SLS 12RS-129 ORIGINAL
Page 1 of 9
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. 47
BY SENATOR GUILLORY
RETIREMENT SYSTEMS. Provides relative to final average compensation. (6/30/12)
AN ACT1
To amend and reenact R.S. 11:403(5) and 701(5)(b) through (e) and to enact R.S.2
11:701(5)(f) and Subpart P of Part II of Chapter 4 of Subtitle I of Title 11 of the3
Louisiana Revised Statutes of 1950, to be comprised of R.S. 11:331, relative to4
certain members of the Louisiana State Employees' Retirement System and certain5
postsecondary education members of the Teachers' Retirement System of Louisiana;6
to provide with respect to benefit calculation; to provide an effective date; and to7
provide for related matters.8
Notice of intention to introduce this Act has been published.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 11:403(5) and 701(5)(b) through (e) are hereby amended and11
reenacted and R.S. 11:701(5)(f) and Subpart P of Part II of Chapter 4 of Subtitle I of Title12
11 of the Louisiana Revised Statutes of 1950, comprised of R.S. 11:331, are hereby enacted13
to read as follows: 14
SUBPART P. LEGISLATIVE INTENT15
§331. Legislative intent; certain acts16
The Legislature of Louisiana hereby declares that the intent of the17 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 2 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
provisions of this Title that were enacted by the Act that originated as Senate1
Bill No. __ of the 2012 Regular Session of the Legislature is to attain and2
maintain the actuarial soundness of state and statewide systems as required by3
the Constitution of Louisiana, Article X, Section 29.4
* * *5
§403. Definitions6
The following words and phrases used in this Chapter shall have the7
following meanings, unless a different meaning is clearly required by the context:8
* * *9
(5)(a)(i) "Average compensation", for a member any of the following10
members whose first employment making him eligible for membership in the11
system began on or before June 30, 2006, and for any person who receives an12
additional benefit pursuant to R.S. 11:444(A)(2)(b) or (c), 557, 582, or 602 or R.S.13
24:36 whose first employment making him eligible for membership in one of the14
state systems occurred on or before December 31, 2010, means the average annual15
earned compensation of a state employee for the thirty-six highest months of16
successive employment, or for the highest thirty-six successive joined months of17
employment where interruption of service occurred; however, average compensation18
for part-time employees who do not use thirty-six months of full-time employment19
for average compensation purposes shall be based on the base pay the part-time20
employee would have received had he been employed on a full-time basis .:21
(aa) Public safety service employees referred to as "member" or22
"members" in R.S. 11:601(B).23
(bb) Peace officers employed by the Department of Public Safety and24
Corrections, office of state police, other than state troopers, as provided in R.S.25
11:444(A)(2)(b).26
(cc) Personnel employed by the Department of Revenue, office of alcohol27
and tobacco control, as provided in R.S. 11:444(A)(2)(c).28
(dd) Wildlife agents.29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 3 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(ee) Bridge police.1
(ii) The earnings to be considered for the thirteenth through the2
twenty-fourth month shall not exceed one hundred twenty-fi ve percent of the3
earnings of the first through the twelfth month. The earnings to be considered for the4
final twelve months shall not exceed one hundred twenty-five percent of the earnings5
of the thirteenth through the twenty-fourth month. Nothing in this Subparagraph,6
however, shall change the method of determining the amount of earned7
compensation received.8
(b)(i) "Average compensation", for a member any member not covered by9
the provisions of Subparagraph (a) of this Paragraph whose first employment10
making him eligible for membership in the system began on or after July 1, 2006,11
and subject to the limitations provided in this Subparagraph, means the average12
annual earned compensation of a state employee member for the sixty highest13
months of successive employment or for the highest sixty successive joined months14
of employment where interruption of service occurred; however, average15
compensation for part-time employees who do not use sixty months of full-time16
employment for average compensation purposes shall be based on the base pay the17
part-time employee would have received had he been employed on a full-time basis.18
This Item shall also be applicable to any judge, court officer, governor, lieutenant19
governor, clerk or sergeant-at-arms of the House of Representatives, secretary or20
sergeant-at-arms of the Senate, or state treasurer whose first employment making21
him eligible for membership in one of the state systems occurred on or after January22
1, 2011.23
(ii) The earnings to be considered for persons to whom Item (i) of this24
Subparagraph applies for the thirteenth through the twenty-f ourth month shall not25
exceed one hundred fifteen percent of the earnings of the first through the twelfth26
month. The earnings to be considered for the twenty-fifth through the thirty-sixth27
month shall not exceed one hundred fifteen percent of the earnings of the thirteenth28
through the twenty-fourth month. The earnings to be considered for the29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 4 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
thirty-seventh through the forty-eighth month shall not exceed one hundred fifteen1
percent of the earnings of the twenty-fifth through the thirty-sixth month. The2
