HLS 16RS-388 ORIGINAL
2016 Regular Session
HOUSE BILL NO. 33
BY REPRESENTATIVE JONES
RETIREMENT/COLAS: Provides for payment of cost-of-living adjustments (COLAs) to
retirees and beneficiaries of state retirement systems without legislative approval in
certain circumstances
1 AN ACT
2To amend and reenact R.S. 11:542(C)(1)(introductory paragraph) and (G)(1)(introductory
3 paragraph), 883.1(C)(1)(introductory paragraph), (F)(2), and (H)(1)(introductory
4 paragraph), 1145.1(C)(1)(introductory paragraph) and (F)(1)(introductory
5 paragraph), and 1332(C)(1)(introductory paragraph), (F), and (G)(1)(introductory
6 paragraph) and to enact R.S. 11:542(G)(1)(e) and (H), 883.1(H)(1)(e) and (I),
7 1145.1(F)(1)(e) and (G), and 1332(G)(1)(e) and (H), relative to payment of benefit
8 increases to qualifying retirees and beneficiaries of state retirement systems; to
9 repeal requirement that such increases be approved by the legislature; to authorize
10 the boards of trustees to pay such increases sua sponte when certain conditions are
11 met; to provide relative to the amount of such increases; to require reports to the
12 legislature when such increases are granted; and to provide for related matters.
13 Notice of intention to introduce this Act has been published
14 as provided by Article X, Section 29(C) of the Constitution
15 of Louisiana.
16Be it enacted by the Legislature of Louisiana:
17 Section 1. R.S. 11:542(C)(1)(introductory paragraph) and (G)(1)(introductory
18paragraph), 883.1(C)(1)(introductory paragraph), (F)(2), and (H)(1)(introductory paragraph),
191145.1(C)(1)(introductory paragraph) and (F)(1)(introductory paragraph), and
201332(C)(1)(introductory paragraph), (F), and (G)(1)(introductory paragraph) are hereby
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HB NO. 33
1amended and reenacted and R.S. 11:542(G)(1)(e) and (H), 883.1(H)(1)(e) and (I),
21145.1(F)(1)(e) and (G), and 1332(G)(1)(e) and (H) are hereby enacted to read as follows:
3 §542. Experience account
4 * * *
5 C.(1) In accordance with the provisions of this Section, the board of trustees
6 may recommend to the president of the Senate and the speaker of the House of
7 Representatives that the system be permitted to grant a permanent benefit increase
8 to retirees, survivors, and beneficiaries whenever the conditions in this Section are
9 satisfied and the balance in the experience account is sufficient to fund such benefit
10 fully on an actuarial basis, as determined by the system's actuary. If the legislative
11 auditor's actuary disagrees with the determination of the system's actuary, a
12 permanent benefit increase shall not be granted. The board of trustees shall not grant
13 a permanent benefit increase unless such permanent benefit increase has been
14 approved by the legislature. Any such permanent benefit increase granted on or
15 before June 30, 2015, shall be limited to and shall only be payable based on an
16 amount not to exceed seventy thousand dollars of the retiree's annual benefit. Any
17 such permanent benefit increase granted on or after July 1, 2015, shall be limited to
18 and shall only be payable based on an amount not to exceed sixty thousand dollars
19 of the retiree's annual benefit. Effective for years after July 1, 1999, and on or before
20 June 30, 2015, the seventy-thousand dollar limit shall be increased each year in an
21 amount equal to any increase in the consumer price index (U.S. city average for all
22 urban consumers (CPI-U)) for the preceding year, if any. Effective on or after
23 Beginning July 1, 2015, 2028 the sixty-thousand dollar limit shall be increased each
24 year in an amount equal to any the increase, if any, in the consumer price index,
25 (U.S. city average for all urban consumers (CPI-U)) for the twelve-month period
26 ending on the system's valuation date, if any. Any increase granted pursuant to the
27 provisions of this Section shall begin on the July first following legislative board
28 approval, shall be payable annually, and shall be an amount equal to the lesser of:
29 * * *
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HB NO. 33
1 G.(1) Notwithstanding any provision of this Section to the contrary, in a year
2 in which the experience account balance is insufficient to fund the amount required
3 pursuant to Paragraph (C)(1) of this Section, the board may make the
4 recommendation provided in Paragraph (C)(1) of this Section grant a permanent
5 benefit increase in an amount provided for in Paragraph (2) of this Subsection if all
6 of the following conditions are satisfied:
7 * * *
8 (e) The legislative auditor's actuary agrees with the determination of the
9 system's actuary regarding the sufficiency of funds for such an increase.
