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Regular Session, 2012
SENATE BILL NO. 23
BY SENATOR GUILLORY
RETIREMENT BENEFITS. Provides for a permanent benefit increase for certain retired
state employees. (8/1/12)
AN ACT1
To amend and reenact R.S. 11:102.1(B)(4) and 542(A)(2)(a), (C)(4)(a), (b)(introductory2
paragraph), and (c)(i), and (F), and to repeal R.S. 11:542(C)(4)(d) and (e), relative3
to application of excess investment earnings of the Louisiana State Employees'4
Retirement System; to provide for post-retirement benefit increases funded from5
such earnings; and to provide for related matters.6
Notice of intention to introduce this Act has been published.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 11:102.1(B)(4) and 542(A)(2)(a), (C)(4)(a)(introductory paragraph),9
(b) (introductory paragraph), and (c)(i), and (F), are hereby amended and reenacted to read10
as follows:11
§102.1. Consolidation of amortization payment schedules; Louisiana State12
Employees' Retirement System13
* * *14
B. Original amortization base.15
(1) * * *16
(4) In any year in which the system exceeds its actuarially-ass umed rate of17 SB NO. 23
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return, after allocation to the experience account as provided in R.S.1
11:542(A)(2)(a), the first fifty million dollars of excess returns shall be applied to2
the remaining balance of the original amortization base established in this3
Subsection. After such application, the net remaining liability shall be reamortized4
over the remaining amortization period with annual payments calculated as provided5
in this Subsection or as otherwise provided by law.6
* * *7
§542. Experience account8
A.(1) * * *9
(2) The experience account shall be credited as follows:10
(a) To the extent permitted by Paragraph (3) of this Subsection and after11
allocation to the consolidated amortization bases as provided in R.S. 11:102.1, an12
amount not to exceed fifty percent of the remaining balance of the prior year's net13
investment experience gain as determined by the system's actuary.14
* * *15
C.(1) * * *16
(4)(a) Except as provided in Subparagraph (c) of this Paragraph, in order to17
be eligible for any permanent benefit increase payable on or before June 30, 2009,18
there must be the funds available in the experience account to pay for such an19
increase, and a retiree:20
* * *21
(b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree22
beneficiary shall be eligible for the permanent benefit increase payable on or before23
June 30, 2009:24
* * *25
(c)(i) The provisions of Items (a)(ii), and (b)(ii), (d)(ii), and (e)(ii) of this26
Paragraph shall not apply to any person who receives disability benefits from this27
system, or who receives benefits based on the death of a disability retiree of this28
system.29 SB NO. 23
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* * *1
F. (1)The permanent benefit increase which is authorized by Subsection C of2
this Section shall be limited to the lesser of either two percent or an amount as3
determined in Paragraph (C)(2) of this Section in or for any year in which the system4
does not earn an actuarial rate of return of at least eight and one-quarter percent5
interest on the investment of the system's assets.6
(2) No permanent benefit increase shall be authorized based on any actuarial7
valuation in which both of the following apply:8
(a) The system fails to earn an actuarial rate of return which exceeds the9
board-approved actuarial valuation rate.10
(b) The system is less than eighty percent funded.11
Section 2. R.S. 11:542(C)(4)(d) and (e) are hereby repealed.12
Section 3. The provisions of this Act shall be applied to the preparation of any13
annual actuarial valuation for the system on or after the effective date of this Act.14
Section 4. The cost of this Act, if any, shall be funded with additional employer15
contributions in compliance with Article X, Section 29(F) of the Constitution of Louisiana.16
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law provides, after allocation of $100 million for accelerated reduction of certain
unfunded accrued liabilities (UAL) of the Louisiana State Employees' Retirement system
(LASERS), 50% of the net investment experience gain of LASERS shall be credited to the
system's experience account, which is used for funding retiree benefit increases.
Present law provides that the remaining 50% of gain forms an amortization credit used to
reduce the required employer contribution over the 30-year amortization period.
Proposed law provides for 50% of the net investment experience gain of the system to be
credited to the system's experience account before allocation to reduce the UAL or for
forming an amortization credit.
Present law provides for permanent benefit increases to be paid to retirees of LASERS when
the balance in the experience account is sufficient to provide full actuarial funding of the
increase.
Proposed law retains present law.
Present law provides that, for any increase payable on or after July 1, 2009, an eligible
benefit recipient shall be drawing a benefit based on the service of a retiree who has or SB NO. 23
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would have attained the age of 60 on the date the increase is payable.
Proposed law provides eligibility for an increase for recipients whose benefits are based on
the service of retirees who have or would have attained the age of 55 on the date the increase
is payable.
Present law prohibits an increase in benefits from experience account funds in any year in
which the system's actuarial rate of return fails to exceed the board-approved actuarial
valuation rate (currently 8.25%) and in which the system is less than 80% funded.
Proposed law deletes these prohibitions and allows a benefit increase in years in which the
system is below 80% funded and fails to exceed the valuation rate of return.
Proposed law provides that the cost of proposed law shall be funded with additional
employer contributions.
Proposed law provides that the provisions of proposed law shall be applied to the preparation
of any annual actuarial valuation for the system on or after the effective date.
Effective August 1, 2012.
(Amends R.S. 11:102.1(B)(4) and 542(A)(2)(a), (C)(4)(a)(intro para) (b)(intro para), and
(c)(i), and (F); repeals R.S. 11:542(C)(4)(d) and (e))