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Regular Session, 2013
SENATE BILL NO. 11
BY SENATOR GUILLORY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
RETIREMENT SYSTEMS. Provides relative to funding of and eligibility for post-
retirement benefit increases for certain state employees and teachers.
(2/3-CA10s29(F))(6/30/13)
AN ACT1
To amend and reenact R.S. 11:62, 102(B)(3)(d)(i) and (iv) and (5)(a), 247(A)(1) and (D),2
403(5), 416(A)(3)(a), 558(D), 701(5)(a)(introductory paragraph) and (b), 766(D),3
1002(6), 1143(D), 1150, 1152(J)(3) and (4), and 1310(A)(2), to enact R.S.4
11:102(B)(3)(e), (C)(4)(e), and (D)(4)(e), 102.1(C)(6), 102.2(C)(6), 249, 446(H), and5
783(L), and to repeal R.S. 11:542, 883.1, 1145.1, and 1332, relative to post-6
retirement benefit increases for certain members and beneficiaries of retirement7
systems for state employees and for public educational system employees; to provide8
for eligibility to receive the increases; to provide for the timing and amount of the9
increases; to provide for funding of past and future increases; to provide transition10
provisions; to provide for an effective date; and to provide for related matters.11
Notice of intention to introduce this Act has been published.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 11:62, 102(B)(3)(d)(i) and (iv) and (5)(a), 247(A)(1) and (D), 403(5),14
416(A)(3)(a), 558(D), 701(5)(a)(introductory paragraph) and (b), 766(D), 1002(6), 1143(D),15
1150, 1152(J)(3) and (4), and 1310(A)(2) are hereby amended and reenacted and R.S.16
11:102(B)(3)(e), (C)(4)(e), and (D)(4)(e), 102.1(C)(6), 102.2(C)(6), 249, 446(H), and 783(L)17 SB NO. 11
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are hereby enacted to read as follows:1
§62. Employee contribution rates established2
A. Employee contributions to state and statewide public retirement systems3
shall be paid at the following rates, except as otherwise provided by law:4
(1) Assessors' Retirement Fund - 8%.5
(2) Clerks' of Court Retirement and Relief Fund - 8.25%.6
(3) Firefighters' Retirement System:7
(a) Any member whose earnable compensation is less than or equal to the8
most recently issued poverty guidelines issued by the United States Department of9
Health and Human Services according to the size of the member's family unit - 8%.10
(b) For employee contributions due and payable July 1, 2011, or thereafter,11
any member whose earnable compensation is more than the most recently issued12
poverty guidelines issued by the United States Department of Health and Human13
Services according to the size of the member's family unit:14
If the total contribution for the fiscal15
year expressed as a percentage of16
payroll after applying all required tax The employee contribution17
contributions is: shall be:18
25.0% or below 8.0%19
25.01% to 25.75% 8.25%20
25.76% to 26.5% 8.5%21
26.51% to 27.25% 8.75%22
27.26% to 28.0% 9.0%23
28.01% to 28.75% 9.25%24
28.76% to 29.5% 9.5%25
29.51% to 30.25% 9.75%26
30.26% or above 10.0%27
(4) Louisiana School Employees' Retirement System members in Tier 1:28
(a) Employees whose first employment making them eligible for membership29 SB NO. 11
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in one of the state systems occurred on or before June 30, 2010 - 7.5%.1
(b) Employees whose first employment making them eligible for membership2
in one of the state systems occurred on or after July 1, 2010 - 8%.3
(4.1) Louisiana School Employees' Retirement System members in the cash4
balance plan - 8%.5
(5) Louisiana State Employees' Retirement System members in Tier 1:6
(a) Judges, court officers, the governor, lieutenant governor and legislators:7
(i) Employees whose first employment making them eligible for membership8
in one of the state systems occurred on or before December 31, 2010 - 11.5%.9
(ii) Employees, other than judges in Item (iii) of this Subparagraph, whose10
first employment making them eligible for membership in one of the state systems11
occurred on or after January 1, 2011 - 8%.12
(iii) Judges holding positions specified in R.S. 11:553(1), (3) through (5), (7),13
and (10) through (15) whose first employment making them eligible for membership14
in one of the state systems occurred on or after January 1, 2011 - 13%.15
(b) Public safety service employees referred to as "member" or "members"16
in R.S. 11:601(B); peace officers employed by the Department of Public Safety and17
Corrections, office of state police, other than state troopers, as provided in R.S.18
11:444(A)(2)(b); and personnel employed by the Department of Revenue, office of19
alcohol and tobacco control, as provided in R.S. 11:444(A)(2)(c) - 9%.20
(c) Clerk and sergeant at arms of the House of Representatives and Secretary21
and sergeant at arms of the Senate:22
(i) Employees whose first employment making them eligible for membership23
in one of the state systems occurred on or before December 31, 2010 - 9.5%.24
(ii) Employees whose first employment making them eligible for membership25
in one of the state systems occurred on or after January 1, 2011 - 8%.26
(d) Wildlife Agents - 9.5%.27
(e) All others:28
(i) Employed on or before June 30, 2006 - 7.5%.29 SB NO. 11
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(ii) Employed on or after July 1, 2006 - 8% .1
(f) Bridge Police - 8.5% for those employees eligible for the benefit provided2
by R.S. 11:441(F).3
(g) "Members" of the Hazardous Duty Services Plan, as defined in R.S.4
11:612 - 9.5%.5
(5.1) Louisiana State Employees' Retirement System members in the cash6
balance plan - 8%.7
(6) Municipal Police Employees' Retirement System:8
(a) For members hired prior to January 1, 2013, and for members of the9
Hazardous Duty Subplan:10
(i) Any member whose earnable compensation is less than or equal to the11
most recently issued poverty guidelines issued by the United States Department of12
Health and Human Services according to the size of the member's family unit - 7.5%.13
(ii) For employee contributions due and payable July 1, 2011, or thereafter,14
any member whose earnable compensation is more than the most recently issued15
poverty guidelines issued by the United States Department of Health and Human16
Services according to the size of the member's family unit:17
If the total contribution for the fiscal year expressed18
as a percentage of payroll after19
applying all required tax The employee contribution20
contributions is: shall be:21
25.0% or below 7.5%22
25.01% to 25.75% 7.75%23
25.76% to 26.5% 8.0%24
26.51% to 27.25% 8.25%25
27.26% to 28.0% 8.5%26
28.01% to 28.75% 8.75%27
28.76% to 29.5% 9.25%28
29.51% to 30.25% 9.5%29 SB NO. 11
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30.26% to 31.0% 9.75%1
31.0% or above 10.0%2
(b) For members of the Non-Hazardous Duty Subplan – 8%, or equal to the3
rate established in Item (a)(ii) of this Paragraph if less than 8%.4