10 * * *
11 H. Within ten days of authorizing payment of a permanent benefit increase
12 pursuant to this Section, the board of trustees shall submit a report to the House and
13 Senate committees on retirement containing the following information:
14 (1) The percentage increase granted to the qualifying retiree and beneficiary
15 benefits.
16 (2) The cost of the increase.
17 (3) The date the increase was approved by the board.
18 (4) The remaining balance in the system's experience account after payment
19 of such increase.
20 * * *
21 §883.1. Experience account
22 * * *
23 C.(1) In accordance with the provisions of this Section, the board of trustees
24 may recommend to the president of the Senate and the speaker of the House of
25 Representatives that the system be permitted to grant a permanent benefit increase
26 to retirees and beneficiaries whenever the conditions in this Section are satisfied and
27 the balance in the experience account is sufficient to fund such benefit fully on an
28 actuarial basis, as determined by the system's actuary. If the legislative auditor's
29 actuary disagrees with the determination of the system's actuary, a permanent benefit
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HB NO. 33
1 increase shall not be granted. The board of trustees shall not grant a permanent
2 benefit increase unless such permanent benefit increase has been approved by the
3 legislature. Any increase granted pursuant to the provisions of this Section shall
4 begin on the July first following legislative board approval, shall be payable
5 annually, and shall be an amount equal to the lesser of:
6 * * *
7 F.
8 * * *
9 (2) Notwithstanding any other provisions of this Section to the contrary, any
10 permanent benefit increase granted on or after July 1, 2015, shall be calculated only
11 on the first sixty thousand dollars of the retiree's annual retirement benefit.
12 Beginning July 1, 2028, this This sixty-thousand dollar limit shall be increased each
13 year in an amount equal to any the increase, if any, in the consumer price index, U.S.
14 city average for all urban consumers (CPI-U) for the immediately preceding one-year
15 period ending in June, if any.
16 * * *
17 H.(1) Notwithstanding any provision of this Section to the contrary, in a year
18 in which the experience account balance is insufficient to fund the amount required
19 pursuant to Paragraph (C)(1) of this Section, the board may make the
20 recommendation provided in Paragraph (C)(1) of this Section grant a permanent
21 benefit increase in an amount provided for in Paragraph (2) of this Subsection if all
22 of the following conditions are satisfied:
23 * * *
24 (e) The legislative auditor's actuary agrees with the determination of the
25 system's actuary regarding the sufficiency of funds for such an increase.
26 * * *
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1 I. Within ten days of authorizing payment of a permanent benefit increase
2 pursuant to this Section, the board of trustees shall submit a report to the House and
3 Senate committees on retirement containing the following information:
4 (1) The percentage increase granted to the qualifying retiree and beneficiary
5 benefits.
6 (2) The cost of the increase.
7 (3) The date the increase was approved by the board.
8 (4) The remaining balance in the system's experience account after payment
9 of such increase.
10 * * *
11 §1145.1. Employee Experience Account
12 * * *
13 C.(1) In accordance with the provisions of this Section, the board of trustees
14 may recommend to the president of the Senate and the speaker of the House of
15 Representatives that the system be permitted to grant a cost-of-living adjustment to
16 retirees and beneficiaries whenever the conditions in this Section are satisfied and
17 the balance in the Employee Experience Account is sufficient to fully fund such
18 benefit on an actuarial basis, as determined by the system's actuary. If the legislative
19 actuary disagrees with the determination of the system's actuary, a cost-of-living
20 adjustment shall not be granted. The board of trustees shall not grant a cost-of-living
21 adjustment unless such cost-of-living adjustment has been approved by the
22 legislature. Any such cost-of-living adjustment granted on or before June 30, 2015,
23 shall be limited to and shall only be payable based on an amount not to exceed
24 eighty-five thousand dollars of the retiree's annual benefit. Any such cost-of-living
25 adjustment granted on or after July 1, 2015, shall be limited to and shall only be
26 payable based on an amount not to exceed sixty thousand dollars of the retiree's
27 annual benefit. Effective for years after July 1, 2007, and on or before June 30,
28 2015, the eighty-five thousand dollar limit shall be increased each year in an amount
29 equal to the increase in the Consumer Price Index (United States city average for all
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1 urban consumers (CPI-U)), as prepared by the United States Department of Labor,
2 Bureau of Labor Statistics, for the preceding calendar year, if any. Effective on or
3 after Beginning July 1, 2015, 2028 the sixty-thousand dollar limit shall be increased
4 each year in an amount equal to any the increase, if any, in the consumer price index
5 (U.S. city average for all urban consumers (CPI-U)) for the twelve-month period
6 ending on the system's valuation date, if any. Any cost-of-living adjustment granted
7 pursuant to the provisions of this Section shall begin on July first following
8 legislative board approval, shall be payable annually, and shall be an amount equal
9 to the lesser of:
10 * * *
11 F.(1) Notwithstanding any provision of this Section to the contrary, in a year
12 in which the experience account balance is insufficient to fund the amount required
13 pursuant to Paragraph (C)(1) of this Section, the board may make the
14 recommendation provided in Paragraph (C)(1) of this Section grant a permanent
15 benefit increase in an amount provided for in Paragraph (2) of this Subsection if all
16 of the following conditions are satisfied:
17 * * *
18 (e) The legislative auditor's actuary agrees with the determination of the
19 system's actuary regarding the sufficiency of funds for such an increase.
