2015 REGULAR SESSION
ACTUARIAL NOTE HB 47
Page 1 of 2
House Bill 47 HLS 15RS-617
Engrossed with House Retirement
Committee Amendment #2254
Author: Representative Karen G. St.
Germain
Date: May 4, 2015
LLA Note H B 47.02
Organizations Affected:
Firefighters’ Retirement System
EG NO IMPACT APV
This Note has been prepared by the Actuarial Services Department of the Office of
the Legislative Auditor. The attachment of this Note to H B 47 provides
compliance with the requirements of R.S. 24:52 1
Bill Header: PROPERTY/COMMUNITY: Prohibits certain post-divorce earnable compensation in the Firefighters' Retirement
System from being included in a former spouse's portion of community property
Cost Summary:
The estimated actuarial and fiscal impact of the proposed legislative is summarized below. Actuarial costs pertain to changes in the
actuarial present value of future benefit payments. A cost is denoted by “Increase” or a positive number. Savings are denoted by
“Decrease” or a negative number.
Actuarial Cost to Retirement Systems $0
Total Five Year Fiscal Cost
Expenditures $0
Revenues $0
Estimated Actuarial Impact:
The chart below shows the estimated change in the actuarial present value of future benefit payments, if any, attributable to the
proposed legislation. A cost is denoted by “Increase” or a positive number. Savings are denoted by “Decrease” or a negative number.
Present value costs associated with administration or other fiscal concerns are not included in these values.
Change in the
Actuarial Cost to: Actuarial Present Value
All Louisiana Public Retirement Systems $0
Other Post Retirement Benefits $0
Total $0
Estimated Fiscal Impact:
The chart below shows the estimated fiscal impact of the proposed legislation. This represents the effect on cash flows for the
retirement systems and other government entities. Fiscal costs include estimated administrative costs and costs associated with other
fiscal concerns. A fiscal cost is denoted by “Increase” or a positive number. Actuarial or fiscal savings are denoted by “Decrease” or
a negative number.
EXPENDITURES 2015-16 2016-17 2017-18 2018-19 2019-2020 5 Year Total
State General Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Agy Self Generated 0 0 0 0 0 0
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds 0 0 0 0 0 0
Annual Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
REVENUES 2015-16 2016-17 2017-18 2018-19 2019-2020 5 Year Total
State General Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Agy Self Generated 0 0 0 0 0 0
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds 0 0 0 0 0 0
Annual Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
2015 REGULAR SESSION
ACTUARIAL NOTE HB 47
Page 2 of 2
Bill Information:
Current Law
Current law defines “earnable compensation” for the Firefighters’ Retirement System (FRS) as:
1) The full amount of compensation earned by the employee on a regular tour of duty.
2) Supplemental pay paid by the state not including overtime.
A member’s final average compensation used in the benefit formula is based on the average of the highest three years of earnable
compensation.
Proposed Law
Under HB 47 pertains to the division of pension benefits under community property laws. HB 47 specifies that any increase in
earnable compensation, following the termination of the marriage, attributable to a member passing both a written examination
and a working test shall be excluded from the calculation of the former spouse’s share of community property.
Implications of the Proposed Changes
HB 47 reduces the former’s spouse share of community property attributable to benefits payable from FRS.
Cost Analysis:
Analysis of Actuarial Costs
HB 47 does not contain any benefit provisions having an actuarial cost.
Retirement Systems
HB 47 provides guidance on the calculation of a former spouse’s share of community property relating to pension benefits
payable from FRS. It has no effect on the calculation of the pension benefit itself. Therefore, there are no actuarial costs
associated with HB 47.
Other Post-Employment Benefits
There are no actuarial costs associated with HB 47 for post-employment benefits other than pensions.
Analysis of Fiscal Costs
There are no fiscal costs associated with HB 47.
Actuarial Data, Methods and Assumptions
This actuarial note was prepared using actuarial data, methods, and assumptions as disclosed in the most recent actuarial valuation
report adopted by PRSAC.
Actuarial Caveat
There is nothing in H B 47 that will compromise the signing actuary’s ability to present an unbiased statement of actuarial opinion.
Actuarial Credentials:
Paul T. Richmond is the actuary for the Louisiana Legislative Auditor. He is an Enrolled Actuary, a member of the American
Academy of Actuaries, a member of the Society of Actuaries and has met the Qualification Standards of the American Academy
of Actuaries necessary to render the actuarial opinion contained herein.
Dual Referral:
Senate House
13.5.1: Annual Fiscal Cost ≥ $100,000 6.8(F)(1): Annual Fiscal Cost ≥ $100,000
13.5.2: Annual Tax or Fee Change ≥ $500,000 6.8(F)(2): Annual Revenue Reduction ≥ $100,000
6.8(G): Annual Tax or Fee Change ≥ $500,000