(7) Municipal Employees' Retirement System of Louisiana.5
(a) Plan A - Not less than 9.25% nor more than 10% as determined by the6
board of trustees.7
(b) Plan B - Not less than 5% nor more than 6% as determined by the board8
of trustees.9
(8) Parochial Employees' Retirement System of Louisiana:10
(a) Plan A - Not less than 8% nor more than 11%, as determined by the board11
of trustees in consultation with the actuary for the system.12
(b) Plan B - Not less than 3% nor more than 5%, as determined by the board13
of trustees in consultation with the actuary for the system.14
(c) Plan C - 5%.15
(9) Sheriffs' Pension and Relief Fund - Not less than 9.8% nor more than16
10.25%, as determined by the board of trustees in consultation with the actuary for17
the fund.18
(10) Louisiana State Police Retirement System:19
(a) Employees whose first employment making them eligible for membership20
in one of the state systems occurred on or before December 31, 2010 - 8.5%.21
(b) Employees whose first employment making them eligible for membership22
in one of the state systems occurred on or after January 1, 2011 - 9.5%.23
(11) Teachers' Retirement System of Louisiana members in Tier 1:24
(a) School lunch Plan A - 9.1%.25
(b) School lunch Plan B - 5%.26
(c) All others - 8%.27
(11.1) Teachers' Retirement System of Louisiana members in the cash28
balance plan - 8%.29 SB NO. 11
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(12) District Attorneys' Retirement System - 8%.1
(13) Registrars of Voters Employees' Retirement System - 7%.2
B.(1) Beginning July 1, 2013, employees shall make additional3
contributions to the state retirement systems at the rates provided in this4
Subsection for the purpose of funding the benefits provided in R.S. 11:249(B)(2)5
and (3)(b). For each year or fraction of a year of service credited to an6
employee while making these contributions, the employee shall accrue the7
benefits provided in R.S. 11:249(B)(2) and (3)(b). The additional employee8
contributions shall be paid at the following rates:9
(a) Louisiana State Employees' Retirement System - 3.0%.10
(b) Teachers' Retirement System of Louisiana - 3.0%.11
(c) Louisiana School Employees' Retirement System - 3.0%.12
(d) Louisiana State Police Retirement System - 3.0%.13
(2)(a) Each system shall determine whether and to what extent the14
employee contributions provided in this Subsection meet or exceed the liabilities15
created by the benefits provided in R.S. 11:249 not later than the June 30, 201816
valuation and shall repeat the calculation no less frequently than every five17
years thereafter.18
(b) If, based on the determination required by Subparagraph (a) of this19
Paragraph, the system actuary concludes that the employee contributions20
provided in this Subsection result in assets greater than or less than the21
liabilities for which they are intended to pay, the actuary shall include such22
information in the next valuation submitted to the Public Retirement Systems'23
Actuarial Committee. The committee or the system may recommend to the24
legislature that the employee contribution rate be adjusted to a level that fully25
funds the benefit and what action, if any, is appropriate with regard to any26
excess funding.27
* * *28
§102. Employer contributions; determination; state systems29 SB NO. 11
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* * *1
B. * * *2
(3) With respect to each state public retirement system, the actuarially3
required employer contribution for each fiscal year, commencing with Fiscal Year4
1989-1990, shall be that dollar amount equal to the sum of:5
* * *6
(d) That fiscal year's payment, computed as of the first of that fiscal year and7
projected to the middle of that fiscal year at the actuarially assumed interest rate,8
necessary to amortize changes in actuarial liability due to:9
(i)(aa) Except as provided in Subitem (bb) of this Item, Items (v), (vi), (vii),10
and (viii) of this Subparagraph, and in Subparagraph (e) of this Paragraph,11
actuarial gains and losses, if appropriate for the funding method used by the system12
as specified in R.S. 11:22, for each fiscal year beginning after June 30, 1988, such13
payments to be computed as an amount forming an annuity increasing at four and14
one-half percent annually over the later of a period of fifteen years from the year of15
occurrence or by the year 2029, such gains and losses to include any increases in16
actuarial liability due to governing authority granted cost-of-living increases.17
(bb) Notwithstanding any provision of law to the contrary, including18
Items (v), (vi), (vii), and (viii) of this Subparagraph, effective for the June 30,19
2013, system valuation and beginning Fiscal Year 2014-2015, after any20
allocation that may be required by R.S. 11:102.1 or 102.2, fifty percent of the21
remaining balance of the prior year's net investment experience gain22
attributable to all assets, or to Tier 1 assets in a system with a cash balance plan,23
as determined by the system's actuary, shall be amortized as a level-dollar24
amount over a period of ten years from the year of occurrence. The provisions25
of this Subitem shall be effective until the unfunded accrued liability created by26
the enactment of R.S. 11:249 is fully funded and after that date investment27
experience gains shall be amortized as provided in this Section.28
* * *29 SB NO. 11
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(iv) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph1
and in Subparagraph (e) of this Paragraph, changes in actuarial accrued liability,2
computed using the actuarial funding method as specified in R.S. 11:22, due to3
legislation changing plan provisions, such payments to be computed in the manner4
and over the time period specified in the legislation creating the change or, if not5
specified in such legislation, as an amount forming an annuity increasing at four and6
one-half percent annually over the later of a period of fifteen years from the year of7
occurrence of the change or by the year 2029.8
* * *9
(e) That fiscal year's payment, computed as of the first of the fiscal year10
and projected to the middle of that fiscal year at the actuarially-assumed11
interest rate, necessary to amortize the unfunded accrued liability created by12
enactment of R.S. 11:249 with level dollar payments over a period of ten years,13
beginning in Fiscal Year 2014-2015.14
* * *15
(5)(a) Notwithstanding the provisions of this Section to the contrary, the16
gross employer contribution rate for the Louisiana State Employees' Retirement17
System and the Teachers' Retirement System of Louisiana shall not be less than18
fifteen and one-half twenty-five percent per year until such time as the unfunded19
accrued liability that existed on June 30, 2004 2012, is fully funded.20
* * *21
C. * * *22