20 * * *
21 G. Within ten days of authorizing payment of a cost-of-living adjustment
22 pursuant to this Section, the board of trustees shall submit a report to the House and
23 Senate committees on retirement containing the following information:
24 (1) The percentage increase granted to the qualifying retiree and beneficiary
25 benefits.
26 (2) The cost of the increase.
27 (3) The date the increase was approved by the board.
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1 (4) The remaining balance in the system's experience account after payment
2 of such increase.
3 * * *
4 §1332. Employee Experience Account
5 * * *
6 C.(1) In accordance with the provisions of this Section, the board of trustees
7 may recommend to the president of the Senate and the speaker of the House of
8 Representatives that the system be permitted to grant a cost-of-living adjustment to
9 retirees and beneficiaries whenever the conditions in this Section are satisfied and
10 the balance in the Employee Experience Account is sufficient to fully fund such
11 benefit on an actuarial basis, as determined by the system's actuary. If the legislative
12 actuary disagrees with the determination of the system's actuary, a cost-of-living
13 adjustment shall not be granted. The board of trustees shall not grant a cost-of-living
14 adjustment unless such cost-of-living adjustment has been approved by the
15 legislature. Any such cost-of-living adjustment granted on or before June 30, 2015,
16 shall be limited to and shall only be payable based on an amount not to exceed
17 eighty-five thousand dollars of the retiree's annual benefit. Any such cost-of-living
18 adjustment granted on or after July 1, 2015, shall be limited to and shall only be
19 payable based on an amount not to exceed sixty thousand dollars of the retiree's
20 annual benefit. Effective for years after July 1, 2007, and on or before June 30,
21 2015, the eighty-five thousand dollar limit shall be increased each year in an amount
22 equal to the increase in the consumer price index (United States city average for all
23 urban consumers (CPI-U)), as prepared by the United States Department of Labor,
24 Bureau of Labor Statistics, for the preceding calendar year, if any. Effective on or
25 after Beginning July 1, 2015, 2028, the sixty-thousand dollar limit shall be increased
26 each year in an amount equal to any the increase, if any, in the consumer price index
27 (U.S. city average for all urban consumers (CPI-U)) for the twelve-month period
28 ending on the system's valuation date, if any. Any adjustment granted pursuant to
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1 the provisions of this Section shall begin on July first following legislative board
2 approval, shall be payable annually, and shall be an amount equal to the lesser of:
3 * * *
4 F. In addition to the cost-of-living adjustment authorized by Subsection C
5 of this Section, the board of trustees may grant a supplemental cost-of-living
6 adjustment to all retirees and beneficiaries who are at least age sixty-five, which
7 shall consist of an amount equal to two percent of the benefit being received on the
8 date of the adjustment. In order to grant such supplemental cost-of-living
9 adjustment, the board of trustees shall recommend to the president of the Senate and
10 the speaker of the House of Representatives that the system be permitted to grant
11 such supplemental cost-of-living adjustment to retirees and beneficiaries whenever
12 the balance in the Employee Experience Account is sufficient to fully fund such
13 benefit on an actuarial basis, as determined by the system's actuary. If the legislative
14 actuary disagrees with the determination of the system's actuary, such supplemental
15 cost-of-living adjustment shall not be granted. The board of trustees shall not grant
16 such supplemental cost-of-living adjustment unless such supplemental cost-of-living
17 adjustment has been approved by the legislature. Any such supplemental
18 cost-of-living adjustment paid on or before June 30, 2015, shall be limited to and
19 shall only be payable based on an amount not to exceed eighty-five thousand dollars
20 of the retiree's annual benefit. Any such supplemental cost-of-living adjustment paid
21 on or after July 1, 2015, shall be limited to and shall only be payable based on an
22 amount not to exceed sixty thousand dollars of the retiree's annual benefit. Effective
23 on and after July 1, 2007, and on or before June 30, 2015, the eighty-five thousand
24 dollar limit shall be increased each year in an amount equal to the increase, if any,
25 in the consumer price index (United States city average for all urban consumers
26 (CPI-U)), as prepared by the United States Department of Labor, Bureau of Labor
27 Statistics, for the preceding calendar year, if any. Effective on and after July 1, 2015,
28 2028, the sixty-thousand dollar limit shall be increased each year in an amount equal
29 to the increase in the consumer price index (United States city average for all urban
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1 consumers (CPI-U)), as prepared by the United States Department of Labor, Bureau
2 of Labor Statistics, for the twelve-month period ending on the system's valuation
3 date, if any. Any cost-of-living adjustment granted pursuant to the provisions of this
4 Subsection shall begin on July first following legislative board approval and shall be
5 payable annually.
