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Regular Session, 2010
SENATE CONCURRENT STUDY REQUEST NO. 4
BY SENATOR B. GAUTREAUX AND REPRESENTATIVES PEARSON AND
ROBIDEAUX
COMMITTEE STUDIES. Study the appropriate manner in which to provide for regular and
dependable permanent benefit increases for retirees of the state retirement systems, designed
to preserve purchasing power while uncoupling these benefit increases from investment
returns.
A CONCURRENT STUDY REQUEST1
To request the Senate Committee on Retirement and the House Committee on Retirement2
to meet and function as a joint committee to study the appropriate manner in which3
to provide for regular and dependable permanent benefit increases for retirees of the4
state retirement systems that are designed to provide preservation of purchasing5
power while uncoupling these benefit increases from investment returns. 6
WHEREAS, in their roles as the chairmen of the Senate and House committees on7
retirement and ex officio members of the system boards of trustees, Senator Butch Gautreaux8
and Representative Joel Robideaux committed to introducing legislation in the 2010 Regular9
Session that would provide retirees of the Louisiana State Employees' Retirement System10
(LASERS) and the Teachers' Retirement System of Louisiana (TRSL) with systematic11
permanent benefit increases; and 12
WHEREAS, it was determined by the Louisiana Legislative Auditor's Office that13
cost-of-living adjustments paid under the current mechanism known as the "experience14
account" have averaged approximately one percent per year over the eighteen-year history15
of the mechanism; and16
WHEREAS, it was further determined by the Louisiana Legislative Auditor's Office17
that in this eighteen-year history of granting cost-of-living adjustments, using the experience18 SCSR NO. 4
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account mechanism has added $833 million of unfunded accrued liabilities to LASERS and1
$1.743 billion of unfunded accrued liabilities to TRSL; and2
WHEREAS, one of the key recommendations for preserving the defined benefit plan,3
according to an in-depth study conducted by Buck Consulting relative to the possible4
implementation of a defined contribution plan for the four state retirement systems in5
Louisiana, was to disconnect permanent benefit increases for retirees from excess investment6
returns; and7
WHEREAS, the trustees of the four state retirement systems consider the8
preservation of the defined benefit plans a matter of paramount importance pursuant to their9
fiduciary duty; and10
WHEREAS, Senate Bill No. 632 of the 2010 Regular Session, introduced by Senator11
Butch Gautreaux and Representative Joel Robideaux, was formulated by using the past12
history of the experience accounts relative to increases for retirees and costs to the employer,13
and structured a new method for granting and funding the retiree increases; and14
WHEREAS, the passage of Senate Bill No. 632 would have provided retirees with15
a two percent increase each odd-numbered year beginning January 1, 2017, and would have16
required active employees and future employees to pay an increased employee contribution17
rate in order to fund these increases; and18
WHEREAS, the four state retirement systems expressed serious objections to Senate19
Bill No. 632 and requested the issue be studied; and20
WHEREAS, Senator Butch Gautreaux acquiesced in the request of the retirement21
systems, deferring Senate Bill No. 632 and requesting that a study resolution be filed instead.22
THEREFORE, the Legislature of Louisiana requests that the Senate Committee on23
Retirement and the House Committee on Retirement meet and function as a joint committee24
to study the appropriate manner in which to provide permanent benefit increases to the25
retirees of the four state retirement systems and to develop recommendations to be submitted26
to the Louisiana Legislature on or before April 1, 2011.27
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren B. Bailey.
DIGEST SCSR NO. 4
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B. Gautreaux SCSR No. 4
Requests the committees on retirement to study the appropriate manner in which to provide
for regular and dependable permanent benefit increases for retirees of the state retirement
systems.