(4) For each plan referenced in Paragraph (1) of this Subsection, the23
legislature shall set the required employer contribution rate equal to the sum of the24
following:25
* * *26
(e) The shared experience account amortization base payment rate. The27
experience account amortization base payment shall be one percent of pay, to28
be applied as provided in R.S. 11:102.1(C)(6).29 SB NO. 11
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* * *1
D. * * *2
(4) For each plan referenced in Paragraph (1) of this Subsection, the3
legislature shall set the required employer contribution rate equal to the sum of the4
following:5
* * *6
(e) The shared experience account amortization base payment rate. The7
experience account amortization base payment shall be one percent of pay, to8
be applied as provided in R.S. 11:102.2(C)(6).9
* * *10
§102.1. Consolidation of amortization payment schedules; Louisiana State11
Employees' Retirement System12
* * *13
C. Experience account amortization base.14
* * *15
(6) The additional employer contributions received by the system16
pursuant to R.S. 11:102(C)(4)(e) shall be applied to the experience account17
amortization base established in this Subsection. After such application, the net18
remaining liability shall be reamortized over the remaining amortization period19
with annual payments calculated as provided in this Subsection or as otherwise20
provided by law.21
§102.2. Consolidation of amortization payment schedules; Teachers' Retirement22
System of Louisiana23
* * *24
C. Experience account amortization base.25
* * *26
(6) The additional employer contributions received by the system27
pursuant to R.S. 11:102(D)(4)(e) shall be applied to the experience account28
amortization base established in this Subsection. After such application, the net29 SB NO. 11
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remaining liability shall be reamortized over the remaining amortization period1
with annual payments calculated as provided in this Subsection or as otherwise2
provided by law.3
* * *4
§247. Automatic cost-of-living adjustments5
A.(1) Upon application for retirement or participation in the Deferred6
Retirement Option Plan, any member of a state or statewide retirement system may7
elect to receive an actuarially reduced retirement allowance plus an annual two and8
one-half percent cost-of-living adjustment. Such an election shall be irrevocable9
after the effective date of retirement or after the beginning date of participation in the10
Deferred Retirement Option Plan. The retirement allowance together with the cost-11
of-living adjustment shall be certified by the system actuary to be actuarially12
equivalent to the member's maximum or optional retirement allowance and shall be13
approved by the system's board of trustees.14
* * *15
D. Upon application for retirement or participation in the Deferred16
Retirement Option Plan and upon certifying that he is contemplating availing himself17
of the provisions of this Section, a member of a state or statewide retirement system18
may request that the system provide actuarial estimates of the benefits that such19
member would receive pursuant to Subsection A of this Section for the fifth, tenth,20
and fifteenth year following the member's anticipated retirement date. The system21
shall provide such actuarial estimates to the member upon request.22
* * *23
§249. Permanent benefit increases; state retirement systems24
A. The provisions of this Section shall apply to the following state25
retirement systems:26
(1) Louisiana State Employees' Retirement System.27
(2) Teachers' Retirement System of Louisiana.28
(3) Louisiana School Employees' Retirement System.29 SB NO. 11
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(4) Louisiana State Police Retirement System.1
B.(1) Employer-funded increases. Each eligible recipient whose2
annuitized benefit is based exclusively on service credited to the person on or3
before June 30, 2013, shall have his benefit increased permanently by the4
amount specified in Subsection D of this Section on July 1, 2013, and on July5
first in each odd-numbered calendar year thereafter as further provided in this6
Section.7
(2) Employee-funded increases. Each eligible recipient whose annuitized8
benefit is based exclusively on service credited to the person on or after July 1,9
2013, shall have his benefit increased permanently by the amount specified in10
Subsection D of this Section on July 1, 2019, and on July first in each odd-11
numbered calendar year thereafter.12
(3)(a) Additive increases. Each eligible recipient whose annuitized13
benefit is based partially on service credited to the person on or before June 30,14
2013, and partially on service credited to the person on or after July 1, 2013,15
shall have his benefit increased permanently by the amount specified in16
Subsection D of this Section on July 1, 2019, and on July first in each odd-17
numbered calendar year thereafter.18
(b) For each recipient, the portion of each additive increase considered19
to be an employee-funded accrued benefit shall be equal to the ratio of years of20
service credited to the person on or after July 1, 2013, to total years of service21
credited to him.22
C. (1) To be eligible for the permanent benefit increases provided in this23
Subsection, a retiree:24
(a) Shall have been separated from employment and receiving an25
annuitized benefit for at least five years; and26
(b) Shall have attained at least age sixty-five.27
(2) A nonretiree survivor or beneficiary shall be eligible for the28
permanent benefit increases provided in this Subsection:29 SB NO. 11
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(a) If the annuitized benefits have been received by the retiree or the1
beneficiary or both combined for at least five years; and2
(b) In no event before the retiree would have attained age sixty-five.3
(3) The provisions of Subparagraphs (1)(b) and (2)(b) shall not apply to4
any person who receives disability benefits or who receives benefits based on the5
death of a disability retiree.6
D. Amount of increases. Each increase shall be the greater of:7
(1) One percent.8
(2) The lesser of:9
(a) Two percent.10
(b) The percent increase necessary to preserve eighty percent of the11
purchasing power of the recipient as of June 30, 2013, or his retirement date if12
later. The determination of diminution of purchasing power shall be computed13
using the increases, if any, provided to persons receiving old age, survivors, and14
disability insurance benefits from social security for the period beginning on15
September thirtieth of the year of retirement and ending on September thirtieth16
immediately preceding the permanent benefit increase.17
E. Each permanent benefit increase provided pursuant to this Section18
shall be payable based only on an amount not to exceed fifty thousand dollars19
