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)]
HB 32 Engrossed 2016 Regular Session Jones
Abstract: Authorizes payment of a permanent benefit increase (or COLA) up to the present law
maximum for each state retirement system for certain retirees and beneficiaries of such
systems.
Present law, relative to the four state retirement systems—La. State Employees' Retirement System
(LASERS), Teachers' Retirement System of La. (TRSL), La. School Employees' Retirement System
(LSERS), and State Police Retirement System (STPOL)—establishes an "experience account" within
each system for the accumulation of certain system funds. Provides for utilization of these funds for
benefit increases, commonly called "cost-of-living adjustments" (COLAs), for retirees, survivors,
and beneficiaries of the system. Provides that the following classes of retirees and beneficiaries are
eligible for a COLA paid pursuant to present law:
(1)Any retiree who has received a benefit for at least one year and who has attained at least age
60.
(2)Any nonretiree beneficiary who has received a benefit for at least one year (aggregated with
any time the deceased member may have received a benefit) if the deceased member would
have attained age 60.
(3)Any disability retiree or any beneficiary who receives benefits based on the death of a
disability retiree if benefits have been received for at least one year.
Proposed law retains present law.
Present law authorizes payment of a COLA every other year when a system is below 80% funded.
The last COLA paid from the experience accounts was in July of 2014.
Present law further provides that the amount of a COLA paid pursuant to present law is the lesser
of:
(1)An amount determined by the system's funded ratio.
(2)The CPI-U for the preceding year.
Proposed law provides that notwithstanding present law limitations, a COLA is authorized for the
retirees and beneficiaries of each of the four state retirement systems. Requires use of the funds from the system experience accounts to fund such a payment.
Proposed law provides that retirees and beneficiaries who would qualify for a COLA under present
law qualify for receipt of the COLA authorized by proposed law. Proposed law further provides and
clarifies that a disability retiree or a person who receives benefits from the system based on the death
of a disability retiree is eligible if benefits have been paid to the retiree or the beneficiary or both
combined for at least one year.
Proposed law provides that the amount of the COLA shall be an amount supported by the funds in
the system's experience account up to the following maximum amounts:
(1)For LASERS, 1.5% of the benefit amount.
(2)For TRSL, 1.5% of the benefit amount.
(3)For LSERS, 2% of the benefit amount.
(4)For STPOL, 2% of the benefit amount.
Present law for STPOL further authorizes payment of a 2% supplemental COLA to retirees and
beneficiaries who are age 65 or older. Proposed law authorizes payment of such a supplemental
COLA in an amount, up to 2%, that is supported by the funds in the experience account after
payment of the general COLA authorized pursuant to proposed law.
Proposed law provides that the benefit increases shall only be paid on the first $60,000 of a retiree's
or beneficiary's benefit.
Proposed law provides that any cost of the Act not funded by payments made from the system
experience account shall be funded with additional employer contributions in compliance with Art.
X, §29(F) of the Constitution of La.
Effective June 30, 2016.
(Adds R.S. 11:542.2, 883.4, 1145.3, and 1331.2)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Retirement to the original bill:
1. Remove provisions outlining the order of debits and credits of the system experience
accounts.
2. Clarify relative to eligibility of disability retirees for the COLA.