HLS 14RS-722 ORIGINAL
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Regular Session, 2014
HOUSE BILL NO. 85
BY REPRESENTATIVE KATRINA JACKSON
RETIREMENT/COLAS: Provides a permanent benefit increase paid from the experience
account to certain retired members and beneficiaries of the Louisiana State
Employees' Retirement System
AN ACT1
To provide a permanent benefit increase to certain retirees and beneficiaries of the Louisiana2
State Employees' Retirement System in conformity with the provisions of the3
system's 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. The legislature finds that the experience account of the Louisiana State11
Employees' Retirement System was created for the purpose of accumulating money12
sufficient to provide actuarial funding of permanent post-retirement benefit increases for13
retirees and the beneficiaries of the system. The legislature further finds that the experience14
account is credited with a portion of the system's investment gain in excess of certain15
thresholds and with interest on funds in the account; however, the amount in the experience16
account shall not exceed the reserve necessary to grant two permanent benefit increases.17
Section 2. The legislature finds that permanent benefit increases funded by the18
experience account monies are payable to regular retirees who have been retired for at least19
one year and who have attained the age of sixty years; to disability retirees who have been20 HLS 14RS-722 ORIGINAL
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retired at least one year regardless of age; to beneficiaries of retirees who would have met1
the applicable criteria to receive the increase if they had survived; and to nonretiree2
beneficiaries who have received a benefit for at least one year and whose benefits originate3
from service of deceased members who would have attained the age of sixty. The legislature4
further finds that any increase payable in 2014 shall be calculated only on ninety-six5
thousand nine hundred thirty-one dollars of a retirement benefit.6
Section 3. The legislature finds that, in accordance with the provisions of R.S.7
11:542, the board of trustees of the Louisiana State Employees' Retirement System has8
adopted a resolution recommending to the president of the Senate and the speaker of the9
House of Representatives that the legislature grant a permanent benefit increase to the10
eligible retirees and beneficiaries of the system in accordance with the provisions of R.S.11
11:542 and Article X, Section 29(F) of the Constitution of Louisiana.12
Section 4. The legislature finds that the resolution presented to the presiding officers13
of this body contained a recitation of the statutorily-required conditions and specification of14
the satisfaction of each as follows:15
(A) For the plan year that ended June 30, 2013, the Louisiana State Employees'16
Retirement System earned an actuarial rate of return of fourteen and five one hundredths of17
one percent, which exceeded the board-approved actuarial valuation rate of eight percent.18
(B) For any year in which the system's rate of return is at least eight and one quarter19
percent, R.S. 11:542 provides that a permanent benefit increase shall not exceed the lesser20
of three percent or the increase in the consumer price index, United States city average for21
all urban consumers, as prepared by the United States Department of Labor, Bureau of Labor22
Statistics, for the calendar year immediately preceding the increase.23
(C) The system actuary has determined that the actuarial liability created by24
providing a permanent benefit increase of two and seven tenths of one percent is25
approximately one hundred eighty-nine million dollars. The system actuary computed the26
balance in the experience account to be over one hundred ninety-five million dollars, an27
amount sufficient to fund a benefit increase up to two and seven tenths of one percent on an28
actuarial basis.29 HLS 14RS-722 ORIGINAL
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Section 5. The legislative auditor has confirmed that the legislative auditor's actuary1
is in the process of determining whether he agrees with the determinations of the system2
actuary. 3
Section 6. The consumer price index, United States city average for all urban4
consumers, as prepared by the United States Department of Labor, Bureau of Labor5
Statistics, for the 2013 calendar year, released January 16, 2014, was determined to be one6
and one half of one percent, which does not exceed two and seven tenths of one percent.7
Section 7. In accordance with laws providing for the system's experience account8
and the findings in this Act, the Legislature of Louisiana hereby grants a permanent benefit9
increase of one and one half of one percent, effective July 1, 2014, to all eligible retirees and10
beneficiaries of the Louisiana State Employees' Retirement System. No further action on11
the part of the legislature shall be required to implement such increase.12
Section 8. This Act shall become effective on June 30, 2014; if vetoed by the13
governor and subsequently approved by the legislature, this Act shall become effective on14
June 30, 2014, or on the day following such approval by the legislature, whichever is later.15
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)]
Katrina Jackson HB No. 85
Abstract: Provides a permanent benefit increase of 1.5%, funded by the La. State
Employees' Retirement System (LASERS) experience account, to eligible retirees
and beneficiaries of LASERS.
Present law provides that the board of trustees of LASERS 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 LASERS 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%. HLS 14RS-722 ORIGINAL
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Proposed law grants a permanent benefit increase of 1.5% to all qualified retirees and
beneficiaries of LASERS.
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.