of the recipient's annual benefit; however, for increases payable July 1, 2019,20
and thereafter the fifty-thousand dollar limit shall be increased in an amount21
equal to the increases, if any, provided to persons receiving old age, survivors,22
and disability insurance benefits from social security for the twenty-four month23
period ending on the September thirtieth immediately preceding the permanent24
benefit increase.25
* * *26
§403. Definitions27
The following words and phrases used in this Chapter shall have the28
following meanings, unless a different meaning is clearly required by the context:29 SB NO. 11
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* * *1
(5)(a)(i)"Average compensation", for a member whose first employment2
making him eligible for membership in the system began on or before June 30, 2006,3
and for any person who receives an additional benefit pursuant to R.S.4
11:444(A)(2)(b) or (c), 557, 582, or 602 or R.S. 24:36 whose first employment5
making him eligible for membership in one of the state systems occurred on or6
before December 31, 2010, means the average annual earned compensation of a state7
employee for the thirty-six highest months of successive employment, or for the8
highest thirty-six successive joined months of employment where interruption of9
service occurred; however, average compensation for part-time employees who do10
not use thirty-six months of full-time employment for average compensation11
purposes shall be based on the base pay the part-time employee would have received12
had he been employed on a full-time basis.13
(ii) The earnings to be considered for the thirteenth through the twenty-fourth14
month shall not exceed one hundred twenty-five percent of the earnings of the first15
through the twelfth month. The earnings to be considered for the final twelve16
months shall not exceed one hundred twenty-five percent of the earnings of the17
thirteenth through the twenty-fourth month. Nothing in this Subparagraph, however,18
shall change the method of determining the amount of earned compensation19
received.20
(b)(i) "Average compensation", for a member whose first employment21
making him eligible for membership in the system began on or after July 1, 2006,22
and subject to the limitations provided in this Subparagraph, regardless of a23
member's participation in a specialized subplan, means the average annual earned24
compensation of a state employee for the sixty highest months of successive25
employment or for the highest sixty successive joined months of employment where26
interruption of service occurred; however, average compensation for part-time27
employees who do not use sixty months of full-time employment for average28
compensation purposes shall be based on the base pay the part-time employee would29 SB NO. 11
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have received had he been employed on a full-time basis. This Item shall also be1
applicable to any judge, court officer, governor, lieutenant governor, clerk or2
sergeant-at-arms of the House of Representatives, secretary or sergeant-at-arms of3
the Senate, or state treasurer whose first employment making him eligible for4
membership in one of the state systems occurred on or after January 1, 2011.5
(ii) (b) The earnings to be considered for persons to whom Item (i) of this6
Subparagraph applies for the thirteenth through the twenty-fourth month shall not7
exceed one hundred fifteen percent of the earnings of the first through the twelfth8
month. The earnings to be considered for the twenty-fifth through the thirty-sixth9
month shall not exceed one hundred fifteen percent of the earnings of the thirteenth10
through the twenty-fourth month. The earnings to be considered for the thirty-11
seventh through the forty-eighth month shall not exceed one hundred fifteen percent12
of the earnings of the twenty-fifth through the thirty-sixth month. The earnings for13
the final twelve months shall not exceed one hundred fifteen percent of the earnings14
of the thirty-seventh through the forty-eighth month. The limitations on the15
computation of average compensation contained in this Item Subparagraph shall16
not apply to any twelve-month period during which compensation increased by more17
than fifteen percent over the previous twelve-month period solely because of an18
increase in compensation by a uniform systemwide increase adopted by the state19
Department of Civil Service and approved by the governor or because of a pay20
adjustment enacted by the legislature. This Item shall also be applicable to any21
judge, court officer, member of the Louisiana Legislature, governor, lieutenant22
governor, clerk or sergeant-at-arms of the House of Representatives, secretary or23
sergeant-at-arms of the Senate, or state treasurer whose first employment making24
him eligible for membership in one of the state systems occurred on or after January25
1, 2011.26
(iii) The provisions of this Subparagraph shall not apply to any person who27
receives an additional benefit pursuant to R.S. 11:444(A)(2)(b) or (c), 557, 582, or28
602 or R.S. 24:36 whose first employment making him eligible for membership in29 SB NO. 11
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one of the state systems occurred on or after January 1, 2011.1
* * *2
§416. Employment of retirees3
A. Regardless of age, if a retiree of the system is engaged or hereafter4
engages in employment which otherwise would render him eligible for membership5
in the system, he shall choose one of the following irrevocable options:6
* * *7
(3)(a) Option 3. The retiree may request immediate suspension of his benefit8
and become a member of this system, effective on the first day of reemployment.9
Upon such regaining of membership, he shall contribute thereafter at the current10
contribution rate as applicable to his position. Upon subsequent retirement, his11
suspended retirement allowance shall be restored to full force and effect. In addition,12
if he has worked and contributed for at least thirty-six months a period equal to or13
longer than his final average compensation period, his retirement allowance shall14
be increased by an amount attributable to his service and average compensation since15
reemployment based on the computation formula in effect at the time of subsequent16
retirement. If he has been reemployed for a period less than thirty-six months his17
final average compensation period, upon termination of reemployment the18
contributions paid by the retiree since his reemployment shall, upon application, be19
refunded to the retiree. In no event shall the member receive duplicate credit for20
unused sick and annual leave that had been included in the computation of his21
original retirement allowance. Any supplemental benefit shall be based on22