6 * * *
7 G.(1) Notwithstanding any provision of this Section to the contrary, in a year
8 in which the experience account balance is insufficient to fund the amount required
9 pursuant to Paragraph (C)(1) of this Section, the board may make the
10 recommendation provided in Paragraph (C)(1) of this Section grant a permanent
11 benefit increase in an amount provided for in Paragraph (2) of this Subsection if all
12 of the following conditions are satisfied:
13 * * *
14 (e) The legislative auditor's actuary agrees with the determination of the
15 system's actuary regarding the sufficiency of funds for such an increase.
16 * * *
17 H. Within ten days after authorizing payment of a cost-of-living adjustment
18 pursuant to this Section, the board of trustees shall submit a report to the House and
19 Senate committees on retirement containing the following information:
20 (1) The percentage increase granted to the qualifying retiree and beneficiary
21 benefits.
22 (2) The cost of the increase.
23 (3) The date the increase was approved by the board.
24 (4) The remaining balance in the system's experience account after payment
25 of such increase.
26 Section 2. This Act shall become effective upon signature by the governor or, if not
27signed by the governor, upon expiration of the time for bills to become law without signature
28by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
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HB NO. 33
1vetoed by the governor and subsequently approved by the legislature, this Act shall become
2effective on the day following such approval.
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 33 Original 2016 Regular Session Jones
Abstract: Repeals requirement that benefit increases for retirees and beneficiaries of state
retirement systems be approved by the legislature and authorizes the boards of
trustees of such systems to pay the increases when requirements in present law are
otherwise met.
Present law provides criteria and prerequisites for the payment of a permanent benefit
increase (also known as a cost-of-living adjustment, hereafter "COLA") to qualifying retirees
and beneficiaries of state retirement systems. Proposed law retains present law.
Present law provides that any COLA paid pursuant to present law will only be payable on
the first $60,000 of the retiree or beneficiary's benefit. Proposed law retains present law.
Present law provides that for COLAs granted on or after July 1, 2015, the present law
$60,000 cap shall be indexed in accordance with the Consumer Price Index for Urban
Consumers (CPI-U). Proposed law holds the cap at $60,000 until July 1, 2028, at which
time the indexing shall commence in accordance with the CPI-U as provided in present law.
Present law requires any proposal to grant a COLA to be approved by the legislature before
the board may pay the increase. Proposed law removes the requirement that the legislature
approve each COLA prior to payment. Authorizes the board of trustees of each system to
pay a COLA when the prerequisites and criteria in present law are met. Further requires the
board to submit a report to the House and Senate committees on retirement within 10 days
after action to grant a COLA pursuant to proposed law. Provides that such report shall
contain:
(1)The cost of the increase.
(2)The percentage by which each qualifying retiree and beneficiary's benefit will be
increased.
(3)The date the increase was approved by the board.
(4)The remaining balance in the account used to fund such increase.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 11:542(C)(1)(intro. para.) and (G)(1)(intro. para.), 883.1(C)(1)(intro. para.),
(F)(2), and (H)(1)(intro. para.), 1145.1(C)(1)(intro. para.) and (F)(1)(intro. para.), and
1332(C)(1)(intro. para.), (F), and (G)(1)(intro. para.); Adds R.S. 11:542(G)(1)(e) and (H),
883.1(H)(1)(e) and (I), 1145.1(F)(1)(e) and (G), and 1332(G)(1)(e) and (H))
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