Louisiana Senate Bill SB740

Louisiana 2012 Regular Session

• Introduced: 4/3/12
• Refer: 4/3/12
• Report Pass: 4/17/12
• Engrossed: 5/14/12
• Refer: 5/15/12
• Report Pass: 5/21/12

Caption

Provides relative to certain experience accounts. (6/30/12) (RE -$1,455,000,000 PBI LIABILITY)

Impact

If enacted, SB740 will establish distinct criteria for calculating and applying credits and debits to retirement benefits based on the performance and funding status of each subaccount. It stipulates that no permanent benefit increases will occur if the actuarial valuation reveals that the system is less than 80% funded or has not earned an approved actuarial rate of return. This measure is intended to safeguard the financial integrity of the retirement systems and ensure that benefits remain sustainable for current and future retirees.

Summary

Senate Bill 740, introduced by Senator Guillory, focuses on the amendment and reenactment of certain experience accounts in the Louisiana State Employees' Retirement System (LASERS) and the Teachers' Retirement System (TRSL). The bill aims to improve the actuarial soundness of these retirement systems by dividing experience accounts into specific subaccounts for different categories of employees. This division includes subaccounts for 'hazardous duty' employees and 'rank-and-file' employees within LASERS, as well as 'postsecondary education' and 'K-through-12' subaccounts within TRSL.

Sentiment

Overall, the sentiment around SB740 appears to be mixed. Advocates argue that the restructuring of accounts and the implementation of stringent funding benchmarks are necessary to preserve the viability of the pension systems. Critics, however, may express concerns regarding the potential limitations on benefit increases for retirees, especially in light of varying financial conditions across different sectors of public employees. This mixed sentiment highlights tensions between fiscal responsibility and the need to provide adequate retirement benefits.

Contention

One notable point of contention surrounding SB740 is the implications for retirees who may be adversely affected by the new funding requirements. Opponents fear that the emphasis on actuarial soundness at the cost of immediate benefit increases could disproportionately impact rank-and-file employees compared to those in hazardous duty roles. The discussions indicate that the bill could lead to significant differences in benefit security among various groups of retirees, raising questions about fairness and equity within the state's retirement system.