HLS 12RS-342 ORIGINAL
Page 1 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2012
HOUSE BILL NO. 1132
BY REPRESENTATIVE PEARSON
RETIREMENT/STATE SYSTEMS: Provides relative to the experience accounts for the
Louisiana State Employees Retirement System and the Teachers' Retirement System
of Louisiana
AN ACT1
To amend and reenact R.S. 11:542(A)(2) and (3), (B)(introductory paragraph), and (F)(2),2
883.1(A)(2) and (3), (B)(introductory paragraph), and (G)(2) and to enact Subpart3
P of Part II of Chapter 4 of Subtitle I of Title 11 of the Louisiana Revised Statutes4
of 1950, to be comprised of R.S. 11:331, and R.S. 11:542(A)(4), (B)(4), (F)(3), and5
883.1(A)(4), (B)(4), and (G)(3), relative to certain members of the Louisiana State6
Employees' Retirement System and certain postsecondary education members of the7
Teachers' Retirement System of Louisiana; to provide relative to experience8
accounts; to provide for calculations of credits and debits; to provide for debits; to9
provide for subaccounts; to provide definitions; to provide for an effective date; to10
provide for revised valuations for the systems; and to provide for related matters.11
Notice of intention to introduce this Act has been published12
as provided by Article X, Section 29(C) of the Constitution13
of Louisiana.14
Be it enacted by the Legislature of Louisiana:15
Section 1. R.S. 11:542(A)(2) and (3), (B)(introductory paragraph), and F(2),16
883.1(A)(2) and (3), (B)(introductory paragraph), and (G)(2) are hereby amended and17
reenacted and to enact Subpart P of Part II of Chapter 4 of Subtitle I of Title 11 of the18
Louisiana Revised Statutes of 1950, comprised of R.S. 11:331, and R.S. 11:542(A)(4),19
(B)(4), and (F)(3), and 883.1(A)(4), (B)(4), and (G)(3) are hereby enacted to read as follows:20 HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 2 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
SUBPART P. LEGISLATIVE INTENT1
§331. Legislative intent; certain Acts2
The Legislature of Louisiana hereby declares that the intent of the provisions3
of this Title that were enacted by the Act that originated as House Bill No. ____of4
the 2012 Regular Session is to attain and maintain the actuarial soundness of state5
and statewide systems as required by the Constitution of Louisiana, Art. X, Section6
29.7
* * *8
§542. Experience account9
A.10
* * *11
(2) The experience account shall be credited as follows:12
(a) To the extent permitted by Paragraph Paragraphs (3) and (4) of this13
Subsection and after allocation to the consolidated amortization bases as provided14
in R.S. 11:102.1, an amount not to exceed fifty percent of the remaining balance of15
the prior year's net investment experience gain as determined by the system's actuary.16
(b) To the extent permitted by Paragraph Paragraphs (3) and (4) of this17
Subsection, an amount not to exceed that portion of the system's net investment18
income attributable to the balance in the experience account during the prior year.19
(3)(a) The experience account shall contain two subaccounts: the "hazardous20
duty" subaccount and the "rank-and-file" subaccount. The liabilities attributable to21
the active members and retirees covered by the two subaccounts shall be determined22
in each actuarial valuation beginning with the June 30, 2012, valuation, and the ratio23
of each group's liabilities to the total liability shall be determined. The experience24
account allocation for any year shall be divided between the subaccounts based on25
this ratio.26
(b)(i) The hazardous duty subaccount shall be applicable to members from27
any of the following:28 HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 3 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(aa) Public safety service employees referred to as "member" or "members"1
in R.S. 11:601(B).2
(bb) Peace officers employed by the Department of Public Safety and3
Corrections, office of state police, other than state troopers, as provided in R.S.4
11:444(A)(2)(b).5
(cc) Personnel employed by the Department of Revenue, office of alcohol6
and tobacco control, as provided in R.S. 11:444(A)(2)(c).7
(dd) Wildlife agents.8
(ee) Bridge police.9
(ff) Members of the Hazardous Duty Services Plan.10
(ii) The rank-and-file subaccount shall be applicable to any member not11
covered by Item (i) of this Subparagraph.12
(4) In no event shall the amount in the experience account either subaccount13
