2013 REGULAR SESSION
ACTUARIAL NOTE S B 3
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Senate Bill 3 SLS 13RS-116
Engrossed
Author: Senator Ronnie Johns
Date: April 18, 2013
LLA Note SB 3.02
Organizations Affected:
Municipal Employees’ Retirement
System
EG $300,000 APV
The Note was prepared by the Actuarial Services Department of the Office of the
Legislative Auditor. The attachment of the Note to SB 3 provides compliance with
the requirements of R.S. 24:521.
Bill Header: Provides for participation by the West Calcasieu Community Center employees. (6/30/13).
Cost Summary:
Actuarial Cost/(Savings) to Retirement Systems and OGB $300,000
Total Five Year Fiscal Cost
Expenditures Increase
Revenues Increase
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 oth er fiscal concerns.
Increase (Decrease) in
Actuarial Cost (Savings) to: The Actuarial Present Value
All Louisiana Public Retirement Systems $300,000
Other Post Retirement Benefits $0
Total $300,000
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 Increase Increase Increase Increase Increase Increase
Annual Total Increase Increase Increase Increase Increase Increase
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 Increase Increase Increase Increase Increase Increase
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 Increase Increase Increase Increase Increase Increase
Bill Information:
Current Law
Various employers are identified as being “participating” employers in the Municipal Employees’ Retirement System (MERS).
Employees of these employers become members of MERS as a condition of their employment.
2013 REGULAR SESSION
ACTUARIAL NOTE S B 3
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Proposed Law
Under SB 3, the West Calcasieu Community Center will be added to the list of employers participating in MERS. Employees of
the Community Center will become members of MERS Plan B as a condition of their employment.
Implications of the Proposed Changes
As a result of SB 3, membership in MERS will increase.
Cost Analysis:
Analysis of Actuarial Costs
Retirement Systems
Three full-time employees of the West Calcasieu Community Center will become members of MERS Plan B i f SB 3 is
enacted. The addition of these members to Plan B will have the following effect on actuarial cost factors.
1. The present value of future benefits for Plan B will increase approximately $300,000.
2. The present value of future normal costs will also increase by about $300,000.
3. Annual payroll from which normal costs are collected will increase.
4. The effect on the normal cost rate is negligible.
5. No additional unfunded accrued liabilities will be created.
Other Post Retirement Benefits
SB 3 has no effect on actuarial costs associated with post- retirement benefits other than pensions.
Analysis of Fiscal Costs
SB 3 will have the following effect on fiscal costs during the five year measurement period.
Expenditures:
1. Expenditures from Local Funds will increase. In general, the increase in expenditures will be limited to the West
Calcasieu Community Center. The effect on expenditures for other participating employers in MERS will be negligible.
2. Benefits payable from MERS (Agy Self-Generated) will increase during the five year fiscal measurement period only to
the extent that an employee of the Center terminates employment and requests a refund of his own contributions from the
retirement system.
Revenues:
• MERS revenues (Agy Self-Generated) will increase. A portion of that revenue will come from the West Calcasieu
Community Center in the form of employer contributions and a portion will come from employees of the Center in the
form of employee contributions.
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