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Regular Session, 2012
SENATE BILL NO. 46
BY SENATOR CORTEZ
RETIREMENT SYSTEMS. Provides relative to merger of the La. School Employees'
Retirement System into the Teachers' Retirement System of La. (6/30/12)
AN ACT1
To amend and reenact R.S. 11:701(introductory paragraph), (7), and (29), 822(A)(2), 826,2
831, 832, 833, 834(A)(1) and (2)(introductory paragraph) and (B) through (D),3
1001(A) and (B), 1002(introductory paragraph), (8), (16), and (26) and 1161, to4
enact Subpart P of Part II of Chapter 4 of Subtitle I of Title 11 of the Louisiana5
Revised Statutes of 1950, to be comprised of R.S. 11:331, and R.S. 11:701(22.1) and6
1001(22.1), and to repeal R.S. 11:831, 1001(C), 1162 through 1165, and 11667
through 1171, relative to the merger of the Teachers' Retirement System of8
Louisiana and the Louisiana School Employees' Retirement System; to provide for9
consolidation of administration of the two systems; to provide for the maintenance10
of separate plans, including asset pools, actuarial valuations, contribution rates, and11
benefit entitlements; to provide for development of a strategy to consolidate the12
plans; to provide for the redesignation of certain provisions of Title 11 of the13
Louisiana Revised Statutes of 1950 and to direct the Louisiana State Law Institute14
with respect to such redesignations; and to provide for related matters.15
Notice of intention to introduce this Act has been published.16
Be it enacted by the Legislature of Louisiana:17 SB NO. 46
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Section 1. R.S. 11:701(introductory paragraph), (7), and (29), 822(A)(2), 826, 831,1
832, 833, 834(A)(1) and (2)(introductory paragraph) and (B) through (D), 1001(A) and (B),2
1002(introductory paragraph), (8), (16), and (26), and 1161 are hereby amended and3
reenacted and Subpart P of Part II of Chapter 4 of Subtitle I of Title 11 of the Louisiana4
Revised Statutes of 1950, comprised of R.S. 11:331, and R.S. 11:701(22.1) and 1001(22.1)5
are hereby enacted to read as follows:6
SUBPART P. LEGISLATIVE INTENT7
§331. Legislative intent8
The Legislature of Louisiana hereby declares that the intent of the9
provisions of this Title that originated as HB No. of the 2012 Regular Session10
of the Legislature is to attain and maintain the actuarial soundness of state and11
statewide systems as required by the Constitution of Louisiana, Art. X, Section12
29.13
* * *14
CHAPTER 2. TEACHERS' RETIREMENT SYSTEM15
OF LOUISIANA16
PART I. TEACHERS' RETIREMENT PLAN17
SUBPART A. GENERAL PROVISIONS18
* * *19
§701. Definitions20
As used in this Chapter Part, the following words and phrases have the21
meanings ascribed to them in this Section unless a different meaning is plainly22
required by the context:23
* * *24
(7) "Board of Trustees" means the board provided for in Part V Subpart E25
of this Chapter Part to administer the retirement system plans provided for in this26
Chapter.27
* * *28
(22.1) "Plan" means the mechanisms, rule, regulations, and rights29 SB NO. 46
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relative to retirement established in Part I of this Chapter.1
* * *2
(29) "Retirement System" or "System" means the Teachers' Retirement3
System of Louisiana as defined in R.S. 11:702 established in this Chapter,4
comprised of the Teachers' Retirement Plan and the Louisiana School5
Employees' Retirement Plan.6
* * *7
PART SUBPART V. ADMINISTRATION8
* * *9
§822. Members of board of trustees; appointment or election; terms of office;10
vacancies; compensation11
A. The board shall consist of such trustees as follows:12
* * *13
(2) One voting member representing the school support personnel14
members and members paid by school food service funds shall be elected by a15
majority of said members for a four-year term.16
* * *17
§826. Rules and regulations18
Subject to the limitations of this Part Subpart the board of trustees shall,19
from time to time, establish rules and regulations for the administration of the funds20
created and maintained by this Part Chapter and for the transaction of its business.21
The board shall prepare and submit to the Joint Legislative Committee on the Budget22
an annual budget for estimated costs of operating the system for each succeeding23
fiscal year. This budget shall be subject to approval by the Joint Legislative24
Committee on the Budget.25
* * *26
§831. Joint administration with other systems27
The board of trustees shall take such actions as it deems necessary or28
appropriate to provide for the joint administration of the retirement system and the29 SB NO. 46
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Louisiana School Employees' Retirement System and the Louisiana State School1