reemployment service credit only and shall not include any other specific amount23
which may otherwise be provided in the regular retirement benefit computation24
formula. In the event of the member's death prior to subsequent retirement, payment25
of benefits to the designated beneficiary or survivor shall be in accordance with the26
option selected by the member at the time of his original retirement. No change in27
the option originally selected by the member shall be permitted except as provided28
in R.S. 11:446(C). In no event shall the supplemental benefit exceed an amount29 SB NO. 11
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which, when combined with the original benefit, equals one hundred percent of the1
average compensation figure used to compute the supplemental benefit. Under no2
circumstances shall any person who has regained membership pursuant to the3
provisions of this Paragraph be allowed to purchase service credit for any period4
employed in the state service during which he continued to draw his retirement5
allowance.6
* * *7
§446. Mode of payment where option elected8
* * *9
H. The actuarial equivalent options available pursuant to this Section10
shall be calculated without regard for R.S. 11:249.11
* * *12
§558. Eligibility for retirement13
Eligibility for retirement under this Part shall be as follows:14
* * *15
D. For purposes of computing retirement benefits for persons covered by this16
Subpart, "average compensation" means the average annual earned compensation of17
the member for any three years sixty months of creditable service during which such18
earned compensation was the highest.19
* * *20
§701. Definitions21
As used in this Chapter, the following words and phrases have the meanings22
ascribed to them in this Section unless a different meaning is plainly required by the23
context:24
* * *25
(5)(a) "Average compensation" subject to the other provisions of this26
Paragraph, for any teacher whose first employment making him eligible for27
membership in one of the state systems occurred on or before December 31, 2010,28
means the average earnable compensation of a teacher for the three highest29 SB NO. 11
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successive years of employment, or the highest three successive joined years of1
employment where interruption of service occurred. For any teacher whose first2
employment making him eligible for membership in one of the state systems3
occurred on or after January 1, 2011, "average compensation" means his means the4
average earnable compensation for the five highest successive years of employment,5
or the highest five successive joined years where interruption of service occurred.6
The computation of such average compensation shall be in accordance with the7
following guidelines:8
* * *9
(b) The thirty-six or sixty months used for average compensation, as the case10
may be, cannot cover a period when the member receives more than three years or11
five years of service credit respectively.12
* * *13
§766. Part-time employees; creditable service; benefit eligibility; computation of14
benefits15
* * *16
D. Average compensation for part-time employees who do not use thirty-six17
sixty months of full-time employment for average compensation purposes shall be18
based on the earnings the part-time employee would have received had he been19
employed on a full-time basis. However, any member who has more than one-half20
of his computed service credit by virtue of part-time employment shall have his21
average compensation limited to his average compensation as a part-time employee22
and shall not be allowed to use any compensation as a full-time employee in the23
computation of his average compensation.24
* * *25
§783. Selection of option for method of payment after death of member26
* * *27
L. The actuarial equivalent options available pursuant to this Section28
shall be calculated without regard for R.S. 11:249.29 SB NO. 11
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* * *1
§1002. Definitions2
As used in this Chapter, the following words and phrases shall have the3
meanings ascribed to them in this Section unless a different meaning is plainly4
required by the context:5
* * *6
(6)(a) "Average compensation", for a member whose first employment7
making him eligible for membership in the system began on or before June 30, 2006,8
shall be based on the thirty-six highest successive months of employment, or on the9
highest thirty-six successive joined months of employment where interruption of10
service occurred; however, the average compensation amount to be considered for11
the first through the twelfth month shall not exceed the compensation for the12
immediately preceding twelve months by more than ten percent. The amount for the13
thirteenth through the twenty-fourth month shall not exceed the lesser of the14
maximum allowable compensation amount or the actual compensation amount for15
the first through the twelfth month by more than ten percent. The amount for the16
twenty-fifth through the thirty-sixth month shall not exceed the lesser of the17
maximum allowable compensation amount or the actual compensation amount for18
the thirteenth through the twenty-fourth month by more than ten percent. The19
limitations on the computation of average compensation in this Paragraph shall not20
apply to any of the twelve-month periods where compensation increased by more21
than one hundred ten percent over the previous twelve-month period solely because22
of an increase in compensation by legislative act or by a city/parish system-wide23
salary increase.24
(b) "Average compensation", for a member whose first employment making25
him eligible for membership in the system began on or after July 1, 2006, whose first26
employment making him eligible for membership in one of the state systems27
occurred on or before June 30, 2010, shall be based on the sixty highest successive28
months of employment, or on the highest sixty successive joined months of29 SB NO. 11
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employment where interruption of service occurred; however, the average1
compensation amount for the thirteenth through the twenty-fourth month shall not2
exceed the actual compensation amount for the first through the twelfth month by3
more than ten percent. The amount for the twenty-fifth through the thirty-sixth4
month shall not exceed the lesser of the maximum allowable compensation amount5
or the actual compensation amount for the thirteenth through the twenty-fourth6
month by more than ten percent. The amount for the thirty-seventh through the7
forty-eighth month shall not exceed the lesser of the maximum allowable8
compensation amount or the actual compensation amount for the twenty-fifth9
through the thirty-sixth month by more than ten percent. The amount for the forty-10
