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Regular Session, 2011
SENATE BILL NO. 6
BY SENATOR GAUTREAUX
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
TEACHERS RETIREMENT. Provides for continued payment of the unfunded accrued
liability portion of employer contributions after participation ceases. (6/30/11)
AN ACT1
To enact R.S. 11:887.1, relative to the Teachers' Retirement System of Louisiana; to provide2
for payment of unfunded accrued liability by an employer that withdraws some or3
all of its employees from the retirement system; to provide for all other withdrawal4
liabilities of such employers; to provide for determination of amount of withdrawal5
liability payment and collection of same; to provide an effective date; and to provide6
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. 11:887.1 is hereby enacted to read as follows:10
ยง887.1. Unfunded accrued liability; payment by employing agency11
A.(1)(a) Notwithstanding any other provision of law to the contrary, if12
an employing agency is authorized by law to terminate its participation in the13
retirement system and terminates participation for all of its employees, such14
employing agency shall remit to the retirement system its proportionate share15
of any unfunded actuarial accrued liability of the retirement system, as further16
provided in this Section.17 SB NO. 6
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(b) Notwithstanding any other provision of law to the contrary, if an1
employing agency terminates its participation in the retirement system as2
authorized by administrative action, contract, or other legally authorized3
action, and terminates participation for all of its employees, any entity4
authorizing such termination shall remit to the retirement system the employing5
agency's proportionate share of any unfunded actuarial accrued liability of the6
retirement system, as further provided in this Section.7
(c) Notwithstanding any other provision of law to the contrary, if an8
employing agency whose employees are not members of the retirement system,9
hires any employee previously employed by another employing agency whose10
employees were members of the retirement system there shall be no obligation11
on the part of the hiring employing agency for any unfunded accrued liability12
resulting from the employee's previous employment.13
(2) Notwithstanding any other provision of law to the contrary, if an14
employing agency terminates its participation in the retirement system for some15
of its employees by eliminating positions held by such employees through16
privatizing, outsourcing, contracting the service with a private employer, or any17
other means, the employer shall remit to the retirement system its proportionate18
share of any unfunded actuarial accrued liability, as further provided in this19
Section.20
(3)(a) Notwithstanding any other provision of law to the contrary, if a21
school or entity under an employer's jurisdiction is converted to any other22
governance model and, by administrative action, contract, or other legally23
authorized action, the prospective employing entity is permitted by the24
employer to terminate its participation or forgo participation in the retirement25
system, the employer shall remit to the retirement system the proportionate26
share of any unfunded actuarial accrued liability, as further provided in this27
Section.28
(b) Notwithstanding any other provision of law to the contrary, if a29 SB NO. 6
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school or entity under an employer's jurisdiction is transferred to any other1
entity and the receiving entity permits the prospective employing agency, as2
applicable, to terminate participation or forgo participation in the retirement3
system, the receiving entity shall remit to the retirement system the4
proportionate share of any unfunded actuarial accrued liability, as further5
provided in this Section.6
(4) For purposes of this Section, "proportionate share of any unfunded7
accrued liability" shall mean the unfunded accrued liability, if any, which is8
attributable to benefits accrued by or granted to employees and retirees of the9
employing agency which was established during the period of time that the10
employing agency was a participating employer with the retirement system or,11
with respect to Subsection (A)(3), during the period of time the school or entity12
was under the employer's jurisdiction.13
B.(1) The actuary employed by the retirement system shall determine14
the amounts required to be remitted pursuant to this Section as of the June15
thirtieth immediately prior to the respective date of the termination of16
participation, elimination of positions, or conversion or transfer of the school17
or entity.18
(2)(a) Should the entity responsible for payment disagree with the19
amounts determined by the retirement system actuary, such entity may appeal20
to the Public Retirement Systems' Actuarial Committee within thirty days of21
receipt of the invoice.22
(b) The legislative auditor shall perform an independent determination23
of the amounts due and in the event his calculation disagrees with that of the24
retirement system actuary, the committee shall meet and render a final25
determination. In the event the calculations agree, the invoice shall be due as26
provided in this Section.27
(3) The amounts due pursuant to this Section shall, at the option of the28
employing agency, be paid either in a lump sum or in equal monthly payments29 SB NO. 6
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with interest at the retirement system's actuarial valuation rate amortized over1
ten years or less.2
C. Should an employing agency fail to make payment pursuant to this3
Section timely, the amount due shall be collected in the same manner as4
authorized by R.S. 11:886 and 887.5
Section 2. The provisions of this Act shall apply to any employing agency6
participating in the retirement system in any plan year ending on or after June 30, 2011.7
Section 3. This Act shall become effective on June 30, 2011; if vetoed by the8
governor and subsequently approved by the legislature, this Act shall become effective on9
June 30, 2011, or on the day following such approval by the legislature, whichever is later.10
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren B. Bailey.
DIGEST
Gautreaux (SB 6)
Present law does not provide for a mechanism for an employer to withdraw some or all of
its employees from the Teachers' Retirement System of Louisiana (TRSL).
Proposed law relative to TRSL provides that if an employing agency is authorized by law
to terminate its participation in the retirement system and terminates its participation for
some or all of its employees, such employing agency shall remit to the retirement system its
share of any unfunded accrued liability (UAL) of the retirement system existing on the June
30
th
immediately prior to the date of the employing agency's termination.
Proposed law provides that the amounts due shall be determined by the actuary employed
by the system and shall be paid in a lump sum or amortized over ten years or less in equal
monthly payments with interest either at the retirement system's actuarial valuation rate, at
the option of the employer. Provides that the calculation shall account for any legacy costs
attributable to the employing agency's retirees.
Proposed law provides that should an employing agency fail to make payment the amount
due shall be collected in the same manner as authorized by present law (R.S. 11:886 and
887).
Effective June 30, 2011.
(Adds R.S. 11:887.1)