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Regular Session, 2014
HOUSE BILL NO. 31
BY REPRESENTATIVES JONES AND HAVARD
RETIREMENT/COLAS: Provides a permanent benefit increase paid from the experience
account to certain retired members and beneficiaries of the Teachers' Retirement
System of Louisiana
AN ACT1
To provide a permanent benefit increase to certain retirees and beneficiaries of the Teachers'2
Retirement System of Louisiana in conformity with the provisions of the system's3
experience account; to provide for eligibility for the increase; to provide for4
calculation of the increase; to provide for funding; to provide an effective date; and5
to provide for related matters.6
Notice of intention to introduce this Act has been published7
as provided by Article X, Section 29(C) of the Constitution8
of Louisiana.9
Be it enacted by the Legislature of Louisiana:10
Section 1. Findings. (A) The legislature created the experience account within the11
Teachers' Retirement System of Louisiana as a mechanism for funding, on an actuarial basis,12
permanent benefit increases for system retirees and beneficiaries. The experience account13
is credited with half of the system's investment gains over certain threshold amounts and14
with interest on funds in the account. The legislature has restricted the amount that can be15
in the account at any one time; the funds in the account may not exceed an amount sufficient16
to fund two permanent benefit increases to eligible retirees and beneficiaries. The legislature17
may authorize the system to use the funds to pay a permanent benefit increase to eligible18
retirees and beneficiaries.19
(B) According to the June 30, 2013, valuation adopted by the system's board of20
trustees, the legislature finds that in Fiscal Year 2013, the system attained an actuarial rate21 HLS 14RS-358 ORIGINAL
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of return of thirteen and forty-one hundredths percent. This rate of return is above the1
system's target of eight and one quarter percent. According to the June 30, 2013, valuation2
adopted by the system's board of trustees, approximately two hundred nineteen million seven3
hundred thousand dollars in excess earnings was deposited into the experience account. The4
legislative auditor's actuary and the system's actuary agree that this amount would be5
sufficient to increase eligible retiree and beneficiary benefits by one and six tenths percent.6
(C) In accordance with R.S. 11:883.1(F), the legislature finds that any increase7
granted pursuant to this Act shall be based only on ninety-three thousand seven hundred8
fifty-five dollars of a retiree's annual benefit.9
(D) The legislature finds that the following retirees and beneficiaries are eligible for10
permanent benefit increases funded by the experience account:11
(1) Any non-disability retiree who has attained the age of sixty and who has been12
retired for at least one year.13
(2) Any disability retiree, regardless of age, who has been retired for at least one14
year and any beneficiary of such a retiree.15
(3) Any beneficiary of a non-disability retiree if the beneficiary or the retiree, or both16
combined, have received benefits for at least one year and the retiree would have attained17
age sixty by the time of the increase.18
(E) In accordance with R.S. 11:883.1(C), the legislature finds that any increase19
granted by the provisions of this Act shall not exceed the lesser of:20
(1) Three percent.21
(2) A sum equal to the consumer price index, United States city average for all urban22
consumers (CPI-U), as prepared by the United States Department of Labor, Bureau of Labor23
Statistics, for the calendar year immediately preceding the permanent benefit increase.24
(F) The legislature finds that the consumer price index, United States city average25
for all urban consumers (CPI-U), as prepared by the United States Department of Labor,26
Bureau of Labor Statistics, for the calendar year 2013 was one and one half of one percent.27
Section 2. Authorization. In accordance with laws providing for the system's28
experience account and the findings in this Act, the Legislature of Louisiana hereby grants29
a permanent benefit increase of one and one half of one percent, effective July 1, 2014, to30 HLS 14RS-358 ORIGINAL
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all eligible retirees and beneficiaries of the Teachers' Retirement System of Louisiana. No1
further action on the part of the legislature shall be required to implement such increase.2
Section 3. The cost of this Act, if any, shall be funded with monies from the3
Teachers' Retirement System of Louisiana experience account in compliance with Article4
X, Section 29(F) of the Constitution of Louisiana.5
Section 4. This Act shall become effective on June 30, 2014; if vetoed by the6
governor and subsequently approved by the legislature, this Act shall become effective on7
June 30, 2014, or on the day following such approval by the legislature, whichever is later.8
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Jones HB No. 31
Abstract: Provides a permanent benefit increase of 1.5%, funded by the Teachers'
Retirement System of La. (TRSL) experience account, to eligible retirees and
beneficiaries of TRSL.
Present law provides that the board of trustees of TRSL may recommend to the president of
the Senate and the speaker of the House of Representatives that the system be permitted to
grant a permanent benefit increase, sometimes called a cost-of-living adjustment or COLA,
to retirees and beneficiaries whenever the balance in the TRSL experience account is
sufficient to fund such benefit.
Present law provides the board of trustees shall not grant a permanent benefit increase unless
such increase has been approved by the legislature by concurrent resolution adopted by the
favorable vote of a majority of the elected members of each house.
Notwithstanding present statutory law providing for legislative approval by resolution,
present constitution provides that benefits from public retirement systems may only be
altered by legislative enactment. Present constitution further requires a 2/3 vote of the
legislature to pass any such change in benefits that has an actuarial cost.
Present law limits the amount of the increase to the lesser of 3% or the increase in a
specified consumer price index for the previous calendar year; for 2013 that increase was
1.5%.
Proposed law grants a permanent benefit increase of 1.5% to all qualified retirees and
beneficiaries of TRSL.
Pursuant to present constitution (Art. X, ยง29(F)), proposed law further provides that the cost
of such increase shall be paid by funds from the system's experience account.
Effective June 30, 2014.