ninth through the sixtieth month shall not exceed the lesser of the maximum11
allowable compensation amount or the actual compensation amount for the thirty-12
seventh through the forty-eighth month by more than ten percent. The limitations13
on the computation of average compensation contained in this Paragraph shall not14
apply to any twelve-month period during which compensation increased by more15
than one hundred ten percent over the previous twelve-month period solely because16
of an increase in compensation by legislative act or by a city/parish system-wide17
salary increase.18
(c) "Average compensation", for a member whose first employment making19
him eligible for membership in one of the state systems occurred on or after July 1,20
2010, shall be based on the sixty highest successive months of employment, or on21
the highest sixty successive joined months of employment where interruption of22
service occurred;.23
however, (i) For a member whose first employment making him eligible24
for membership in the system began on or before June 30, 2010, the average25
compensation amount for the thirteenth through the twenty-fourth month shall26
not exceed the actual compensation amount for the first through the twelfth27
month by more than ten percent. The amount for the twenty-fifth through the28
thirty-sixth month shall not exceed the lesser of the maximum allowable29 SB NO. 11
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compensation amount or the actual compensation amount for the thirteenth1
through the twenty-fourth month by more than ten percent. The amount for2
the thirty-seventh through the forty-eighth month shall not exceed the lesser of3
the maximum allowable compensation amount or the actual compensation4
amount for the twenty-fifth through the thirty-sixth month by more than ten5
percent. The amount for the final twelve months shall not exceed the lesser of6
the maximum allowable compensation amount or the actual compensation7
amount for the thirty-seventh through the forty-eighth month by more than ten8
percent. The limitations on the computation of average compensation contained9
in this Item shall not apply to any twelve-month period during which10
compensation increased by more than ten percent over the previous11
twelve-month period solely because of an increase in compensation by legislative12
act or by a city/parish system-wide salary increase.13
(ii) For a member whose first employment making him eligible for14
membership in the system began on or after July 1, 2010, the average15
compensation amount for the thirteenth through the twenty-fourth month shall not16
exceed the actual compensation amount for the first through the twelfth month by17
more than fifteen percent. The amount for the twenty-fifth through the thirty-sixth18
month shall not exceed the lesser of the maximum allowable compensation amount19
or the actual compensation amount for the thirteenth through the twenty-fourth20
month by more than fifteen percent. The amount for the thirty-seventh through the21
forty-eighth month shall not exceed the lesser of the maximum allowable22
compensation amount or the actual compensation amount for the twenty-fifth23
through the thirty-sixth month by more than fifteen percent . The amount for the24
forty-ninth through the sixtieth month shall not exceed the lesser of the maximum25
allowable compensation amount or the actual compensation amount for the thirty-26
seventh through the forty-eighth month by more than fifteen percent. The limitations27
on the computation of average compensation contained in this Subparagraph Item28
shall not apply to any twelve-month period during which compensation increased by29 SB NO. 11
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more than one hundred fifteen percent, over the previous twelve-month period solely1
because of an increase in compensation by legislative act or by a city/parish2
system-wide salary increase.3
(d)(b) Notwithstanding any other provision of law to the contrary, "average4
compensation" shall not include any amount in excess of the limitation provided in5
R.S. 11:1141.3.6
* * *7
§1143. Part-time employees; creditable service; benefit eligibility; computation of8
benefits9
* * *10
D. Average compensation for part-time employees who do not use thirty-six11
sixty months of full-time employment for average compensation purposes shall be12
based on the earnings the part-time employee would have received had he been13
employed on a full-time basis. However, any member who has more than one-half14
of his computed service credit by virtue of part-time employment shall have his15
average compensation limited to his average compensation as a part-time employee16
and shall not be allowed to use any compensation as a full-time employee in the17
computation of his average compensation.18
* * *19
§1150. Allowances; optional allowances20
A. Upon application for retirement, any member may elect to receive his21
benefit in a retirement allowance payable throughout his life. In no case shall the22
system pay total benefits of less than an amount equal to the member's accumulated23
contributions. If the member, following retirement, should die prior to receiving in24
total benefits an amount equal to his accumulated contributions, the balance shall be25
paid to the person nominated by the member by written designation, which shall be26
acknowledged and filed with the board of trustees at the time of retirement, or.27
B. Upon application for retirement, any member may elect to receive the28
actuarial equivalent at that time of his retirement allowance in a reduced retirement29 SB NO. 11
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allowance payable throughout life with the options set forth in the numbered1
paragraphs below. No optional selection shall be effective in case a beneficiary dies2
within thirty days after the effective date of retirement, and such a beneficiary shall3
be considered as an active member at the time of death.4
(1) If he dies before he has received in annuity payments the present value5
of his annuity as it was at the time of his retirement, the balance shall be paid to his6
legal representatives or to any person he shall nominate by written designation7
acknowledged and filed with the board of trustees.8
(2) Upon his death, his reduced retirement allowance shall be continued9
throughout the life of and paid to any person he shall nominate by written10
designation acknowledged and filed with the board of trustees at the time of his11
retirement.12
(3) Upon his death, one-half of his reduced retirement allowance shall be13
continued throughout the life of and paid to any person he shall nominate by written14
designation acknowledged and filed with the board of trustees at the time of his15
retirement.16