earnings for the final twelve months shall not exceed one hundred fifteen percent of3
the earnings of the thirty-seventh through the forty-eighth month. The limitations4
on the computation of average compensation contained in this Item shall not apply5
to any twelve-month period during which compensation increased by more than6
fifteen percent over the previous twelve-month period solely because of an increase7
in compensation by a uniform systemwide increase adopted by the state Department8
of Civil Service and approved by the governor or because of a pay adjustment9
enacted by the legislature. This Item shall also be applicable to any judge, court10
officer, member of the Louisiana Legislature, governor, lieutenant governor, clerk11
or sergeant-at-arms of the House of Representatives, secretary or sergeant-at-arms12
of the Senate, or state treasurer whose first employment making him eligible for13
membership in one of the state systems occurred on or after January 1, 2011.14
(iii) The provisions of this Subparagraph shall not apply to any person who15
receives an additional benefit pursuant to R.S. 11:444(A)(2)(b) or (c), 557, 582, or16
602 or R.S. 24:36 whose first employment making him eligible for membership in17
one of the state systems occurred on or after January 1, 2011.18
* * *19
§701. Definitions20
As used in this Chapter, the following words and phrases have the meanings21
ascribed to them in this Section unless a different meaning is plainly required by the22
context:23
* * *24
(5)25
* * *26
(b) "Average compensation", for any member who is an academic or27
administrative employee of a public institution of higher education, or who is28
an employee of the Board of Regents, the Board of Supervisors for the29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 5 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
University of Louisiana System, the Board of Supervisors of Louisiana State1
University and Agricultural and Mechanical College, or the Board of2
Supervisors of Southern University and Agricultural and Mechanical College,3
or their successors, or any other constitutionally established board which4
manages institutions of postsecondary education, notwithstanding any provision5
of Subparagraph (a) of this Paragraph, means his average earnable6
compensation for the sixty highest months of successive employment or for the7
highest sixty successive joined months of employment where interruption of8
service occurred. The computation of such average compensation shall be in9
accordance with the following guidelines:10
(i) The amount for the first through the twelfth month shall not exceed11
the compensation for the immediately preceding twelve months by more than12
fifteen percent.13
(ii) The amount for the thirteenth through the twenty-fourth month14
shall not exceed the lesser of the maximum allowable compensation amount or15
the actual compensation amount for the first through twelfth month by more16
than fifteen percent.17
(iii) The amount for the twenty-fifth through the thirty-sixth month18
shall not exceed the lesser of the maximum allowable compensation amount or19
the actual compensation amount for the thirteenth through twenty-fourth20
month by more than fifteen percent.21
(iv) The amount for the thirty-seventh through the forty-eighth month22
shall not exceed the lesser of the maximum allowable compensation amount or23
the actual compensation amount for the twenty-fifth through the thirty-sixth24
month by more than fifteen percent.25
(v) The amount for the final twelve months shall not exceed the lesser26
of the maximum allowable compensation amount or the actual compensation27
amount for the thirty-seventh through the forty-eighth month by more than28
fifteen percent.29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 6 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(c) The thirty-six or sixty months used for average compensation, as the case1
may be, cannot cover a period when the member receives more than three years or2
five years of service credit respectively.3
(c) (d)(i) The limitations on the computation of average compensation in this4
Paragraph shall not apply to any of the twelve-month periods where compensation5
increased by more than the amount allowable in Subparagraph (a) Subparagraphs6
(a) and (b) of this Paragraph over the previous twelve-month period solely because7
of an increase in compensation by legislative act Act, by city/parish systemwide8
salary increase, or by a systemwide increase at a college or university.9
(ii) Any active member or retiree whose average compensation includes or10
would include earnable compensation received between June 30, 1995, and June 30,11
1997, as the result of a legislative act Act, a city/parish systemwide salary increase,12
or a systemwide increase at a college or university shall have his average13
compensation calculated without regard to the limitations on the computation of14
average compensation imposed in this Paragraph for that period. The provisions of15
this Item shall only apply to any such member or retiree whose employer filed with16
this system on or before July 1, 1998, a written request or application for coverage17
under this Subparagraph.18
(iii) Any retiree to whom Item (ii) of this Subparagraph applies, whose19
benefits are based, or by reason of Item (ii) of this Subparagraph would be based, on20
a calculation of average compensation which includes earnable compensation21
between June 30, 1995, and June 30, 1997, shall have his benefits recalculated in22
accordance with this Subparagraph and, if an increase in benefits results, the retiree23
shall be paid such an amount to restore any prior benefits that would have been paid24
