Louisiana House Bill HB495

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11
• Report Pass: 6/6/11
• Engrossed: 6/13/11
• Report Pass: 6/14/11
• Enrolled: 6/19/11
• Vetoed: 7/1/11

Caption

Relative to funding of state retirement systems, provides for changes in the remitting of payments on the Unfunded Accrued Liability (UAL) (EN -$25,678,000 FC GF & LF EX)

Impact

The implications of HB 495 involve a shift in how employer contributions are calculated and remitted, specifically emphasizing a lump sum payment for amortization payments which could affect budgeting and financial planning for schools and other participating employers. This change means that employers will have more predictable financial obligations, potentially reducing the risks associated with fluctuating contributions, impacting the integrity and management of state retirement funds. Schools and employers may find it easier to allocate funds knowing there is a set process and timeline for these payments.

Summary

House Bill 495, introduced by Representative Pearson and Senator Gautreaux, aims to amend the existing laws concerning employer contributions to state retirement systems, particularly focusing on the Louisiana Teachers' Retirement System. The bill stipulates modifications regarding how payments toward the Unfunded Accrued Liability (UAL) are handled, allowing for direct appropriation of certain amortization payments from available sources directly to the retirement system. This is intended to streamline financial obligations and enhance the stability of the retirement systems in question.

Sentiment

The reception of HB 495 has been generally positive, with supporters arguing that it provides necessary reforms for the financial stability of state retirement systems. Proponents believe that these changes will lead to better funding practices and enhance the trust in state-managed retirement systems. However, there may be concerns among dissenting voices regarding the potential impact on local budgets and the long-term sustainability if the direct appropriations do not adequately cover the required liabilities.

Contention

Notable points of contention regarding HB 495 focus on the long-term financial implications for local governments and the Teachers' Retirement System. Critics point out that the direct appropriation of amortization payments could place a burden on state revenues, which might affect the overall budget intended for services. Additionally, there could be apprehensions about whether the new contribution calculations offer a sustainable solution, as it alters how financial obligations are to be met and could change the overall risk profile for pension-related liabilities.