(4) Some other benefit or benefits shall be paid either to the member or to any17
person or persons he shall nominate provided such other benefit or benefits, together18
with the reduced retirement allowance, shall be certified by the actuary to be of19
equivalent actuarial value to his retirement allowance and approved by the board of20
trustees.21
(5) The actuarial equivalent option available pursuant to this Subsection22
shall be calculated without regard for R.S. 11:249.23
* * *24
§1152. Deferred Retirement Option Plan25
* * *26
J. Monthly retirement benefits payable to a participant after termination of27
participation in the plan and employment shall be calculated as follows:28
* * *29 SB NO. 11
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(3)(a) If the participant, whose first employment making him eligible for1
membership in the system began on or before June 30, 2006, continues employment2
after termination of participation in the plan for a period of less than thirty-six3
months his final average compensation period, his monthly retirement benefit shall4
equal his base benefit plus an amount based upon the service credit for the additional5
employment, together with conversion of the net amount of sick and annual leave6
accumulated during that period of employment, based upon the final average7
compensation used to calculate the monthly credit.8
(b) If the participant, whose first employm ent making him eligible for9
membership in the system began on or after July 1, 2006, continues employment10
after termination of participation in the plan for a period of less than sixty months,11
his monthly retirement benefit shall equal his base benefit plus an amount based12
upon the service credit for the additional employment, together with conversion of13
the net amount of sick and annual leave accumulated during that period of14
employment, based upon the final average compensation used to calculate the15
monthly credit.16
(4)(a) If the participant, whose first employment making him eligible for17
membership in the system began on or before June 30, 2006, continues employment18
after termination of participation in the plan for a period of thirty-six months or more19
equal to or longer than his final average compensation period, his monthly20
retirement benefit shall equal his base benefit plus an amount based upon the service21
credit for the additional employment, together with conversion of the net amount of22
sick and annual leave accumulated during that period of employment, based upon the23
higher of the final average compensation when the member entered the plan or for24
the period of employment after termination of participation in the plan.25
(b) If the participant, whose first employment making him eligible for26
membership in the system began on or after July 1, 2006, continues employment27
after termination of participation in the plan for a period of sixty months or more, his28
monthly retirement benefit shall equal his base benefit plus an amount based upon29 SB NO. 11
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the service credit for the additional employment, together with conversion of the net1
amount of sick and annual leave accumulated during that period of employment,2
based upon the higher of the final average compensation when the member entered3
the plan or for the period of employment after termination of participation in the4
plan.5
* * *6
§1310. Average salary; method of determining 7
A. * * *8
(2)(a) With respect to persons becoming employed on and after September9
8, 1978, and whose first employment making them eligible for membership in one10
of the state systems occurred on or before December 31, 2010, the term "average11
salary" as used in this Chapter for the purpose of determining pension payments and12
retirement is the average salary including any additional pay or salary provided by13
the legislature over and above that set by the Civil Service Commission, received for14
the thirty-six sixty month period ending on the last day of the month immediately15
preceding the date of retirement or date of death or for any thirty-six sixty16
consecutive months, whichever is the greatest. For the purposes of computation,17
"average salary" shall not include overtime, expenses, or clothing allowances.18
(b) The earnings to be considered for the thirteenth through the twenty-fourth19
month shall not exceed one hundred twenty-fi ve fifteen percent of the earnings of20
the first through the twelfth month. The earnings to be considered for the twenty-21
fifth through the thirty-sixth month shall not exceed one hundred fifteen22
percent of the earnings of the thirteenth through the twenty-fourth month. The23
earnings to be considered for the thirty-seventh through the forty-eighth month24
shall not exceed one hundred fifteen percent of the earnings of the twenty-fifth25
through the thirty-sixth month. The earnings to be considered for the final twelve26
months shall not exceed one hundred twenty-five fifteen percent of the earnings of27
the thirteenth thirty-seventh through the twenty-fourth forty-eighth month.28
Nothing in this Subparagraph, however, shall change the method of determining the29 SB NO. 11
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amount of earned compensation received.1
* * *2
Section 2. R.S. 11:542, 883.1, 1145.1, and 1332 are hereby repealed.3
Section 3. A. The provisions of this Act shall not cause the average compensation4
expressed in dollars of any member retiring or entering a deferred retirement option plan on5
or after July 1, 2014, to be less than such member's average compensation expressed in6
dollars as it existed on June 30, 2014.7
B. The provisions of this Act providing for a sixty-month average compensation8
period shall not apply to any person whose date of retirement or entry into a deferred9
retirement option plan occurs on or before June 30, 2014.10
C. The provisions of this Act providing for a sixty-month average compensation11
period shall be implemented according to the provisions of this Subsection.12
(1) For transitional purposes, the provisions of R.S. 11:403(5), 701(5), 1002(6), and13
1310(A)(2) as amended by this Act shall be phased in as follows: 14
(a) For members retiring before July 1, 2014, the provisions of R.S. 11:403(5),15
701(5), 1002(6), and 1310(A)(2) shall apply as they existed before the effective date of this16
Act.17
(b) For those members retiring on or after July 1, 2014, and on or before June 30,18
2016, the period used to calculate monthly average final compensation shall be thirty-six19
months plus the number of whole months since July 1, 2014. 20
(2) For transitional purposes, the provisions of this Act as applied to R.S. 11:450(D),21
789(D), and 1152(J) shall be phased in as follows:22
(a) For members entering a deferred retirement option plan before July 1, 2016, the23