Lunch Employees' Retirement System; however, no action shall be taken which2
would impair the integrity of the board of trustees of each of the systems or the3
integrity of the funds and investments of each of the systems. The boards may,4
pursuant to the authority herein, appoint the same secretary-treasurer or secretary5
manager, any other provision of law to the contrary notwithstanding. Funds6
appropriated for the administration of each system shall be used for such purpose and7
in the category of expenditures appropriated but otherwise may be transferred to8
accomplish the purposes of this Section without the necessity of additional approval9
by the legislature, the Legislative Budget Committee, or its successor, or the division10
of administration or its commissioner.11
§832. Records and other information; board's duty to keep12
A. The board of trustees shall keep in convenient form such data as shall be13
necessary for actuarial valuation of the various funds plans of the retirement system,14
and for checking the experience of the system.15
B. The board of trustees shall keep a record of all of its proceedings which16
shall be open to public inspection. It shall publish annually a report showing the17
fiscal transactions of the retirement system plans provided for in this Chapter for18
the preceding school year, the amount of the accumulated cash and securities of the19
system plans, and the last balance sheet showing the financial condition of the20
system plans by means of an actuarial valuation of the assets and liabilities of the21
retirement system each plan.22
§833. Medical board; appointment; duties and powers23
The board of trustees shall designate a medical board to be composed of three24
physicians not eligible to participate in the retirement system any plan administered25
by the Teachers' Retirement System of Louisiana. If required, other physicians26
may be employed to report on special cases. The medical board shall arrange for and27
pass upon all medical examinations required under the provisions of this Chapter,28
and shall investigate all essential statements and certificates by or on behalf of a29 SB NO. 46
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member in connection with an application for disability retirement, and shall report1
in writing to the board of trustees its conclusion and recommendations upon all the2
matters referred to it.3
§834. Actuary; appointment; duties and powers; assets; fiduciary responsibility of4
trustees; portfolio control manager; actuarial assumptions5
A.(1) The board of trustees shall designate an actuary for each retirement6
plan provided for in this Chapter. Such actuary or actuaries who shall be the7
technical adviser of the board of trustees on matters regarding the operation of the8
their respective funds created by the provisions of this Chapter, and shall perform9
such other duties as are required in connection therewith.10
(2) In the year nineteen hundred thirty-eight 2012, and at least once in each11
five-year period thereafter, the each actuary shall make an actuarial investigation into12
the mortality, service, and compensation experience of the members and13
beneficiaries of the his respective retirement system, and shall make a valuation of14
the assets and liabilities of the funds of the system, and taking into account the result15
of such investigation and valuation, the board of trustees shall:16
* * *17
B. The assets of this system each plan shall be held separately in trust by18
the board of trustees, which board shall have exclusive authority and discretion to19
manage and control such each pool of assets. The assets of the system each plan20
shall be held for the exclusive purpose of providing benefits to members of the21
system the respective plan and their its beneficiaries and defraying reasonable22
expenses of administering the system such plan.23
C. The board of trustees may employ or appoint a portfolio control manager24
managers as an employee employees, at its own cost and expense without the25
approval of the governor.26
D.(1) Unless different actuarial assumptions are formally adopted and27
disclosed, as provided herein, the following assumptions shall determine the28
actuarial equivalents as used in this each retirement system plan provided for in29 SB NO. 46
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this Chapter:1
(a) Interest shall be compounded annually at the rate of seven percent per2
annum.3
(b) Annuity rates shall be determined on the basis of the 1971 Group4
Annuity Mortality Tables.5
(2) The board of trustees may authorize the use of interest and mortality rates6
in determining the actuarial equivalents which are different from the actuarial7
