Louisiana House Bill HR149

Louisiana 2011 Regular Session

• Introduced: 6/21/11
• Passed: 6/23/11

Caption

Directs the state and statewide retirement systems to study the nature of irrevocable decisions and to provide the legislature with solutions for allowing members and retirees to revoke certain elections under certain circumstances

Impact

The study mandated by HR149 could significantly impact how state and local retirement systems manage members' choices relating to their benefits. Given that the current framework heavily relies on irrevocable decisions to maintain the actuarial soundness of defined benefit plans, any changes resulting from the study could lead to a re-evaluation of these plans. If retroactive revocation options are identified, this could set a precedent affecting the stability and administration of retirement benefits throughout the various public employee systems in Louisiana.

Summary

House Resolution 149 (HR149) directs the state and statewide retirement systems in Louisiana to study the implications of irrevocable decisions made by members regarding their retirement benefits. This bill stems from the recognition that public employees often face circumstances where previously made irrevocable decisions yield unfair consequences for the individual or their beneficiaries. The resolution is intended to explore the potential for allowing revocations of certain elections, such as choosing beneficiaries, selecting payment options, or participating in specific retirement plans under defined circumstances.

Sentiment

The sentiment surrounding HR149 appears to be cautiously optimistic, with proponents recognizing the potential benefits of addressing the needs of public employees who find themselves in changing circumstances. However, there are underlying concerns regarding the complexities that may arise from allowing revocations. Stakeholders may worry about the unintended consequences such flexibility could have on the retirement systems' stability, indicating a need for a careful, well-measured approach to any proposed changes.

Contention

HR149 signals a crucial discussion point involving the balance between protecting the integrity of retirement systems and recognizing the personal needs of members. Notably, critics may argue that enabling revocations could undermine the foundational principle of actuarial soundness, which mandates certainty in decision-making processes for the sustainability of defined benefit plans. The exploration of this topic may reveal differing opinions on prioritizing member equity versus the overall financial health of public retirement systems.