period of additional service required and utilized to calculate a revised average compensation24
for the supplemental benefit after deferred retirement option plan participation shall be equal25
to thirty-six months plus the number of whole months from July 1, 2014, to the date of26
deferred retirement option plan entry. 27
(b) For members entering the plan on or after July 1, 2016, the provisions of this Act28
shall apply.29 SB NO. 11
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Section 4. Any retiree who elected to receive an actuarially-reduced retirement1
allowance pursuant to R.S. 11:247 shall continue to be governed by the provisions in effect2
before the effective date of this Act. Each permanent benefit increase pursuant to the3
provisions of this Act shall be computed on the basis of the retiree's benefit on the date the4
increase is granted. If the permanent benefit increase is scheduled to be effective on the5
same date as the annual cost-of-living adjustment provided for in R.S. 11:247, the annual6
cost-of-living adjustment shall be calculated first.7
Section 5. Nothing in this Act shall be construed to prevent the legislature from8
delaying, reducing, or otherwise altering the permanent benefit increases designated by this9
Act as "employer funded".10
Section 6. The normal cost increase resulting from the provisions of R.S. 11:24911
contained in this Act shall be funded with the savings from the transition to a sixty-month12
average compensation and with the employee contributions required pursuant to the13
provisions of this Act. The payments for the unfunded accrued liability created by the14
provisions of R.S. 11:249 contained in this Act shall be funded with the additional employer15
contributions required by the provisions of R.S. 11:102(B)(3)(e) contained in this Act. The16
additional costs of this Act, if any, shall be funded with additional employer contributions17
in compliance with Article X, Section 29(F) of the Constitution of Louisiana.18
Section 7. The provisions of this Act shall be nonseverable.19
Section 8. This Act shall become effective on June 30, 2013; if vetoed by the20
governor and subsequently approved by the legislature, this Act shall become effective on21
June 30, 2013, or on the day following such approval by the legislature, whichever is later.22
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 for permanent post-retirement benefit increases (PBIs) for retirees
of the four state retirement systems:
(1)Louisiana State Employees' Retirement System.
(2)Teachers' Retirement System of Louisiana.
(3)Louisiana School Employees' Retirement System. SB NO. 11
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(4)Louisiana State Police Retirement System.
Proposed law provides for additional employee contributions of 3% of pay from members
of the systems, beginning July 1, 2013.
Proposed law provides for a 60-month final average compensation period for all members
of the systems, with transition from the present law 36-month period to begin July 1, 2014,
and to continue in one-month increments through June 30, 2016.
Proposed law provides for PBIs for current and future retirees, survivors, and beneficiaries
of the systems as follows:
ELIGIBILITY
Proposed law provides that, to be eligible for a benefit increase pursuant to proposed law:
(1)A retiree shall have been separated from employment and receiving an annuitized
benefit for at least five years and shall have attained at least age 65.
(2)A nonretiree survivor or beneficiary shall be receiving an annuitized benefit related
to service of a person who would have attained at least age 65, and the annuity
payments shall have been received by the retiree or the beneficiary or both combined
for at least five years.
(3)Any person receiving disability benefits or receiving benefits based on the death of
a disability retiree shall be receiving an annuitized benefit, and the annuity payments
shall have been received by the retiree or the beneficiary or both combined for at
least five years.
INCREASE AMOUNT
Proposed law provides that each PBI shall be the greater of:
(1)One percent.
(2)The lesser of:
(a)Two percent.
(b)The percent increase necessary to preserve 80% of the purchasing power of
the recipient as of June 30, 2013, or his retirement date if later.
Proposed law specifies that the determination of diminution of purchasing power shall be
computed using the increases, if any, provided to persons receiving old age, survivors, and
disability insurance benefits from social security for the period beginning on the September
30
th
of the year of retirement and ending on the September 30
th
immediately preceding the
PBI.
Proposed law provides that each PBI shall be payable based only on an amount not to exceed
$50,000 of the recipient's annual benefit. Specifies, however, for increases payable July 1,
2019, and thereafter the $50,000 limit shall be increased in an amount equal to the increases,
if any, provided to persons receiving old age, survivors, and disability insurance benefits
from social security for the 24 month period ending on the September 30
th
immediately
preceding the PBI.
CLASSIFICATION; TIMING
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Proposed law provides that employer-funded increases are those payable to any recipient
whose annuitized benefit is based exclusively on service credited to the person on or before
June 30, 2013. Provides that these PBIs shall be paid on July 1
st
of each odd-numbered
calendar year beginning July 1, 2013.
Proposed law provides that employee-funded increases are those payable to any recipient
whose annuitized benefit is based exclusively on service credited to the person on or after
July 1, 2013. Provides that these PBIs shall be paid on July 1
st
of each odd-numbered
calendar year beginning July 1, 2019.
Proposed law provides that additive increases are those payable to any recipient whose
annuitized benefits are based partially on service credited to the person on or before June 30,
2013, and partially on service credited to the person on or after July 1, 2013. Provides that
these PBIs shall be paid on July 1
st
of each odd-numbered calendar year beginning July 1,
2019. Specifies that for each recipient, the portion of each additive increase considered to
be an employee-funded accrued benefit shall be equal to the ratio of years of service credited
to the system member on or after July 1, 2013, to total years of service credited to him.
Effective June 30, 2013.
(Amends R.S. 11:62, 102(B)(3)(d)(i) and (iv) and (5)(a), 247(A)(1) and (D), 403(5),
416(A)(3)(a), 558(D), 701(5)(a)(intro para) and (b), 766(D), 1002(6), 1143(D), 1150,
1152(J)(3) and (4), and 1310(A)(2); adds R.S. 11:102(B)(3)(e), (C)(4)(e), and (D)(4)(e),
102.1(C)(6), 102.2(C)(6), 249, 446(H), and 783(L); repeals R.S. 11:542, 883.1, 1145.1, and
1332)