assumptions used for other purposes hereunder. Any change in such actuarial8
assumptions shall be considered a part of this the retirement system and shall be9
considered an amendment to the provisions of this Section. In order to be effective,10
such change must be formally adopted by the board of trustees and disclosed to11
members of the retirement system.12
* * *13
CHAPTER 3. PART II. LOUISIANA SCHOOL EMPLOYEES'14
RETIREMENT SYSTEM PLAN15
PART I SUBPART A. GENERAL PROVISIONS16
§1001. Name and establishment of retirement system; domicile; nominee name;17
partnership18
A. A retirement system plan is established and placed under the19
management of a board of trustees as established in R.S. 11:821 for the purpose of20
providing retirement allowances and other benefits for school bus drivers, school21
janitors, school custodians, school maintenance employees and other school22
employees employed in the state public school system. The retirement system plan23
is created as of July 31, 1946, but shall begin full operation as of July 1, 1947.24
B. It shall be a state agency domiciled in East Baton Rouge Parish and shall25
have the powers and privileges of a corporation and shall be known as the Louisiana26
School Employees' Retirement System Plan and by such name, or its nominee name27
which is hereby established as "LSERS," "LSERP", all of its business shall be28
transacted, all of its funds invested, and all of its cash and securities and other29 SB NO. 46
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property held, except as provided in Subsection C hereof. The secretary-treasurer1
of the system shall be the agent for service of legal process.2
* * *3
§1002. Definitions4
As used in this Chapter Part, the following words and phrases shall have the5
meanings ascribed to them in this Section unless a different meaning is plainly6
required by the context:7
* * *8
(8) "Board of Trustees" means the board provided to administer the9
retirement system plans provided for in this Chapter, established in R.S. 11:821.10
* * *11
(16) "Medical board" shall mean the State Medical Disability Board board12
provided for in R.S. 11:833.13
* * *14
(22.1) "Plan" means the mechanisms, rule, regulations, and rights15
relative to retirement established in Part II of this Chapter.16
* * *17
(26) "Retirement system" or "system" means the Louisiana School18
Employees Retirement System established and described in R.S. 11:1001 the19
Teachers' Retirement System of Louisiana established in this Chapter,20
comprised of the Teachers' Retirement Plan and the Louisiana School21
Employees' Retirement Plan.22
* * *23
PART V SUBPART E. ADMINISTRATION24
§1161. Board of trustees; administrative powers in general25
The general administration and responsibility for the proper operation of the26
retirement system plan and for making effective the provisions of this Chapter Part27
are vested in a board of trustees which shall be organized immediately after a28
majority of the trustees provided for in R.S. 11:1162 shall have qualified and taken29 SB NO. 46
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the oath of office.1
* * *2
Section 2. R.S. 11:831, 1001(C), 1162 through 1165, and 1166 through 1171 are3
hereby repealed in their entirety.4
Section 3. Upon the effective date of this Act, the board member currently5
representing the members paid by school food service funds shall also be the representative6
of the school support personnel members of the system. Upon the next election for such7
board member, the member shall be elected from the constituencies as provided in this Act.8
Section 4. The terms of office of any member serving on the Louisiana School9
Employees' Retirement System board of trustees upon the effective date of this Act are10
terminated upon the effective date of this Act and the board shall be dissolved and its duties11
and functions assumed by the Teachers' Retirement System of Louisiana as provided in this12
Act.13
Section 5.(A) Upon the effective date of this Act, all obligations, property, records,14
and employees of the Louisiana School Employees' Retirement System shall transfer to the15
Teachers' Retirement System of Louisiana, as amended by this Act. No provision of this Act16
shall be construed to impair any contract of the Louisiana School Employees' Retirement17
System in place on the effective date of this Act. Any such contract shall be honored by the18
Teachers' Retirement System of Louisiana as though the board of trustees had obligated19
itself to such contract.20
(B) The board of trustees for the Teachers' Retirement System of Louisiana, as21
amended by this Act, shall complete the transfer of all administrative functions from the22
