2015 REGULAR SESSION
ACTUARIAL NOTE SB 2
Page 1 of 2
Senate Bill 2 SLS 15RS-91
Enrolled
Author: Senators Daniel Claitor and
Barrow Peacock
Date: June 1, 2015
LLA Note SB 2.03
Organizations Affected:
Louisiana State Police Retirement
System
EN 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 SB 2 provides compliance
with the requirements of R.S. 24:521
Bill Header: STATE POLICE RET FUND. Repeals provisions for payment to certain DROP participants of a retirement benefit
calculated as if the persons had not participated in DROP. (gov sig)
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 SB 2
Page 2 of 2
Bill Information:
Current Law
The Louisiana State Police Retirement System (STPOL) contained a DROP provision prior to the enactment of Act 480 of the
2009 regular session of the legislature. As a result of Act 480, the DROP provision was replaced by a Back-DROP provision.
Two state police officers had entered DROP prior to the effective date of Act 480 and had continued to be employed of the time
of the 2014 session. Section 2 of Act 859 of the 2014 regular session provided a special monthly longevity benefit for these two
officers. The monthly longevity benefit was to be equal to the benefit such a member would have received had he not entered
DROP minus the benefit he is currently entitled to (under DROP) minus the actuarial equivalent of his DROP account. The
actuarial cost associated with this benefit was to be paid from the STPOL Experience Account.
The constitutionality of Act 859 was challenged and the court issued an injunction stopping the implementation of the longevity
benefit provision. Neither officer affected by Act 859 has tried to claim the longevity benefit.
Proposed Law
SB 2 repeals Section 2 of Act 859 of the 2014 Regular Session of the Legislature.
Implications of the Proposed Changes
SB 2 repeals the special monthly longevity benefit and codifies the injunction imposed by the court.
Cost Analysis:
Analysis of Actuarial Costs
Retirement Systems
The actuarial cost associated with Act 859 of the 2014 session as shown in an actuarial note for the legislation was estimated
to be about $300,000. That cost was eliminated when the court issued its injunction prohibiting implementation of the Act.
Therefore, SB 2 does not produce any savings because the savings occurred when the court issued its injunction.
Other Post-Employment Benefits
There are no actuarial costs associated with SB 2 relative to post-employment benefits other than pensions.
Analysis of Fiscal Costs
SB 2 has no effect on fiscal costs.
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 SB 2 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