HLS 13RS-492 ORIGINAL
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Regular Session, 2013
HOUSE BILL NO. 33
BY REPRESENTATIVE PEARSON
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT/TEACHERS: Provides for continued payment of the unfunded accrued
liability portion of employer contributions after participation ceases
AN ACT1
To enact R.S. 11:887.1, relative to the Teachers' Retirement System of Louisiana; to provide2
for payment of unfunded accrued liability by an employer that withdraws some or3
all of its employees from the retirement system; to provide for all other withdrawal4
liabilities of such employers; to provide for determination of amount of withdrawal5
liability and payment and collection of same; to provide an effective date; and to6
provide for related matters.7
Notice of intention to introduce this Act has been published8
as provided by Article X, Section 29(C) of the Constitution9
of Louisiana.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 11:887.1 is hereby enacted to read as follows: 12
ยง887.1. Unfunded accrued liability; payment by employing agency13
A.(1)(a) Notwithstanding any other provision of law to the contrary, if an14
employing agency is authorized by law to terminate its participation in the retirement15
system and terminates participation for all of its employees, such employing agency16
shall remit to the retirement system its proportionate share of any unfunded actuarial17
accrued liability of the retirement system, as further provided in this Section.18
(b) Notwithstanding any other provision of law to the contrary, if an19
employing agency terminates its participation in the retirement system as authorized20 HLS 13RS-492 ORIGINAL
HB NO. 33
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by administrative action, contract, or other legally authorized action, and terminates1
participation for all of its employees, any entity authorizing such termination shall2
remit to the retirement system the employing agency's proportionate share of any3
unfunded actuarial accrued liability of the retirement system, as further provided in4
this Section.5
(c) Notwithstanding any other provision of law to the contrary, if an6
employing agency whose employees are not members of the retirement system, hires7
any employee previously employed by another employing agency whose employees8
were members of the retirement system, there shall be no obligation on the part of9
the hiring employing agency for any unfunded accrued liability resulting from the10
employee's previous employment.11
(2) Notwithstanding any other provision of law to the contrary, if an12
employing agency terminates its participation in the retirement system for some of13
its employees by eliminating positions held by such employees through privatization,14
the employer shall remit to the retirement system its proportionate share of any15
unfunded actuarial accrued liability, as further provided in this Section.16
(3)(a) Notwithstanding any other provision of law to the contrary, if a school17
or entity under an employer's jurisdiction is converted to any other governance18
model and by administrative action, contract, or other legally authorized action, the19
prospective employing entity is permitted by the employer to terminate its20
participation or forgo participation in the retirement system, the employer shall remit21
to the retirement system the proportionate share of any unfunded actuarial accrued22
liability, as further provided in this Section.23
(b) Notwithstanding any other provision of law to the contrary, if a school or24
entity under an employer's jurisdiction is transferred to any other entity and the25
receiving entity permits the prospective employing agency, as applicable, to26
terminate participation or forgo participation in the retirement system, the receiving27
entity shall remit to the retirement system the proportionate share of any unfunded28
actuarial accrued liability, as further provided in this Section.29 HLS 13RS-492 ORIGINAL
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(4) For purposes of this Section, the following terms shall have the following1
meanings:2
(a) "Privatization" shall mean the elimination of positions eligible for3
membership in the retirement system without eliminating the services provided or4
delivered or the functions performed, the outsourcing or contracting for the service5
or function with a private employer, or utilization of any other legal mechanism6
having the same effect with the result that the service or function previously7
provided, delivered, or performed by an employee in a retirement system-covered8
position is now provided, delivered, or performed by a person or persons in positions9
which are not eligible for system coverage.10
(b) "Proportionate share of any unfunded accrued liability" shall mean the11
unfunded accrued liability, if any, which is attributable to benefits accrued by or12
granted to employees and retirees of the employing agency and which was13
established during the period of time that the employing agency was a participating14
employer with the retirement system or with respect to Paragraph (3) of this15
Subsection, during the period of time the school or entity was under the employer's16
jurisdiction.17
B.(1) The actuary employed by the retirement system shall determine the18
amounts required to be remitted pursuant to this Section as of the June thirtieth19
immediately prior to the date of the termination of participation, elimination of20
positions, or conversion or transfer of the school or entity.21
(2)(a) Should the entity responsible for payment disagree with the amounts22
determined by the retirement system actuary, the entity may appeal to the Public23
Retirement Systems' Actuarial Committee within thirty days after receipt of the24
invoice.25
(b) The legislative auditor shall perform an independent determination of the26
amounts due, and if his calculation disagrees with that of the retirement system27
actuary, the committee shall meet and render a final determination. If the28
calculations agree, the invoice shall be due as provided in this Section.29 HLS 13RS-492 ORIGINAL
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(3) The amounts due pursuant to this Section shall, at the option of the1
employing agency, be paid either in a lump sum or in equal monthly payments with2
interest at the retirement system's actuarial valuation rate amortized over ten years3
or less.4
C. Should an employing agency fail to timely make payment pursuant to this5
Section, the amount due shall be collected in the same manner as authorized by R.S.6
11:886 and 887.7
Section 2. The provisions of this Act shall apply to any employing agency8
participating in the retirement system in any plan year ending on or after June 30, 2013.9
Section 3. This Act shall become effective on June 30, 2013; if vetoed by the10
governor and subsequently approved by the legislature, this Act shall become effective on11
June 30, 2013, or on the day following such approval by the legislature, whichever is later.12
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HB No. 33
Abstract: Requires payment of a portion of the system's unfunded accrued liability by
employers that withdraw employees from the Teachers' Retirement System of La.
Present law does not provide for a mechanism for an employer to withdraw some or all of
its employees from the Teachers' Retirement System of La. (TRSL).
Proposed law relative to TRSL provides that if an employing agency is authorized by law
to terminate its participation in the retirement system and terminates its participation for
some or all of its employees, such employing agency shall remit to the retirement system its
share of any unfunded accrued liability (UAL) of the retirement system existing on the June
30
th
immediately prior to the date of the employing agency's termination.
Proposed law provides that the amounts due shall be determined by the actuary employed
by the system and shall be paid in a lump sum or amortized over 10 years or less in equal
monthly payments with interest at the retirement system's actuarial valuation rate, at the
option of the employer.
Proposed law provides that should an employing agency fail to make payment, the amount
due shall be collected in the same manner as authorized by present law (R.S. 11:886 and
887) which includes withholding of state funds.
Effective June 30, 2013.
(Adds R.S. 11:887.1)