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Regular Session, 2012
SENATE BILL NO. 25
BY SENATOR GUILLORY
RETIREMENT BENEFITS. Provides a regular schedule for permanent benefit increases
for retirees of the state retirement systems. (2/3 - 10s29(F)) (6/30/12)
AN ACT1
To amend and reenact R.S. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E), to2
enact R.S. 11:102(B)(3)(e), 249, 446(G), 542(G), 783(L), 883.1(H), and 1150(C),3
and to repeal R.S. 11:1145.1 and 1332, relative to state retirement systems; to4
provide for contributions; to provide for permanent benefit increases; to provide for5
an effective date; 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. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E), are9
hereby amended and reenacted and R.S. 11:102(B)(3)(e), 249, 446(G), 542(G), 783(L),10
883.1(H), and 1150(C) are hereby enacted to read as follows: 11
§62. Employee contribution rates established12
A. Employee contributions to state and statewide public retirement systems13
shall be paid at the following rates, except as otherwise provided by law:14
(1) Assessors' Retirement Fund - 8%.15
(2) Clerks' of Court Retirement and Relief Fund - 8.25%.16
(3) Firefighters' Retirement System:17 SB NO. 25
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(a) Any member whose earnable compensation is less than or equal to the1
most recently issued poverty guidelines issued by the United States Department of2
Health and Human Services according to the size of the member's family unit - 8%.3
(b) For employee contributions due and payable July 1, 2011, or thereafter,4
any member whose earnable compensation is more than the most recently issued5
poverty guidelines issued by the United States Department of Health and Human6
Services according to the size of the member's family unit:7
If the total contribution for the fiscal8
year expressed as a percentage of9
payroll after applying all required tax The employee contribution10
contributions is: shall be:11
25.0% or below 8.0%12
25.01% to 25.75% 8.25%13
25.76% to 26.5% 8.5%14
26.51% to 27.25% 8.75%15
27.26% to 28.0% 9.0%16
28.01% to 28.75% 9.25%17
28.76% to 29.5% 9.5%18
29.51% to 30.25% 9.75%19
30.26% or above 10.0%20
(4) Louisiana School Employees' Retirement System:21
(a) Employees whose first employment making them eligible for membership22
in one of the state systems occurred on or before June 30, 2010 - 7.5%.23
(b) Employees whose first employment making them eligible for membership24
in one of the state systems occurred on or after July 1, 2010 - 8%.25
(5) Louisiana State Employees' Retirement System:26
(a) Judges, court officers, the governor, lieutenant governor and legislators:27
(i) Employees whose first employment making them eligible for membership28
in one of the state systems occurred on or before December 31, 2010 - 11.5%.29 SB NO. 25
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(ii) Employees, other than judges in Item (iii) of this Subparagraph, whose1
first employment making them eligible for membership in one of the state systems2
occurred on or after January 1, 2011 - 8%.3
(iii) Judges holding positions specified in R.S. 11:553(1), (3) through (5), (7),4
and (10) through (15) whose first employment making them eligible for membership5
in one of the state systems occurred on or after January 1, 2011 - 13%.6
(b) Public safety service employees referred to as "member" or "members"7
in R.S. 11:601(B); peace officers employed by the Department of Public Safety and8
Corrections, office of state police, other than state troopers, as provided in R.S.9
11:444(A)(2)(b); and personnel employed by the Department of Revenue, office of10
alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c) - 9%.11
(c) Clerk and sergeant at arms of the House of Representatives and Secretary12
and sergeant at arms of the Senate:13
(i) Employees whose first employment making them eligible for membership14
in one of the state systems occurred on or before December 31, 2010 - 9.5%.15
(ii) Employees whose first employment making them eligible for membership16
in one of the state systems occurred on or after January 1, 2011 - 8%.17
(d) Wildlife Agents - 9.5%.18
(e) All others:19
(i) Employed on or before June 30, 2006 - 7.5%20
(ii) Employed on or after July 1, 2006 - 8%21
(f) Bridge Police - 8.5% for those employees eligible for the benefit provided22
by R.S. 11:441(F).23
(g) "Members" of the Hazardous Duty Services Plan, as defined in R.S.24
11:612 - 9.5%.25
(h) Repealed by Acts 2010, No.1004, §2, eff. July 1, 2010.26
(6) Municipal Police Employees' Retirement System:27
(a) Any member whose earnable compensation is less than or equal to the28
most recently issued poverty guidelines issued by the United States Department of29 SB NO. 25
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Health and Human Services according to the size of the member's family unit - 7.5%.1
(b) For employee contributions due and payable July 1, 2011, or thereafter,2
any member whose earnable compensation is more than the most recently issued3
poverty guidelines issued by the United States Department of Health and Human4
Services according to the size of the member's family unit:5
If the total contribution for the fiscal6
year expressed as a percentage of7
payroll after applying all required tax The employee contribution8