Louisiana School Employees' Retirement System within one year after the effective date of23
this Act.24
Section 6. The board of trustees, as defined in this Act, shall eliminate a total of at25
least forty administrative positions within one year after the effective date of this Act. At26
least twenty positions shall be eliminated within six months after the effective date of this27
Act, and at least an additional twenty positions shall be eliminated by the end of the28
subsequent six-month period.29 SB NO. 46
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Section 7. The board of trustees, as defined in this Act, shall present a strategy to the1
Public Retirement Systems' Actuarial Committee by December 31, 2012, for the2
consolidation of the plans, assets, experience accounts, and investment policies of both plans3
within the system and shall include estimates for the savings resulting from such4
consolidation. Such strategy shall provide for consolidation of the plans within one calendar5
year. The Public Retirement Systems' Actuarial Committee shall consider the strategy and6
report its findings to the legislature by February 28, 2013.7
Section 8. The Public Retirement Systems' Actuarial Committee shall meet as soon8
as possible after the effective date of this Act to revise evaluations for the plans.9
Section 9. The Louisiana State Law Institute shall redesignate the Parts of Chapter10
2 as Subparts of Part I and the Parts of Chapter 3 as Subparts of Part II of Subtitle II of Title11
11 of the Louisiana Revised Statutes of 1950, and shall make appropriate technical changes12
to Chapter 2 of Subtitle II of Title 11 of the Louisiana Revised Statutes of 1950, as amended13
by this Act, as are necessary to accomplish such redesignation including but not limited to14
redesignating existing Subparts as Sub-Subparts.15
Section 10. The provisions of this Act shall become effective at midnight on June16
30, 2012.17
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law creates the Teachers' Retirement System of La. and the La. School Employees'
Retirement System as separate state retirement systems.
Proposed law merges the administration of the two systems. The new combined system will
retain the name "Teachers' Retirement System of La."
Proposed law treats each former system as a separate plan within the new combined system.
All present law applicable to each system shall remain in place, with the exception of
provisions relative to the governance of the system. Proposed law abolishes the LSERS
board and transfers all property, obligations, employees, and rights of the LSERS system to
the TRSL system. Proposed law further provides that the board of trustees for the TRSL
system shall govern both plans within the system.
Present law provides that one member of the TRSL board shall be a member representing
the food service members of the system. Proposed law provides that upon the effective date
of proposed law such member shall also represent the LSERS members merged into the
system. Provides that upon the next election of such board member food service employees SB NO. 46
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and school employees will elect such board member.
Proposed law provides that upon the effective date of the Act, the LSERS board shall be
abolished and all rights, obligations, property, contracts, and employees of the board shall
transfer to the new TRSL board.
Proposed law provides that the TRSL board shall eliminate a total of 40 positions within one
year after the effective date of the Act. Requires that 20 positions be eliminated within the
first six months and the second 20 positions eliminated within one year after the Act
becomes effective.
Provides that the TRSL board, as provided in proposed law, shall complete the transitions
required by proposed law within one year after the Act becomes effective. Further requires
the board to formulate a strategy to merge the two plans within one calendar year. Requires
that the board present such strategy to the Public Retirement Systems' Actuarial Committee
(PRSAC) by Dec. 31, 2012, and include an estimate of savings attributable to the merger.
PRSAC must evaluate the strategy and report to the legislature by Feb. 28, 2013.
Further provides that the Public Retirement Systems' Actuarial Committee shall meet as
soon as possible after the effective date of the Act to revise valuations for the plans.
Effective June 30, 2012.
(Amends R.S. 11:701(intro. para.), (7), and (29), 822(A)(2), 826, 831, 832, 833, 834(A)(1)
and (2)(intro. para.), and (B)-(D), 1001(A) and (B), 1002(intro. para.), (8), (16), and (26),
and 1161; Adds R.S. 11:331, 701(22.1), and 1001(22.1); Repeals R.S. 11:831, 1001(C),
1162–1165 and 1166–1171)