The original instrument was prepared by Margaret M. Corley. The following
digest, which constitutes no part of the legislative instrument, was prepared by
Laura Gail Sullivan.
DIGEST
Present constitution (Art. X, Sect. 29(E)(1)) provides that the legislature shall establish, by law,
the particular method of actuarial valuation to be employed by each state or statewide retirement
system for purposes of attaining and maintaining the actuarial soundness of such system.
Present law (R.S. 11:4(A)(1)(a) and (b)) provides that the La. State Employees' Retirement
system (LASERS) and the Teachers' Retirement System of La. (TRSL) are state retirement
systems.
Proposed law retains present law.
Present law (R.S. 11:22(B)(6) and (13)) provides that LASERS' and TRSL's valuation method
shall be projected unit credit.
Proposed law changes the valuation method of each system to entry age normal, effective with
the adoption by the Public Retirement Systems' Actuarial Committee of a valuation for that
system utilizing that method and including changes to the actuarially-assumed rate of return, the
salary assumptions, and the method of valuing assets before the entry age normal method statute
becomes effective.
Present law provides for payment of the unfunded accrued liability of the systems, including
payments on the original amortization base and the experience account amortization base and for
allocations to the system experience account when system investment earnings exceed a certain
threshold.
Proposed law specifies that allocations to the original amortization base, the experience account
amortization base, and the experience account are made only from earnings in excess of 8.25%.
Effective June 1, 2013.
(Amends R.S. 11:22(B)(6) and (13), 102.1(B)(4) and (C)(4), 102.2(B)(4) and (C)(4),
542(A)(2)(a) and (F), and 883.1(A)(2)(a) and (G))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Retirement to the original bill
1. Specifies that credits to the original amortization base, the experience account
amortization base, and the experience account are made only from earnings in
excess of 8.25%.
2. Requires each system to prepare and the Public Retirement Systems' Actuarial
Committee to adopt a valuation utilizing the new valuation method and including
changes to the actuarially-assumed rate of return, the salary assumptions, and the
method of valuing assets before the entry age normal method statute becomes
effective.
3. Provides an effective date of June 1, 2013, for the requirement that the Committee
adopt a new valuation and the 8.25% threshold for application of excess returns to
the three funds.