contributions is: shall be:9
25.0% or below 7.5%10
25.01% to 25.75% 7.75%11
25.76% to 26.5% 8.0%12
26.51% to 27.25% 8.25%13
27.26% to 28.0% 8.5%14
28.01% to 28.75% 8.75%15
28.76% to 29.5% 9.25%16
29.51% to 30.25% 9.5%17
30.26% to 31.0% 9.75%18
31.0% or above 10.0%19
(7) Municipal Employees' Retirement System of Louisiana. Plan A - 9.25%.20
Plan B - 5%.21
(8) Parochial Employees' Retirement System of Louisiana:22
(a) Plan A - Not less than 8% nor more than 11%, as determined by the board23
of trustees in consultation with the actuary for the system.24
(b) Plan B - Not less than 3% nor more than 5%, as determined by the board25
of trustees in consultation with the actuary for the system.26
(c) Plan C - 5%.27
(9) Sheriffs' Pension and Relief Fund - Not less than 9.8% nor more than28
10.25%, as determined by the board of trustees in consultation with the actuary for29 SB NO. 25
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the fund.1
(10) State Police Pension and Retirement System:2
(a) Employees whose first employment making them eligible for3
membership in one of the state systems occurred on or before December 31, 2010 -4
8.5%.5
(b) Employees whose first employment making them eligible for6
membership in one of the state systems occurred on or after January 1, 2011 - 9.5%.7
(11) Teachers' Retirement System of Louisiana:8
(a) School lunch Plan A - 9.1%.9
(b) School lunch Plan B - 5%.10
(c) All others - 8%.11
(12) District Attorneys' Retirement System - 7%.12
(13) Registrars of Voters Employees' Retirement System - 7%.13
B.(1) Beginning January 1, 2013, employees shall make additional14
contributions to the state retirement systems at the rates provided in this15
Subsection for the purpose of funding the benefits provided in R.S. 11:249(C)16
and (D). For each year or fraction of a year of service credited to an employee17
while making these contributions, the employee shall accrue the benefits18
provided in R.S. 11:249(C) and (D)(5). The additional employee contributions19
shall be paid at the following rates:20
(a) Louisiana School Employees' Retirement System - 3.0%.21
(b) Louisiana State Employees' Retirement System - 2.0%.22
(c) Louisiana State Police Retirement System - 3.0%.23
(d) Teachers' Retirement System of Louisiana - 2.0%.24
(2)(a) Each system shall evaluate whether and to what extent the25
employee contributions provided in this Subsection meet or exceed such26
liabilities not later than the June 30, 2018, valuation and at least every five years27
thereafter.28
(b) If the system actuary concludes that the employee contribution rates29 SB NO. 25
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provided in this Subsection result in assets greater than the liabilities for which1
they are intended to pay, the actuary shall include such information in the next2
valuation submitted to the Public Retirement Systems' Actuarial Committee.3
The committee or the system may recommend to the legislature that the4
employee contribution rate be reduced to a level that fully funds the benefit.5
(c) Should a benefit change effective on or after July 1, 2012, for any6
system to which this Subsection applies result in an increase in the normal cost7
attributable to the benefits provided in R.S. 11:249(C) and (D), the employee8
contribution rate provided in this Subsection for that system may be increased9
to a rate which fully funds such increase.10
* * *11
§102. Employer contributions; determination; state systems12
* * *13
B.(1) * * *14
(3) With respect to each state public retirement system, the actuarially15
required employer contribution for each fiscal year, commencing with Fiscal Year16
1989-1990, shall be that dollar amount equal to the sum of:17
* * *18
(d) That fiscal year's payment, computed as of the first of that fiscal year and19
projected to the middle of that fiscal year at the actuarially assumed interest rate,20
necessary to amortize changes in actuarial liability due to:21
(i) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph22
and in Subparagraph (e) of this Paragraph, actuarial gains and losses, if23
appropriate for the funding method used by the system as specified in R.S. 11:22, for24
each fiscal year beginning after June 30, 1988, such payments to be computed as an25
amount forming an annuity increasing at four and one-half percent annually over the26
later of a period of fifteen years from the year of occurrence or by the year 2029,27
such gains and losses to include any increases in actuarial liability due to governing28
authority granted cost-of-living increases.29 SB NO. 25
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* * *1
(iv) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph2
and in Subparagraph (e) of this Paragraph, changes in actuarial accrued liability,3
computed using the actuarial funding method as specified in R.S. 11:22, due to4
legislation changing plan provisions, such payments to be computed in the manner5
and over the time period specified in the legislation creating the change or, if not6
specified in such legislation, as an amount forming an annuity increasing at four and7
one-half percent annually over the later of a period of fifteen years from the year of8
occurrence of the change or by the year 2029.9
* * *10
(e) That fiscal year's payment, computed as of the first of the fiscal year11
