Louisiana House Bill HB34

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14

Caption

Provides a supplemental benefit increase to qualifying retirees and beneficiaries of the La. State Employees' Retirement System (OR +$181,964,968 APV)

Impact

If enacted, HB 34 will significantly affect state laws concerning employee retirement benefits, specifically increasing the actuarial present value of future defined benefits by approximately $181,964,968. The measure is designed to address the needs of eligible retirees and beneficiaries by providing them with a more substantial and predictable source of income. Furthermore, while the costs will increase for the LASERS fund, the legislation is framed as essential for supporting the financial health of retired employees, thereby enhancing their retirement security. Importantly, this bill complies with the Louisiana Constitution by ensuring that unfunded liabilities connected to benefit increases are amortized responsibly.

Summary

House Bill 34 aims to provide a permanent benefit increase to eligible retirees and beneficiaries of the Louisiana State Employees' Retirement System (LASERS). Specifically, it proposes using the entire balance of the LASERS Experience Account as of July 1, 2014, to fund this increase, which is estimated to be 2.8% of the current annual benefits of qualifying members. The bill stipulates that benefits will be calculated on the first $96,931 of the payable benefit amount, with a maximum increase of $2,714.08 per year. This amendment aims to enhance the financial support for retirees, ensuring stability and a better quality of life after retirement.

Sentiment

The general sentiment surrounding HB 34 appears to be largely positive among supporters, particularly those advocating for retirees. Many view the bill as a vital step in acknowledging and addressing the financial challenges faced by those who dedicated their careers to public service. However, there may be concerns regarding the long-term sustainability of such benefit increases given their financial implications, leading to some contention among legislators focused on fiscal responsibility. Overall, public sentiments likely revolve around prioritizing the welfare of retirees while balancing state financial health.

Contention

Notable points of contention may arise about the sustainability of the pension fund following the implementation of the benefit increase proposed in HB 34. Critics may express worries regarding the fairness of using funds from the Experience Account and its potential impact on future retirees. There is an inherent tension between adequately compensating current retirees and ensuring that future generations are not left with decreased benefits. This underlying debate emphasizes the need to assess the long-term fiscal strategies of the retirement system and how they adapt to changing economic conditions.