HLS 12RS-329 ORIGINAL
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Regular Session, 2012
HOUSE BILL NO. 59
BY REPRESENTATIVE PEARSON
RETIREMENT/STATE SYSTEMS: Provides relative to early payment of the unfunded
accrued liability
AN ACT1
To amend and reenact R.S. 11:102(B)(1) and (C)(1)(introductory paragraph) and to enact2
R.S. 11:102(D), relative to certain state retirement systems; to provide relative to3
employer contributions; to provide for direct appropriation of certain amortization4
payments; to provide for an effective date; and to provide for related matters.5
Notice of intention to introduce this Act has been published6
as provided by Article X, Section 29(C) of the Constitution7
of Louisiana.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 11:102(B)(1) and (C)(1)(introductory paragraph) are hereby amended10
and reenacted and R.S. 11:102(D) is hereby enacted to read as follows:11
ยง102. Employer contributions; determination; state systems12
* * *13
B.(1) Except as provided in Subsection Subsections C and D of this Section14
for the Louisiana State Employees' Retirement System, except as provided in15
Subsection D of this Section for the State Police Pension and Retirement System, and16
except as provided in R.S. 11:102.1 and 102.2 and in Paragraph (5) of this17
Subsection, for each fiscal year, commencing with Fiscal Year 1989-1990, for each18
of the public retirement systems referenced in Subsection A of this Section, the19
legislature shall set the required employer contribution rate equal to the actuarially20 HLS 12RS-329 ORIGINAL
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required employer contribution, as determined under Paragraph (3) of this1
Subsection, divided by the total projected payroll of all active members of each2
particular system for the fiscal year. Each entity funding a portion of a member's3
salary shall also fund the employer's contribution on that portion of the member's4
salary at the employer contribution rate specified in this Subsection.5
* * *6
C.(1) In addition to the requirements of Subsection D of this Section, this7
This Subsection shall be applicable to the Louisiana State Employees' Retirement8
System effective for the June 30, 2010, system valuation and beginning Fiscal Year9
2011-2012. For purposes of this Subsection, "plan" or "plans" shall mean a subgroup10
within the system characterized by the following employee classifications:11
* * *12
D.(1)(a) For the Louisiana State Employees' Retirement System and for the13
State Police Pension and Retirement System, beginning with the system valuation14
for the fiscal year ending June 30, 2012, the valuation adopted by the Public15
Retirement Systems' Actuarial Committee shall, in addition to the rates calculated16
pursuant to the provisions of Subsections B and C of this Section, include a separate17
calculation of each of the following:18
(i)(aa) The amortization payment provided for in Subparagraph (B)(3)(b) of19
this Section.20
(bb) The amortization payment provided for in Subparagraph (B)(3)(b) of21
this Section, without the midyear interest payment.22
(ii)(aa) The amortization payment provided for in Subparagraph (B)(3)(d)23
of this Section.24
(bb) The amortization payment provided for in Subparagraph (B)(3)(d) of25
this Section, without the midyear interest payment.26
(iii) An adjusted employer contribution rate which has been reduced to27
reflect the direct amortization payments provided for in this Subsection.28 HLS 12RS-329 ORIGINAL
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(b) As used in this Subparagraph, the term "employer" shall mean an1
"employer" as defined in R.S. 11:403.2
(2)(a) Beginning with payments due in Fiscal Year 2013-2014, each year's3
amortization payments required pursuant to Subparagraphs (B)(3)(b) and (d) of this4
Section and calculated as provided in Subitems (1)(a)(i)(bb) and (ii)(bb) of this5
Subsection shall be made in a lump sum payment as soon as practicable after July6
first.7
(b) The treasurer shall remit such payments directly to the system from any8
available source of monies otherwise appropriated to fund any employer. Each9
employer's proportionate share of the amortization payments calculated as provided10
in Subitems (1)(a)(i)(aa) and (ii)(aa) of this Subsection shall be deducted from any11
funds appropriated to or for the use of the employer. The funds appropriated or12
allocated to each employer, net of the amortization payments being remitted to the13
system by the treasurer, shall be made available to the employer in equal periodic14
installments. Such installments shall not be made less frequently than on a monthly15
basis.16
(3) The employer contribution rate to be paid by each employer shall be the17
amount calculated in Item (1)(a)(iii) of this Subsection.18
(4) By the May first prior to the July first commencement of the fiscal year,19
the system shall provide the treasurer with a statement of the amortization payment20
to be withheld on behalf of each employer.21
* * *22
Section 2. As soon as practicable after the effective date of this Act, the Public23
Retirement Systems' Actuarial Committee shall meet to adopt a revised valuation for the24
system, prepared as provided this Act. This valuation shall include a revised employer25
contribution rate for each plan within the system to be utilized in the fiscal year which begins26
on July 1, 2012.27 HLS 12RS-329 ORIGINAL
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Section 3. This Act shall become effective on June 30, 2012; if vetoed by the1
governor and subsequently approved by the legislature, this Act shall become effective on2
June 30, 2012, or on the day following such approval by the legislature, whichever is later.3
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. 59
Abstract: Relative to the La. State Employees' Retirement System (LASERS) and the State
Police Pension and Retirement System (STPOL), provides for the direct payment of
funds for the payment of Unfunded Accrued Liability (UAL).
Present law provides for calculation of each fiscal year's actuarially required employer
contribution for each state retirement system, including LASERS and STPOL. Provides for
this contribution amount to be divided by projected payroll to produce the actuarially
required employer contribution rate.
Present law further requires LASERS employers to pay individualized normal cost payments
and amortization payments depending on which plans within the system its employees fall
into. For purposes of present law the individual LASERS plans are as follows:
(1)Regular members.
(2)Enforcement personnel employed by the office of alcohol and tobacco control within
the Dept. of Public Safety and Corrections (DPS&C).
(3)Peace officers employed by DPS&C in the office of state police, other than state
troopers.
(4)Judges.
(5)Wildlife agents employed by the Dept. of Wildlife and Fisheries.
(6)Corrections personnel in LASERS secondary component.
(7)Corrections personnel in LASERS primary component.
(8)Legislators, the governor, and the lieutenant governor.
(9)Bridge police employed by the Crescent City Connection Division of the Dept. of
Transportation and Development (DOTD).
Present law requires, for accounting purposes, that each plan shall be allocated system assets
in proportion to the accrued liability of each plan existing on June 30, 2010. Beginning with
FY 2010-2011 and thereafter, each plan shall be allocated investment gains and losses in
proportion to its individual assets.
Proposed law retains present law.
Proposed law applies only to LASERS and STPOL. Provides that, beginning in FY
2013-2014, the treasurer will pay certain amortization payments directly to LASERS and HLS 12RS-329 ORIGINAL
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STPOL. Provides for the employers' contribution rate for LASERS and STPOL to be
reduced to reflect the direct payments. Provides for the treasurer to deduct each employer's
proportionate share of the amortization payment from the monies appropriated to or for the
use of the employers. Requires LASERS and STPOL to notify the treasurer regarding
amortization payments to be withheld.
Proposed law requires the Public Retirement Systems' Actuarial Committee (PRSAC) to
meet as soon as practicable after July 1, 2012, to adopt a revised valuation for the system,
prepared in accordance with proposed law. This valuation shall include a revised employer
contribution rate for each plan within the system to be utilized in the fiscal year which begins
on July 1, 2012.
Effective June 30, 2012.
(Amends R.S. 11:102(B)(1) and (C)(1)(intro. para.); Adds R.S. 11:102(D))