of service credited to an employee8
while making these contributions, the employee shall accrue the benefits9
provided in R.S. 11:249(C) and (D)(5). The additional employee contributions10
shall be paid at the following rates:11
(a) Louisiana School Employees' Retirement System - 3.0%.12
(b) Louisiana State Employees' Retirement System - 2.0%13
(c) State Police Pension and Retirement System - 3.0%.14
(d) Teachers' Retirement System of Louisiana - 2.0%.15
(2)(a) Each system shall evaluate whether and to what extent the16
employee contributions provided in this Subsection meet or exceed such17
liabilities not later than the June 30, 2016, valuation and at least every five years18
thereafter.19
(b) If the system actuary concludes that the employee contribution rates20
provided in this Subsection result in assets greater than the liabilities for which21
they are intended to pay, the actuary shall include such information in the next22
valuation submitted to the Public Retirement Systems' Actuarial Committee.23
The committee or the system may recommend to the legislature that the24
employee contribution rate be reduced to a level that fully funds the benefit.25
(c) Should a benefit change effective on or after July 1, 2010, for any26
system to which this Subsection applies result in an increase in the normal cost27
attributable to the benefits provided in R.S. 11:249(C) and (D), the employee28
contribution rate provided in this Subsection for that system may be increased29 SB NO. 632
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to a rate which will fully fund such increase.1
* * *2
§102. Employer contributions; determination; state systems3
* * *4
B.(1) * * *5
(3) With respect to each state public retirement system, the actuarially6
required employer contribution for each fiscal year, commencing with Fiscal Year7
1989-1990, shall be that dollar amount equal to the sum of:8
* * *9
(d) That fiscal year's payment, computed as of the first of that fiscal year and10
projected to the middle of that fiscal year at the actuarially assumed interest rate,11
necessary to amortize changes in actuarial liability due to:12
(i) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph13
and in Subparagraph (e) of this Paragraph, actuarial gains and losses, if14
appropriate for the funding method used by the system as specified in R.S. 11:22, for15
each fiscal year beginning after June 30, 1988, such payments to be computed as an16
amount forming an annuity increasing at four and one-half percent annually over the17
later of a period of fifteen years from the year of occurrence or by the year 2029,18
such gains and losses to include any increases in actuarial liability due to governing19
authority granted cost-of-living increases.20
* * *21
(iv) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph22
and in Subparagraph (e) of this Paragraph, changes in actuarial accrued liability,23
computed using the actuarial funding method as specified in R.S. 11:22, due to24
legislation changing plan provisions, such payments to be computed in the manner25
and over the time period specified in the legislation creating the change or, if not26
specified in such legislation, as an amount forming an annuity increasing at four and27
one-half percent annually over the later of a period of fifteen years from the year of28
occurrence of the change or by the year 2029.29 SB NO. 632
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* * *1
(e) That fiscal year's payment, computed as of the first of the fiscal year2
and projected to the middle of that fiscal year at the actuarially-assumed3
interest rate, necessary to amortize the unfunded accrued liability created by4
enactment of R.S. 11: 249 with level dollar payments over a period of ten years,5
beginning in Fiscal Year 2011-2012.6
* * *7
§247. Automatic cost-of-living adjustments8
A.(1) Upon application for retirement or participation in the Deferred9
Retirement Option Plan, any member of a state or statewide retirement system may10
elect to receive an actuarially reduced retirement allowance plus an annual two and11
one-half percent cost-of-living adjustment. Such an election shall be irrevocable12
after the effective date of retirement or after the beginning date of participation in the13
Deferred Retirement Option Plan. The retirement allowance together with the cost-14
of-living adjustment shall be certified by the system actuary to be actuarially15
equivalent to the member's maximum or optional retirement allowance and shall be16
approved by the system's board of trustees.17
* * *18
D. Upon application for retirement or participation in the Deferred19
Retirement Option Plan and upon certifying that he is contemplating availing himself20