and projected to the middle of that fiscal year at the actuarially-assumed12
interest rate, necessary to amortize the unfunded accrued liability created by13
enactment of R.S. 11:249 with level dollar payments over a period of ten years,14
beginning in Fiscal Year 2013-2014.15
* * *16
§247. Automatic cost-of-living adjustments17
A.(1) Upon application for retirement or participation in the Deferred18
Retirement Option Plan, any member of a state or statewide retirement system may19
elect to receive an actuarially reduced retirement allowance plus an annual two and20
one-half percent cost-of-living adjustment. Such an election shall be irrevocable21
after the effective date of retirement or after the beginning date of participation in the22
Deferred Retirement Option Plan. The retirement allowance together with the cost-23
of-living adjustment shall be certified by the system actuary to be actuarially24
equivalent to the member's maximum or optional retirement allowance and shall be25
approved by the system's board of trustees.26
* * *27
D. Upon application for retirement or participation in the Deferred28
Retirement Option Plan and upon certifying that he is contemplating availing himself29 SB NO. 25
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of the provisions of this Section, a member of a state or statewide retirement system1
may request that the system provide actuarial estimates of the benefits that such2
member would receive pursuant to Subsection A of this Section for the fifth, tenth,3
and fifteenth year following the member's anticipated retirement date. The system4
shall provide such actuarial estimates to the member upon request.5
E. This Section shall not be applicable to recipients of disability retirement6
benefits pursuant to R.S. 11:461 et seq. All other persons receiving disability7
retirement benefits pursuant to the provisions of this Title shall be eligible to elect8
this retirement option upon conversion to a service retirement, if applicable, under9
the provisions of this Title for each state or statewide retirement system.10
* * *11
§249. Permanent benefit increases; state retirement systems12
A. The provisions of this Section shall apply to the following state13
retirement systems:14
(1) Louisiana School Employees' Retirement System.15
(2) Louisiana State Employees' Retirement System.16
(3) Louisiana State Police Retirement System.17
(4) Teachers' Retirement System of Louisiana.18
B. Employer-funded increases. (1) Each eligible recipient whose benefit19
is based exclusively on service credited to the person on or before June 30, 2012,20
shall have his benefit increased permanently by two percent on January 1, 2017,21
and on January first in each odd-numbered calendar year thereafter.22
(2) To be eligible for the permanent benefit increases provided in this23
Subsection, a retiree:24
(a) Shall have been separated from employment and receiving a benefit25
for at least one year; and26
(b) Shall have attained at least age sixty-two.27
(3) A nonretiree survivor or beneficiary shall be eligible for the28
permanent benefit increases provided in this Subsection:29 SB NO. 25
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(a) If the benefits have been received by the retiree or the beneficiary or1
both combined for at least one year; and2
(b) In no event before the retiree would have attained age sixty-two.3
(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to4
any person who receives disability benefits or who receives benefits based on the5
death of a disability retiree.6
C. Employee-funded increases. (1) Each eligible recipient whose benefit7
is based exclusively on service credited to the person on or after July 1, 2012,8
shall have his benefit increased permanently by two percent on January 1, 2023,9
and on January first in each odd-numbered calendar year.10
(2) To be eligible for the permanent benefit increases provided in this11
Subsection, a retiree:12
(a) Shall have been separated from employment and receiving a benefit13
for at least one year; and14
(b) Shall have attained at least age sixty-five.15
(3) A nonretiree survivor or beneficiary shall be eligible for the16
permanent benefit increases provided in this Section:17
(a) If the benefits have been received by the retiree or the beneficiary or18
both combined for at least one year; and19
(b) In no event before the retiree would have attained age sixty-five.20
(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to21
any person who receives disability benefits or who receives benefits based on the22
death of a disability retiree.23
D. Additive increases. (1) Each eligible recipient whose benefit is based24
partially on service credited to the person on or before June 30, 2012, and25
partially on service credited to the person on or after July 1, 2012, shall have his26
benefit increased permanently by two percent on January 1, 2023, and on27
January first in each odd-numbered calendar year thereafter.28
(2) To be eligible for the additive permanent benefit increases provided29 SB NO. 25
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in this Subsection, a retiree:1
(a) Shall have been separated from employment and receiving a benefit2
for at least one year; and3
(b) Shall have attained at least age sixty-five.4
