Provides for a permanent benefit increase for certain retired state employees. (8/1/12) (OR +$61,000,000 UAL)
The implications of SB 23 could lead to significant changes in how retired state employees receive benefits. Under the previous law, strict thresholds for returns on investments and funding levels were necessary before any benefit increase could take place. The bill removes certain prohibitions that necessitated an actuarial rate of return exceeding specific benchmarks, thereby allowing benefit increases even in years of below-average performance of the retirement system. This provision could give retirees greater security and potential increases in their benefits.
Senate Bill 23 proposes a permanent benefit increase for certain retired state employees under the Louisiana State Employees' Retirement System (LASERS). The bill amends existing statutes related to the allocation of excess investment earnings of LASERS, enabling a portion of these earnings to fund post-retirement benefit increases. Specifically, it aims to credit 50% of the net investment experience gains to the experience account prior to other allocations, potentially increasing benefit amounts available to retirees without solely focusing on unwinding accrued liabilities.
The general sentiment surrounding SB 23 appears to be supportive among advocates for retired state employees who argue that the bill addresses their needs for financial stability post-retirement. However, there may also be concerns from fiscal conservatives who worry about the long-term sustainability of funding such increases, particularly if they occur in financially lean years. This division mirrors a larger debate over the balancing act of providing for public employees while maintaining fiscal responsibility.
Notable points of contention include the manner in which benefits can be adjusted relative to the performance of the investment system. Critics may argue that allowing increases during years of underfunding poses risks to the overall financial health of LASERS. Proponents, however, contend that the fund's performance should not solely dictate the livelihoods of retirees and stress the importance of providing security for those who have served in public service roles.