of the provisions of this Section, a member of a state or statewide retirement system21
may request that the system provide actuarial estimates of the benefits that such22
member would receive pursuant to Subsection A of this Section for the fifth, tenth,23
and fifteenth year following the member's anticipated retirement date. The system24
shall provide such actuarial estimates to the member upon request.25
E. This Section shall not be applicable to recipients of disability retirement26
benefits pursuant to R.S. 11:461 et seq. All other persons receiving disability27
retirement benefits pursuant to the provisions of this Title shall be eligible to elect28
this retirement option upon conversion to a service retirement, if applicable, under29 SB NO. 632
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the provisions of this Title for each state or statewide retirement system.1
* * *2
§249. Permanent benefit increases; state retirement systems3
A. The provisions of this Section shall apply to the following state4
retirement systems:5
(1) Louisiana School Employees' Retirement System.6
(2) Louisiana State Employees' Retirement System.7
(3) State Police Pension and Retirement System.8
(4) Teachers' Retirement System of Louisiana.9
B. Employer-funded increases. (1) Each eligible recipient whose benefit10
is based exclusively on service credited to the person on or before June 30, 2010,11
shall have his benefit increased permanently by two percent on January 1, 2017,12
and on January first in each odd-numbered calendar year thereafter.13
(2) To be eligible for the permanent benefit increases provided in this14
Subsection, a retiree:15
(a) Shall have been separated from employment and receiving a benefit16
for at least one year; and17
(b) Shall have attained at least age sixty-two.18
(3) A nonretiree survivor or beneficiary shall be eligible for the19
permanent benefit increases provided in this Subsection:20
(a) If the benefits have been received by the retiree or the beneficiary or21
both combined for at least one year; and22
(b) In no event before the retiree would have attained age sixty-two.23
(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to24
any person who receives disability benefits or who receives benefits based on the25
death of a disability retiree.26
C. Employee-funded increases. (1) Each eligible recipient whose benefit27
is based exclusively on service credited to the person on or after July 1, 2010,28
shall have his benefit increased permanently by two percent on January 1, 2021,29 SB NO. 632
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and on January first in each odd-numbered calendar year.1
(2) To be eligible for the permanent benefit increases provided in this2
Subsection, a retiree:3
(a) Shall have been separated from employment and receiving a benefit4
for at least one year; and5
(b) Shall have attained at least age sixty-five.6
(3) A nonretiree survivor or beneficiary shall be eligible for the7
permanent benefit increases provided in this Section:8
(a) If the benefits have been received by the retiree or the beneficiary or9
both combined for at least one year; and10
(b) In no event before the retiree would have attained age sixty-five.11
(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to12
any person who receives disability benefits or who receives benefits based on the13
death of a disability retiree.14
D. Additive increases. (1) Each eligible recipient whose benefit is based15
partially on service credited to the person on or before June 30, 2010, and16
partially on service credited to the person on or after July 1, 2010, shall have his17
benefit increased permanently by two percent on January 1, 2021, and on18
January first in each odd-numbered calendar year thereafter.19
(2) To be eligible for the additive permanent benefit increases provided20
in this Subsection, a retiree:21
(a) Shall have been separated from employment and receiving a benefit22
for at least one year; and23
(b) Shall have attained at least age sixty-five.24
(3) A nonretiree survivor or beneficiary shall be eligible for the25
permanent benefit increases provided in this Section:26
(a) If the benefits have been received by the retiree or the beneficiary or27
both combined for at least one year; and28
(b) In no event before the retiree would have attained age sixty-five.29 SB NO. 632
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(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to1
any person who receives disability benefits or who receives benefits based on the2
death of a disability retiree.3
(5) For each recipient, the portion of each increase considered to be4
