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Regular Session, 2013
SENATE BILL NO. 10
BY SENATOR GUILLORY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT SYSTEMS. Provides funding criteria a statewide retirement system must
meet before granting a benefit increase. (6/30/13)
AN ACT1
To amend and reenact R.S. 11:2178(M)(1)(a)(ii) and to enact R.S. 11:242(F), 243, and2
2178(M)(1)(d), relative to statewide retirement systems; to provide for cost-of-living3
adjustments and permanent benefit increases; to provide for an effective date; and4
to provide for related matters.5
Notice of intention to introduce this Act has been published.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 11:2178(M)(1)(a)(ii) is hereby amended and reenacted and R.S.8
11:242(F), 243, and 2178(M)(1)(d) are hereby enacted to read as follows:9
§242. Cost-of-living adjustments; permanent benefit increases; restrictions10
* * *11
F. The power of the governing authority of a system listed in Subsection12
B of this Section to grant benefit increases pursuant to the provisions of this13
Section shall cease when the governing authority makes an irrevocable option14
pursuant to R.S. 11:243(B)(1) to have future benefit increases for retirees,15
survivors, and beneficiaries governed by R.S. 11:243.16
* * *17 SB NO. 10
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§243. Cost-of-living adjustments; permanent benefit increases; restrictions;1
funding criteria2
A. The provisions of this Section shall apply to the following retirement3
systems:4
(1) The Assessors' Retirement Fund.5
(2) The Clerks' of Court Retirement and Relief Fund.6
(3) The District Attorneys' Retirement System.7
(4) The Municipal Employees' Retirement System of Louisiana.8
(5) The Parochial Employees' Retirement System of Louisiana.9
(6) The Registrars of Voters Employees' Retirement System.10
(7) The Sheriffs' Pension and Relief Fund.11
(8) The Municipal Police Employees' Retirement System.12
(9) The Firefighters' Retirement System.13
B.(1) On or before December 31, 2013, the governing authority of each14
of the retirement systems listed in Subsection A shall in a public meeting make15
an irrevocable election to have future benefit increases for retirees, survivors,16
and beneficiaries governed by R.S. 11:242 or this Section. In the event that the17
governing authority takes no action by the specified date, the provisions of this18
Section shall not apply and the benefit increases of that system shall continue19
to be subject to the provisions of R.S. 11:242.20
(2) After the governing authority has made its election, the board of21
trustees shall inform the speaker of the House of Representatives, the president22
of the Senate, and the Louisiana State Law Institute of its election in writing.23
C. The provisions of this Section do not repeal provisions relative to24
cost-of-living adjustments or permanent benefit increases contained within the25
individual laws governing the systems listed in Subsection A of this Section.26
However, the provisions of this Section are to be controlling in case of any27
conflict with the individual laws.28
D. The power of the governing authority of a system covered by this29 SB NO. 10
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Section to provide a cost-of-living adjustment or permanent benefit increase1
shall be effective in a particular calendar year only if the legislature fails to2
enact legislation granting a cost-of-living adjustment, unless in the legislation3
granting the cost-of-living adjustment, the legislature specifically authorized the4
governing authority to provide an additional cost-of-living adjustment to5
retirees, beneficiaries, or survivors of retired public employees of that system.6
E. No governing authority to which this Section applies shall provide a7
cost-of-living adjustment or permanent benefit increase to any retiree,8
beneficiary, or survivor during any calendar year prior to the final9
adjournment of the regular session of the legislature and shall not do so during10
the same year within which the legislature has granted an increase, unless in the11
legislation granting the increase, the legislature specifically authorizes the12
governing body to provide an additional increase to retirees, beneficiaries, and13
survivors of that system. The restrictions contained in this Subsection shall be14
inapplicable with respect to any system for which the legislature has failed to15
grant an increase.16
F. Disability retirees and surviving children or surviving spouses shall17
not be subject to the restrictions set forth in this Section.18
G.(1) Notwithstanding any other provision of law to the contrary, no19
system covered by this Section shall provide a cost-of-living adjustment or20
permanent benefit increase during any fiscal year until the lapse of at least21
one-half of the fiscal year, and unless either the funds for such increase are22
provided as authorized from a credit balance in that system's funding deposit23
account or the actuary for the system and the legislative auditor certify that the24
