SLS 12RS-139 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2012
SENATE BILL NO. 44
BY SENATOR GUILLORY
RETIREMENT BENEFITS. Provides relative to authority to grant cost-of-living
adjustments. (7/1/12)
AN ACT1
To amend and reenact R.S. 11:242(E), relative to cost-of-living adjustments; to provide for2
funding of such adjustments; to provide for restrictions; to provide for an effective3
date; and to provide for related matters.4
Notice of intention to introduce this Act has been published.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 11:242(E) is hereby amended and reenacted to read as follows: 7
ยง242. Cost-of-living adjustments; restrictions 8
* * *9
E.(1) Notwithstanding any other provision of law to the contrary,10
commencing at the end of the retirement system's 1985-1986 fiscal year, unless11
thereafter specifically provided for by the legislature, any public retirement or12
pension system, fund, or plan covered by this Section shall not provide a13
cost-of-living increase during any fiscal year until the lapse of at least one-half of the14
fiscal year, and unless the actuary for the system and the legislative auditor certify15
that the funded ratio of the system, fund, or plan as of the end of the previous fiscal16
year equals or exceeds the target ratio as of that date for that system, fund, or plan.17 SB NO. 44
SLS 12RS-139 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
If the legislative auditor disagrees with the determination of the system's actuary, the1
matter shall be determined by majority vote of the Louisiana Public Retirement2
Systems' Actuarial Committee. For purposes of this Subsection, the funded ratio and3
target ratio are as defined below:4
(1) The "funded ratio" as of any fiscal year end shall be the ratio of the5
actuarial value of assets to the actuarial accrued liability under the funding method6
prescribed by the office of the legislative auditor. The actuarial value of assets and7
actuarial accrued liability for a system shall be those amounts reported to the office8
of the legislative auditor in the Annual Report for Public Retirement Systems.9
(2) The "target ratio" as of any fiscal year end shall be the lesser of (a) or (b)10
below:11
(a) One hundred percent.12
(b) The sum of (i), (ii), (iii), and (iv) below:13
(i) The funded ratio as of the 1986 fiscal year end.14
(ii) The number of fiscal years elapsed since the 1986 fiscal year end15
multiplied by one-thirtieth of the difference between one-hundred percent and the16
funded ratio of the system as of the 1986 fiscal year end.17
(iii) The amount of each change in funded ratio due to mergers or changes in18
actuarial methods or assumptions occurring after the fiscal 1986 year end.19
(iv) For each change in funded ratio due to mergers or changes in actuarial20
methods or assumptions occurring after the 1986 fiscal year end, an amount of21
opposite arithmetic sign from such change in funded ratio equal in absolute value to22
the number of fiscal years since the change in funded ratio multiplied by one-thirtieth23
of the original change in funded ratio due to the merger or change in actuarial24
methods or assumptions.25
(2)(a) In addition, any system covered by this Section shall not grant a26
cost-of-living increase during any fiscal year if at the close of the prior fiscal27
year the ratio of the market value of assets to the specified accrued liability is28
less than sixty-six and two-thirds percent.29 SB NO. 44
SLS 12RS-139 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(b) Any system covered by this Section shall not grant a cost-of-living1
increase during any fiscal year if at the close of the prior fiscal year the ratio of2
the market value of assets to the specified accrued liability is greater than or3
equal to sixty-six and two-thirds percent but less than seventy percent and a4
cost-of-living increase was granted in any of the prior three fiscal years.5
(c) Any system covered by this Section shall not grant a cost-of-living6
increase during any fiscal year if at the close of the prior fiscal year the ratio of7
the market value of assets to the specified accrued liability is greater than or8
equal to seventy percent but less than eighty percent and a cost-of-living9
increase was granted in any of the prior two fiscal years.10
(d) Any system covered by this Section shall not grant a cost-of-living11
increase during any fiscal year if at the close of the prior fiscal year the ratio of12
the market value of assets to the specified accrued liability is greater than or13
equal to eighty percent but less than ninety percent and a cost-of-living increase14
was granted in the prior fiscal year.15
(3) The specified accrued liability for a given fiscal year shall be the16
entry age normal actuarial accrued liability based on the actuarial assumptions17
utilized for the valuation immediately prior to the valuation for the given fiscal18
year end.19
(4) The provisions of this Section shall not apply to any cost-of-living20
increase funded from a credit balance in the system's Funding Deposit Account.21
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor22
and subsequently approved by the legislature, this Act shall become effective on July 1,23
2012, or on the day following such approval by the legislature, whichever is later.24
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 for cost-of-living adjustments (COLA) for the following retirement
systems:
(1)The Assessors' Retirement Fund. SB NO. 44
SLS 12RS-139 ORIGINAL
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words in boldface type and underscored are additions.
(2)The Clerks' of Court Retirement and Relief Fund.
(3)The District Attorneys' Retirement System.
(4)The Municipal Employees' Retirement System of Louisiana.
(5)The Parochial Employees' Retirement System of Louisiana.
(6)The Registrars of Voters Employees' Retirement System.
(7)The Sheriffs' Pension and Relief Fund.
(8)The Municipal Police Employees' Retirement System.
(9)The Firefighters' Retirement System.
Proposed law retains present law.
Present law provides funding requirements on a moving scale to be met in order for the
board of trustees of a system to which present law applies to have the authority to grant a
COLA.
Proposed law provides for a set schedule of funding levels to be met in order for the board
of trustees of a system to which present law applies to have the authority to grant a COLA.
Proposed law provides that the schedule of funding levels shall not apply to any COLA
funded from a credit balance in the system's Funding Deposit Account.
Effective July 1, 2012.
(Amends R.S. 11:241(E))