employee-funded shall be equal to the ratio of years of service credited to the5
system member on or after July 1, 2010, to total years of service credited to him.6
E. Each such permanent benefit increase provided pursuant to this7
Section shall be payable based only on an amount not to exceed fifty thousand8
dollars of the recipient's annual benefit; however, for increases payable January9
1, 2019, and thereafter the fifty-thousand dollar limit shall be increased in an10
amount equal to the increase, if any, in the consumer price index, U.S. city11
average for all urban consumers (CPI-U), as prepared by the U.S. Department12
of Labor, Bureau of Labor Statistics, for the twenty-four month period ending13
on the June thirtieth immediately preceding the permanent benefit increase.14
* * *15
§446. Mode of payment where option elected16
* * *17
G. The actuarial equivalent options available pursuant to this Section18
shall be calculated without regard for R.S. 11:249.19
* * *20
§542. Experience account21
* * *22
G. The authority to credit and debit the experience account shall cease23
on June 29, 2010.24
* * *25
§783. Selection of option for method of payment after death of member26
* * *27
L. The actuarial equivalent options available pursuant to this Section28
shall be calculated without regard for R.S. 11:249.29 SB NO. 632
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* * *1
§883.1. Experience account2
* * *3
H. The authority to credit and debit the experience account shall cease4
on June 29, 2010.5
* * *6
§1150. Allowances; optional allowances7
* * *8
C. The actuarial equivalent options available pursuant to this Section9
shall be calculated without regard for R.S. 11:249.10
Section 2. R.S. 11:1145.1 and 1332 are hereby repealed.11
Section 3. Any retiree who elected to receive an actuarially reduced retirement12
allowance pursuant to R.S. 11:247 shall continue to be governed by the provisions in effect13
before the effective date of this Act. Each permanent benefit increase pursuant to the14
provisions of this Act shall be computed on the basis of the retiree's benefit on the date the15
increase is granted. If the permanent benefit increase is scheduled to be effective on the16
same day as the annual cost-of-living adjustment provided for in R.S. 11:247, the annual17
cost-of-living adjustment shall be calculated first.18
Section 4. The cost of this Act shall be funded with the employee contributions19
required pursuant to the provisions of Section 1 of this Act. The additional costs of this Act,20
if any, shall be funded with additional employer contributions in compliance with Article21
X, Section 29(E)(5)(b) of the Constitution of Louisiana.22
Section 5. This Act shall become effective on June 30, 2010; if vetoed by the23
governor and subsequently approved by the legislature, this Act shall become effective on24
June 30, 2010, or on the day following such approval by the legislature, whichever is later.25
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law provides for permanent increases in retiree benefits for the four state retirement
systems, which are: SB NO. 632
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(1)Louisiana School Employees' Retirement System.
(2)Louisiana State Employees' Retirement System.
(3)State Police Pension and Retirement System.
(4)Teachers' Retirement System of Louisiana.
Present law provides for timing and size of payment of such increases to be dependent upon
the experience of the retirement system investments in the market, the consumer price index,
and the funded level of the system.
Proposed law supersedes present law.
Proposed law, applicable to persons who are retired from these systems on June 30, 2010,
generally provides for a 2% benefit increase for eligible retirees in every odd-numbered year
beginning in 2017. Provides that an eligible retiree is one who:
(1) has been separated from service and receiving a benefit for one year; and
(2)has attained the age of 62.
Proposed law provides for additional employee contributions of 2% of pay for each active
member of these systems, beginning Jan. 1, 2011. Provides generally that a person who
retires from one of the systems on or after July 1, 2010, if he is otherwise eligible on the date
the benefit increase is effective, shall receive a 2% benefit increase in every odd-numbered
year beginning in 2021. Provides that an eligible retiree is one who:
(1) has been separated from service and receiving a benefit for one year; and
(2) has attained the age of 65.
Effective June 30, 2010.
(Amends R.S. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E); adds R.S.
11:102(B)(3)(e), 249, 446(G), 542(G), 783(L), 883.1(H), and 1150(C); repeals R.S.
11:1145.1 and 1339)