2013 REGULAR SESSION
ACTUARIAL NOTE S B 2
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Senate Bill 2 SLS 13RS-100
Engrossed
Author: Senator Barrow Peacock
Date: April 18, 2013
LLA Note SB 2.02
Organizations Affected:
Municipal Employees’ Retirement
System
EG NO IMPACT FC SG EX
The Note was prepared by the Actuarial Services Department of the Office of the
Legislative Auditor. The attachment of the Note to SB 2 provides compliance with
the requirements of R.S. 24:521.
Bill Header: MUNICIPAL EMPLOYEE RET. To provide for board membership of the Municipal Employees’ Retirement System.
(6/30/13)
Cost Summary:
Actuarial Cost/(Savings) to Retirement Systems and OGB $0
Total Five Year Fiscal Cost
Expenditures $0
Revenues $0
Estimated Actuarial Impact:
The chart below shows the estimated increase/(decrease) in the actuarial value of benefits, if any, attributable to the proposed
legislation. Note: it includes the present value cost of fiscal costs associated with benefit changes. It does not include present value
costs associated with administration or other fiscal concerns.
Increase (Decrease) in
Actuarial Cost (Savings) to: The Actuarial Present Value
All Louisiana Public Retirement Systems $0
Other Post Retirement Benefits $0
Total $0
Estimated Fiscal Impact:
The chart below shows the estimated fiscal impact of the proposed legislation. This represents the effect on cash flows for
government entities including the retirement systems and the Office of Group Benefits.
EXPENDITURES 2013-14 2014-15 2015-16 2016-17 2017-2018 5 Year Total
State General Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Agy Self Generated 0 0 0 0 0 0
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds 0 0 0 0 0 0
Annual Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
REVENUES 2013-14 2014-15 2015-16 2016-17 2017-2018 5 Year Total
State General Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Agy Self Generated 0 0 0 0 0 0
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds 0 0 0 0 0 0
Annual Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Bill Information:
Current Law
Current law provides that the board of trustees for the Municipal Employees’ Retirement System consists of nine members
determined in the following manner.
1. Six active and contributing members of MERS with at least 10 or more years of service, elected by system members.
2. One member who is the president of the Louisiana Municipal Association, ex officio. 2013 REGULAR SESSION
ACTUARIAL NOTE S B 2
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3. One member who is the chairman of the Senate Retirement Committee, ex officio, or his designee.
4. One member who is the chairman of the House Retirement Committee, ex officio, or his designee.
Proposed Law
Under SB 2, two new members will be added to the MERS board of trustees. These members will be determined as follows.
1. One member who shall be the commissioner of administration, or his designee.
2. One member who shall be the state treasurer, or his designee.
Implications of the Proposed Changes
As a result of SB 2, the number of members serving on the MERS board of trustees will increase from nine to eleven.
Representation by members of the system will remain at 6 members, the number of trustee representing the interests of the plan
sponsor and government will increase from 3 members to 5 members.
Cost Analysis:
Analysis of Actuarial Costs
Retirement Systems
There are no actuarial costs associated with SB 2.
Other Post Retirement Benefits
SB 2 has no effect on actuarial costs associated with post-retirement benefits other than pensions.
Analysis of Fiscal Costs
Administrative costs associated with the addition of two additional members to the board of trustees will be negligible. The new
trustees are likely to be state employees and therefore will not be eligible for per diem expenses. Incidental travel expenses
should also be negligible.
Actuarial Credentials:
Paul T. Richmond is the Manager of Actuarial Services for the Louisiana Legislative Auditor. He is an Enrolled Actuary, a
member of the American Academy of Actuaries, a member of the Society of Actuaries and has met the Qualification Standards of
the American Academy of Actuaries to render the actuarial opinion contained herein.
Dual Referral:
Senate House
13.5.1 ≥ $100,000 Annual Fiscal Cost 6.8(F) ≥ $500,000 Annual Fiscal Cost
13.5.2 ≥ $500,000 Annual Tax or Fee Change 6.8(G) ≥ $500,000 Annual Tax or Fee Change