(3) A nonretiree survivor or beneficiary shall be eligible for the5
permanent benefit increases provided in this Section:6
(a) If the benefits have been received by the retiree or the beneficiary or7
both combined for at least one year; and8
(b) In no event before the retiree would have attained age sixty-five.9
(4) The provisions of Subparagraphs (2)(b) and (3)(b) shall not apply to10
any person who receives disability benefits or who receives benefits based on the11
death of a disability retiree.12
(5) For each recipient, the portion of each increase considered to be13
employee-funded shall be equal to the ratio of years of service credited to the14
system member on or after July 1, 2012, to total years of service credited to him.15
E. Each such permanent benefit increase provided pursuant to this16
Section shall be payable based only on an amount not to exceed fifty thousand17
dollars of the recipient's annual benefit; however, for increases payable January18
1, 2020, and thereafter the fifty-thousand dollar limit shall be increased in an19
amount equal to the increase, if any, in the consumer price index, U.S. city20
average for all urban consumers (CPI-U), as prepared by the U.S. Department21
of Labor, Bureau of Labor Statistics, for the twenty-four month period ending22
on the June thirtieth immediately preceding the permanent benefit increase.23
* * *24
§446. Mode of payment where option elected25
* * *26
G. The actuarial equivalent options available pursuant to this Section27
shall be calculated without regard for R.S. 11:249.28
* * *29 SB NO. 25
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§542. Experience account1
* * *2
G. The authority to credit and debit the experience account shall cease3
on June 29, 2013.4
* * *5
§783. Selection of option for method of payment after death of member6
* * *7
L. The actuarial equivalent options available pursuant to this Section8
shall be calculated without regard for R.S. 11:249.9
* * *10
§883.1. Experience account11
* * *12
H. The authority to credit and debit the experience account shall cease13
on June 29, 2013.14
* * *15
§1150. Allowances; optional allowances16
* * *17
C. The actuarial equivalent options available pursuant to this Section18
shall be calculated without regard for R.S. 11:249.19
Section 2. R.S. 11:1145.1 and 1332 are hereby repealed.20
Section 3. Any retiree who elected to receive an actuarially reduced retirement21
allowance pursuant to R.S. 11:247 shall continue to be governed by the provisions in effect22
before the effective date of this Act. Each permanent benefit increase pursuant to the23
provisions of this Act shall be computed on the basis of the retiree's benefit on the date the24
increase is granted. If the permanent benefit increase is scheduled to be effective on the25
same day as the annual cost-of-living adjustment provided for in R.S. 11:247, the annual26
cost-of-living adjustment shall be calculated first.27
Section 4. The cost of this Act shall be funded with the employee contributions28
required pursuant to the provisions of Section 1 of this Act. The additional costs of this Act,29 SB NO. 25
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if any, shall be funded with additional employer contributions in compliance with Article1
X, Section 29(F) of the Constitution of Louisiana.2
Section 5. This Act shall become effective on June 30, 2012; if vetoed by the3
governor and subsequently approved by the legislature, this Act shall become effective on4
June 30, 2012, or on the day following such approval by the legislature, whichever is later.5
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Lauren Bailey.
DIGEST
Present law provides for permanent increases in retiree benefits for the four state retirement
systems, which are:
(1)Louisiana School Employees' Retirement System.
(2)Louisiana State Employees' Retirement System.
(3)Louisiana State Police Retirement System.
(4)Teachers' Retirement System of Louisiana.
Present law provides for timing and size of payment of such increases to be dependent upon
the experience of the retirement system investments in the market, the consumer price index,
and the funded level of the system.
Proposed law supersedes present law.
Proposed law, applicable to persons who are retired from these systems on June 30, 2011,
generally provides for a 2% benefit increase for eligible retirees in every odd-numbered year
beginning in 2018. Provides that an eligible retiree is one who:
(1) has been separated from service and receiving a benefit for one year; and
(2)has attained the age of 62.
Proposed law provides for additional employee contributions of 2% of pay for each active
member of these systems, beginning Jan. 1, 2012. Provides generally that a person who
retires from one of the systems on or after July 1, 2011, if he is otherwise eligible on the date
the benefit increase is effective, shall receive a 2% benefit increase in every odd-numbered
year beginning in 2021. Provides that an eligible retiree is one who:
(1) has been separated from service and receiving a benefit for one year; and
(2) has attained the age of 65.
Effective June 30, 2012.
(Amends R.S. 11:62, 102(B)(3)(d)(i) and (iv), and 247(A)(1), (D), and (E); adds R.S.
11:102(B)(3)(e), 249, 446(G), 542(G), 783(L), 883.1(H), and 1150(C); repeals R.S.
11:1145.1 and 1332)