exceed the reserve necessary to grant two permanent benefit increases as provided14
in Subsection C of this Section.15
B. The experience account subaccounts shall be debited as follows:16
* * *17
(4) The rank-and-file subaccount shall be debited for its proportionate share18
of the system's net investment experience losses during the prior year. The share of19
such losses shall be based on the ratio determined pursuant to Paragraph (A)(3) of20
this Section.21
* * *22
F. 23
* * *24
(2) No permanent benefit increase for retirees covered by the hazardous duty25
subaccount shall be authorized based on any actuarial valuation in which both of the26
following apply:27
(a) The system fails to earn an actuarial rate of return which exceeds the28
board-approved actuarial valuation rate.29 HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 4 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(b) The system is less than eighty percent funded.1
(3) No permanent benefit increase for retirees covered by the rank-and-file2
subaccount shall be authorized based on any actuarial valuation in which the system3
is less than one hundred percent funded.4
* * *5
§883.1. Experience account6
A.7
* * *8
(2) The experience account shall be credited as follows:9
(a) To the extent permitted by Paragraph Paragraphs (3) and (4) of this10
Subsection and after allocation to the consolidated amortization bases as provided11
in R.S. 11:102.2, an amount not to exceed fifty percent of the remaining balance of12
the prior year's net investment experience gain as determined by the system's actuary.13
(b) To the extent permitted by Paragraph Paragraphs (3) and (4) of this14
Subsection, an amount not to exceed that portion of the system's net investment15
income attributable to the balance in the experience account during the prior year.16
(3)(a) The experience account shall contain two subaccounts: the17
"postsecondary education" subaccount and the "K through 12" subaccount. The18
liabilities attributable to the active members and retirees covered by the two19
subaccounts shall be determined in each actuarial valuation beginning with the June20
30, 2012, valuation, and the ratio of each group's liabilities to the total liability shall21
be determined. The experience account allocation for any year shall be divided22
between the subaccounts based on this ratio.23
(b)(i) The postsecondary education subaccount shall be applicable to24
members from any of the following:25
(aa) An academic or administrative employee of a public institution of higher26
education.27
(bb) An employee of the Board of Regents, the Board of Supervisors for the28
University of Louisiana System, the Board of Supervisors of Louisiana State29 HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 5 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
University and Agricultural and Mechanical College, or the Board of Supervisors1
of Southern University and Agricultural and Mechanical College, or of the successor2
to one of these boards.3
(cc) An employee of any other constitutionally established board which4
manages institutions of postsecondary education.5
(ii) The K through 12 subaccount shall be applicable to any member not6
covered by Item (i) of this Subparagraph.7
(4) In no event shall the amount in the experience account exceed the reserve8
necessary to grant two permanent benefit increases as provided in Subsection C of9
this Section.10
B. The experience account subaccounts shall be debited as follows:11
* * *12
(4) The postsecondary education subaccount shall be debited for its13
proportionate share of the system's net investment experience losses during the prior14
year. The share of such losses shall be based on the ratio determined pursuant to15
Paragraph (A)(3) of this Section.16
* * *17
G.18
* * *19
(2) No permanent benefit increase for retirees of the K through 1220
subaccount shall be authorized based on any actuarial valuation in which both of the21
following apply:22
(a) The system fails to earn an actuarial rate of return which exceeds the23
board-approved actuarial valuation rate.24
(b) The system is less than eighty percent funded.25
(3) No permanent benefit increase for retirees of the postsecondary education26
subaccount shall be authorized based on any actuarial valuation in which the system27
is less than one hundred percent funded.28