funded ratio of the system meets the requirements of one or more of the25
Subparagraphs in Paragraph (3) of this Subsection. If the legislative auditor26
disagrees with the determination of the system's actuary, the matter shall be27
determined by majority vote of the Public Retirement Systems' Actuarial28
Committee.29 SB NO. 10
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(2) For purposes of this Subsection, a system's "funded ratio" as of any1
fiscal year end shall be the ratio of the actuarial value of assets to the actuarial2
accrued liability under the funding method prescribed by the office of the3
legislative auditor. The actuarial value of assets and actuarial accrued liability4
for a system shall be those amounts reported to the office of the legislative5
auditor in the Annual Report for Public Retirement Systems.6
(3) The governing authority of a system covered by this Subsection may7
grant a benefit increase to retirees, survivors, and beneficiaries if any of the8
following apply:9
(a) The system has a funded ratio of ninety percent or more and has not10
granted a benefit increase to retirees, survivors, and beneficiaries in the most11
recent fiscal year.12
(b) The system has a funded ratio of eighty percent or more and has not13
granted a benefit increase to retirees, survivors, and beneficiaries in either of14
the two most recent fiscal years.15
(c) The system has a funded ratio of seventy percent or more and has not16
granted a benefit increase to retirees, survivors, and beneficiaries in any of the17
three most recent fiscal years.18
* * *19
§2178. Disability benefits; retirement benefits; death benefits20
* * *21
M.(1)(a)(i) * * *22
(ii) The cost-of-living adjustment shall be payable in a monthly amount not23
to exceed three two and one-half percent of the normal monthly benefit payable to24
the retiree, disability recipient, or survivor on the date the increase is granted, as25
provided in Subsection K of this Section, but shall not be less than twenty dollars per26
month. The dollar amount of such adjustment for any recipient shall not exceed27
five percent of the average monthly benefit in payment to service retirees as of28
the end of the preceding fiscal year.29 SB NO. 10
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* * *1
(d) The board, in any one fiscal year, may provide a cost-of-living2
adjustment pursuant to either Subparagraph (a) or (b) of this Paragraph;3
however, it shall not grant cost-of-living adjustments pursuant to both of these4
Subparagraphs within the same fiscal year.5
* * *6
Section 2. The provisions of this Act shall become effective on June 30, 2013; if7
vetoed by the governor and subsequently approved by the legislature, this Act shall become8
effective on June 30, 2013, or on the day following such approval by the legislature,9
whichever is later.10
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Margaret M. Corley
DIGEST
Guillory (SB 10)
Present law, applicable to statewide retirement systems, provides the authority to grant
retirees of a system a cost-of-living adjustment (COLA) based on the funded status of that
system in 1986, and its progress towards 100% funding by 2016.
Present law provides that the statewide retirement systems are:
(1)Assessors' Retirement Fund
(2)Clerks' of Court Retirement and Relief Fund
(3)District Attorneys' Retirement System
(4)Firefighters' Retirement System
(5)Municipal Employees' Retirement System of Louisiana
(6)Municipal Police Employees' Retirement System of Louisiana
(7)Parochial Employees' Retirement System of Louisiana
(8)Registrar of Voters Employees' Retirement System, and
(9)Sheriffs' Pension and Relief Fund.
Proposed law retains present law; however, proposed law allows the board of a statewide
retirement system to make an irrevocable decision by December 31, 2013, to be governed
by the provisions of proposed law rather than present law.
Proposed law provides authority for the boards of those systems which opt into proposed law
to grant a COLA according to the following criteria: SB NO. 10
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(1)The system has a funded ratio of 90% or more and has not granted a benefit increase
to retirees, survivors, and beneficiaries in the most recent fiscal year.
(2)The system has a funded ratio of 80% or more and has not granted a benefit increase
to retirees, survivors, and beneficiaries in either of the two most recent fiscal years.
(3)The system has a funded ratio of 70% or more and has not granted a benefit increase
to retirees, survivors, and beneficiaries in any of the three most recent fiscal years.
Present law provides the Sheriffs' Pension and Relief Fund the authority to grant a COLA
not to exceed 3% of the monthly benefit. Proposed law allows the Fund to grant a COLA not
to exceed 2½% of the monthly benefit. Proposed law also provides that the dollar amount
of such adjustment for any recipient shall not exceed 5% of the average monthly benefit in
payment to service retirees as of the end of the preceding fiscal year.
Effective June 30, 2013.
(Amends R.S. 11:2178(M)(1)(a)(ii); adds R.S. 11:242(F), 243, and 2178(M)(1)(d))