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Regular Session, 2014
SENATE BILL NO. 21
BY SENATORS GUILLORY, KOSTELKA, GARY SMITH, JOHN SMITH AND
WALSWORTH AND REPRESENTATIVES HENRY BURNS,
BURRELL, GUILLORY, HAZEL, HILL, HOFFMANN, PRICE AND
RICHARD
TEACHERS RETIREMENT. Grants a permanent benefit increase to eligible retirees in
accordance with statutory procedure. (2/3 - CA10s29(F))(6/30/14)
AN ACT1
To grant a permanent benefit increase to retirees and beneficiaries of the Teachers'2
Retirement System of Louisiana in conformity with the statutory provisions3
governing the system's experience account.4
Notice of intention to introduce this Act has been published.5
Be it enacted by the Legislature of Louisiana:6
Section 1. The legislature finds that the experience account of the Teachers'7
Retirement System of Louisiana was created for the purpose of accumulating money8
sufficient to provide actuarial funding of permanent post-retirement benefit increases for9
certain retirees and beneficiaries of the system. The legislature further finds that the10
experience account is credited with a portion of the system's investment gain in excess of11
certain thresholds and with interest on funds in the account; provided, however, that the12
amount in the experience account shall in no event exceed the reserve necessary to grant two13
permanent benefit increases.14
Section 2. The legislature finds that permanent benefit increases funded by the15
experience account monies are payable to regular retirees who have been retired for at least16
one year and who have attained the age of sixty years; to disability retirees who have been17 SB NO. 21
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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 non-retiree2
beneficiaries who have been receiving a benefit for at least one year and whose benefits3
originate from service of deceased members who would have attained age sixty. The4
legislature further finds that any increase payable in 2014 shall be calculated on the first5
ninety-three thousand seven hundred fifty-five dollars of a retirement benefit only.6
Section 3. The legislature finds that, in accordance with the provisions of R.S.7
11:883.1, the board of trustees of the Teachers' Retirement System of Louisiana is expected,8
at its monthly meeting in February, to adopt a resolution recommending to the president of9
the Senate and the speaker of the House of Representatives that the legislature grant a10
permanent benefit increase to the eligible retirees and beneficiaries of the system in11
accordance with the provisions of R.S. 11:883.1 and Article X, Section 29(F) of the12
Constitution of Louisiana.13
Section 4. The legislature finds that the resolution presented to the presiding officers14
of this body is expected to contain a recitation of the statutorily-required conditions and15
specification of the satisfaction of each as follows:16
(A) For the plan year that ended June 30, 2013, the Teachers' Retirement System of17
Louisiana earned an actuarial rate of return of thirteen and forty-one one-hundredths percent,18
which exceeded the board-approved actuarial valuation rate of eight and one-quarter percent.19
(B) For any year in which the system's rate of return is at least eight and one-quarter20
percent, R.S. 11:883.1(C) provides that a permanent benefit increase shall not exceed the21
lesser of three percent or the increase in the consumer price index, U.S. city average for all22
urban consumers, as prepared by the U.S. Department of Labor, Bureau of Labor Statistics,23
for the calendar year immediately preceding the increase.24
(C) The system actuary has determined that the actuarial liability created by25
providing a permanent benefit increase of one and six-tenths of one percent is approximately26
two hundred sixteen million six hundred thousand dollars. The system actuary computed27
the balance in the experience account to be over two hundred nineteen million dollars, an28
amount sufficient to fund a benefit increase up to one and six-tenths of one percent on an29 SB NO. 21
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actuarial basis.1
Section 5. The legislative auditor has confirmed that the legislative auditor's actuary2
is in the process of determining whether he agrees with the determinations of the system3
actuary. 4
Section 6. The consumer price index, U.S. city average for all urban consumers, as5
prepared by the U.S. Department of Labor, Bureau of Labor Statistics, for the 2013 calendar6
year, released January 16, 2014, was determined to be one and one-half of one percent,7
which does not exceed one and six-tenths of one percent.8
Section 7. Contingent upon satisfaction of all necessary conditions contained in R.S.9
11:883.1, the first ninety-three thousand seven hundred fifty-five dollars of the current10
benefit of each retiree and beneficiary of the Teachers' Retirement System of Louisiana who11
meets the eligibility criteria contained in the statute and recited herein shall be increased by12
the applicable 2013 consumer price index of one and one-half of one percent effective July13
1, 2014.14
Section 8. This Act shall become effective on June 30, 2014; if vetoed by the15
governor and subsequently approved by the legislature, this Act shall become effective on16
June 30, 2014, or on the day following such approval by the legislature, whichever is later.17
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Present law, relative to the Teachers' Retirement System of Louisiana (TRSL or Teachers'),
provides for the accumulation of certain system funds in an "experience account". Provides
for utilization of these funds for permanent benefit increases (PBIs), sometimes referred to
as cost-of-living adjustments or COLAs, for retirees, survivors, and beneficiaries of the
system. Provides for determination of eligibility for and the amount of an increase paid with
these funds.
Present law provides for notification of the legislature by the TRSL board of trustees that the
conditions for granting a PBI contained in present law have been met.
Present law requires the legislature to approve any PBI.
Proposed law retains present law and approves a PBI to be paid July 1, 2014, pursuant to the
provisions of present law.
Effective June 30, 2014.