if the benefits had originally been calculated in accordance with this Subparagraph.25
(d) (e) Provided, however, in any case where a classroom teacher changes26
employment to that of a classroom teacher in another parish, the amount for the27
twelve months of earnings in the position of a classroom teacher in the second parish28
of employment shall not exceed the compensation for the immediately preceding29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 7 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
twelve months by more than twenty-five percent.1
(e) (f) Notwithstanding any other provision of law to the contrary, "average2
compensation" shall not include any amount in excess of the limitation provided in3
R.S. 11:785.1.4
* * *5
Section 2. The provisions of R.S. 11:403(5) and 701(5) as amended by this Act shall6
not cause the average compensation of any member retiring on or after the effective date of7
this Act to be less than such member's average compensation as it existed before the8
effective date of this Act.9
Section 3. As soon as practicable after the effective date of this Act, the Public10
Retirement Systems' Actuarial Committee shall meet to adopt a revised valuation for the11
system, prepared as provided in R.S. 11:102, applying provisions contained in this Act. This12
valuation shall include a revised employer contribution rate for each plan within the system13
to be utilized in the fiscal year which begins on July 1, 2012. 14
Section 4. Any final judgment, rendered by a court of law, declaring the provisions15
of this Act to be unconstitutional as applicable to a particular group of members of the16
Louisiana State Employees' Retirement System or the Teachers' Retirement System of17
Louisiana, the provisions of this Act shall remain in effect and applicable to employees18
unrelated to the judgment.19
Section 5.(A) On June 30, 2012, this Act shall become applicable to members of the20
Louisiana State Employees' Retirement System and the Teachers' Retirement System of21
Louisiana who shall not be eligible for retirement by October 1, 2012.22
(B) On October 1, 2012, the provisions of this Act shall become applicable to other23
members of the Louisiana State Employees' Retirement System and the Teachers' Retirement24
System of Louisiana as provided in the Act.25
Section 6. The provisions of this Act shall become effective on June 30, 2012; if26
vetoed by the governor and subsequently approved by the legislature, this Act shall become27
effective on June 30, 2012, or on the day following such approval by the legislature,28
whichever is later.29 SB NO. 47
SLS 12RS-129 ORIGINAL
Page 8 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Proposed law provides that it is the legislative intent of proposed law to attain and maintain
the actuarial soundness of state and statewide retirement systems as required by present
constitution (Art. X, §29).
AVERAGE COMPENSATI ON
Present law generally provides for a benefit calculation formula for members of each state
system typically consisting of: (years of service) x (accrual rate) x (final average
compensation).
Present law (R.S. 11:403(5) and 701(5)), relative to LASERS and TRSL, provides varying
periods of FAC for members of those systems ranging from three to five years. FAC periods
for LASERS and TRSL are as follows:
(1)LASERS: Rank-and-file members hired on or before June 30, 2006, have a three-
year FAC. Rank-and-file members hired after such date have a five-year FAC.
(2)LASERS: Special groups such as the governor, lieutenant governor, and legislators,
hired on or before Dec. 31, 2010, have a three-year FAC. Such members elected on
or after Jan. 1, 2011, have a five-year FAC.
(3)LASERS: Certain hazardous duty groups hired on or before Dec. 31, 2010, have a
three-year FAC. Such members hired on or after Jan. 1, 2011, have a five-year FAC.
(4)TRSL: Members hired on or before Dec. 31, 2010, have a three-year FAC. Members
hired on or after Jan. 1, 2011, have a five-year FAC.
Proposed law provides that all members of LASERS who are in "hazardous duty" jobs and
hired prior to June 30, 2006, shall retain the three-year FAC. For purposes of proposed law,
"hazardous duty" jobs are:
(1)Public safety service employees referred to as "member" or "members" in R.S.
11:601(B); peace officers employed by the Dept. of Public Safety and Corrections,
office of state police, other than state troopers, as provided in R.S. 11:444(A)(2)(b);
and personnel employed by the Dept. of Revenue, office of alcohol and tobacco
control, as provided in R.S. 11:444(A)(2)(c).
(2)Wildlife agents.
(3)Bridge police.
Proposed law further provides that all "non-hazardous duty" employees in LASERS, as
defined in proposed law, shall have a five-year FAC, regardless of the date of hire. Further
provides that higher education employees, as defined in proposed law, in TRSL shall have
a five-year FAC.
Proposed law requires the Public Retirement Systems' Actuarial Committee to meet to adopt
a revised valuation for the systems, prepared as provided in R.S. 11:102, applying provisions
contained in proposed law. The new valuation shall include a revised employer contribution
rate for each plan within the system to be utilized in the fiscal year which begins on July 1,
2012. SB NO. 47
SLS 12RS-129 ORIGINAL
Page 9 of 9
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides a severability clause such that if a court declares any provisions of
proposed law to be unconstitutional as applicable to certain members of LASERS and TRSL,
then the provisions of the Act shall be applicable to the remaining members of the system.
Effective June 30, 2012.
(Amends R.S. 11:403(5) and 701(5)(b)-(e); adds R.S. 11:701(5)(f) and 331)