Louisiana House Bill HB1132

Louisiana 2012 Regular Session

• Introduced: 4/3/12
• Refer: 4/4/12

Caption

Provides relative to the experience accounts for the Louisiana State Employees Retirement System and the Teachers' Retirement System of Louisiana

Impact

The bill's modifications carry significant implications for state law, particularly in how pension benefits are calculated and distributed among various employee groups. The new provisions for separate subaccounts mean that each category of employee will have its financial adjustments governed by stricter actuarial guidelines. Specifically, benefits will only increase for members of the rank-and-file and postsecondary subaccounts if the overall system is at least 100% funded, contrasting with the more lenient 80% requirement for other subaccounts. This change aims to bolster the actuarial stability of the retirement systems by exerting stricter funding requirements before benefits increases are permitted.

Summary

House Bill 1132 amends regulations related to the experience accounts of the Louisiana State Employees Retirement System (LASERS) and the Teachers' Retirement System of Louisiana (TRSL). The bill introduces the concept of subaccounts within these experience accounts to better manage and allocate funds for cost-of-living adjustments for retirees. It creates specific subaccounts like 'hazardous duty' and 'rank-and-file' for LASERS and 'postsecondary education' and 'K through 12' for TRSL. This restructuring aims to facilitate more precise tracking of liabilities and fund allocation for various employee categories within the systems.

Sentiment

The sentiment surrounding HB 1132 appears cautiously positive, with recognition that the protection of pension fund solvency is a necessary priority. Supporters argue that the bill is a step in the right direction to ensure financial accountability and sustainability in public retirement systems. However, some stakeholders express concern over the stringent funding requirements, suggesting they could limit pension increases even when fiscal conditions improve. The potential for instability or delayed benefits has sparked debate, highlighting the need for careful oversight in managing state retirement funds.

Contention

Some points of contention focus on the new requirements imposed for benefit increases, particularly for those in the vulnerable 'rank-and-file' and 'postsecondary education' subaccounts. Critics argue that setting the funding trigger at 100% might limit the ability of those who have dedicated years of service in these roles to receive timely benefits. There is also apprehension that this bill may set a precedent for future legislation that could further restrict benefits based on funding conditions, leading to vouchers or incentives that might not align with the needs of retirees.