* * *29 HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 6 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Section 2.(A) As soon as practicable after the effective date of this Act, the Public1
Retirement Systems' Actuarial Committee shall meet to adopt a revised valuation for the2
system prepared as provided in R.S. 11:102. This valuation shall include a revised employer3
contribution rate for each plan within the system to be utilized in the fiscal year which begins4
on July 1, 2012. This valuation shall incorporate all changes enacted by the Legislature in5
the 2012 Regular Session. 6
(B) The Public Retirement Systems Actuarial Committee is hereby authorized to7
adopt an actuarial valuation or revised employer contribution rate to be utilized in the fiscal8
year which begins on July 1, 2012, calculated in accordance with R.S. 11:102, which has9
been prepared on behalf of the division of administration by a member of the American10
Academy of Actuaries who meets the qualification requirements of the academy to issue a11
particular statement of actuarial opinion.12
Section 3. If a final judgment declares any of the provisions of this Act13
unconstitutional or unconstitutional as applied to a particular class of employees, the other14
provisions of this Act shall remain in effect and also shall be applicable to all employees15
who are not in the class.16
Section 4. This Act shall become effective on June 30, 2012 if vetoed by the17
governor and subsequently approved by the legislature, this Act shall become effective on18
June 30, 2012 or on the day following such approval by the legislature, whichever is later.19
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HB No. 1132
Abstract: Provides for the crediting and debiting of experience accounts in the Louisiana
State Employees' Retirement System (LASERS) and the Teachers' Retirement
System of Louisiana (TRSL).
Present law establishes experience accounts in LASERS and TRSL to fund cost-of-living
adjustments for reitrees of each system.
Proposed law provides for division of the experience accounts into subaccounts.
Relative to LASERS, proposed law divides the experience account into a "hazardous duty"
subaccount and a "rank-and-file" subaccount and provides definitions for what types of HLS 12RS-342 ORIGINAL
HB NO. 1132
Page 7 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
employees fall into each subaccount. Relative to TRSL, proposed law divides the
experience account into a "postsecondary education" subaccount and a "K through 12"
subaccount.
Present law authorizes the debiting of experience accounts by the following amounts:
(1)An amount equal to that portion of the system's net investment loss attributable to
the balance in the experience account during the prior year.
(2)An amount sufficient to fund a permanent benefit increase.
Proposed law retains present law and further authorizes the debiting of experience
subaccounts as follows:
(3)The rank-and-file subaccount and the postsecondary education subaccount shall each
be debited by its proportionate share of the system's net investment experience losses
during the prior year.
Present law provides that no benefit increase shall be authorized if a system's actuarial
valuation shows both of the following:
(1)The system failed to earn an actuarial rate of return in excess of the board approved
rate.
(2)The system is less than 80% funded.
Proposed law retains present law for the hazardous duty and the K through 12 subaccounts.
Proposed law requires that no benefit increase shall be authorized for the rank-and-file or
the postsecondary education subaccount members if the actuarial valuation for the system
shows that the system as a whole is less than 100% funded.
Further requires the Public Retirement Systems' Actuarial Committee (PRSAC) to meet as
soon as practicable to adopt a revised actuarial valuation for TRSL and to adopt a revised
employer contribution rate taking into account all changes to the law enacted by the
legislature in the 2012 R.S.
Further authorizes PRSAC to adopt an actuarial valuation or revised employer contribution
rate proposed by the division of administration to be utilized in FY 2012-2013, which has
been prepared by a qualified actuary from the American Academy of Actuaries.
Effective June 30, 2012.
(Amends R.S. 11:542(A)(2) and (3), (B)(intro. para.), and (F)(2), and 883.1(A)(2) and (3),
(B)(intro. para.), and (G)(2); Adds R.S. 11:331, 542(A)(4), (B)(4), and (F)(3), and
883.1(A)(4), (B)(4), and (G)(3))