Louisiana House Bill HB59

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12

Caption

Provides relative to early payment of the unfunded accrued liability

Impact

The implementation of HB59 is expected to create a more structured approach to managing employer contributions for state retirement systems. By ensuring that employers' contributions are directly tied to amortization payments, the bill aims to enhance the financial stability of LASERS and STPOL. This could lead to improved solvency in these retirement systems as the state effectively manages its liabilities. The newly enacted procedures will require the Public Retirement Systems' Actuarial Committee to regularly adjudicate and adjust the contribution rates, ensuring that they remain aligned with the financial realities of these retirement systems.

Summary

House Bill 59 primarily addresses the payment procedures related to unfunded accrued liabilities (UAL) within Louisiana's State Employees' Retirement System (LASERS) and the State Police Pension and Retirement System (STPOL). The bill proposes a shift towards the direct appropriation of amortization payments, which are designed to reduce the financial burden of UAL. This means that starting in Fiscal Year 2013-2014, the state treasurer will directly handle payments to these systems, thereby streamlining the process and potentially making it more efficient for employers involved in funding these retirement plans.

Sentiment

Overall, the sentiment surrounding HB59 appears to be cautiously optimistic among its proponents. Supporters argue that the bill will enhance the state's accountability when dealing with pension liabilities, presenting a structured and proactive step towards long-term fiscal responsibility. However, there might also be some skepticism about the efficacy of such procedural reforms in truly addressing the underlying financial issues that have historically plagued these retirement systems.

Contention

While HB59 has garnered support for its potential to improve the management of state retirement contributions, some opposition may arise regarding the implications of changing the existing processes. Critics may raise concerns that the bill fails to substantially address the root causes of unfunded liabilities and might only serve as a temporary fix to a more entrenched issue in the state's retirement system funding. The effectiveness of direct payments could also be scrutinized, particularly if it leads to complications for employers in understanding their financial obligations.