HLS 16RS-200 ORIGINAL
2016 Regular Session
HOUSE BILL NO. 50
BY REPRESENTATIVE IVEY
RETIREMENT/STATE SYSTEMS: Establishes a tiered accrual rate for new members of
state retirement systems whose first employment making them eligible for
membership in a state system occurs on or after July 1, 2018
1 AN ACT
2To amend and reenact R.S. 11:444(A)(1)(a), 614(B)(2)(b), 615(A), 768(B)(1), 779.1,
3 1144(B)(2)(a) and (4), and 1345.5 and to enact R.S. 11:444(A)(1)(c), 461(C),
4 471.1(I), 621(D), 1144(B)(5), 1147(D), 1151.1(K), and 1323(J), relative to new
5 members of state retirement systems; to provide with respect to the accrual and
6 calculation of benefits for such members; and to provide for related matters.
7 Notice of intention to introduce this Act has been published
8 as provided by Article X, Section 29(C) of the Constitution
9 of Louisiana.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. R.S. 11:444(A)(1)(a), 614(B)(2)(b), 615(A), 768(B)(1), 779.1,
121144(B)(2)(a) and (4), and 1345.5 are hereby amended and reenacted and R.S.
1311:444(A)(1)(c), 461(C), 471.1(I), 621(D), 1144(B)(5), 1147(D), 1151.1(K), and 1323(J) are
14hereby enacted to read as follows:
15 §444. Computation of retirement benefit
16 A.(1)(a)(i) A member who retires effective on or after July 1, 1973, whose
17 first employment making him eligible for membership in a state retirement system
18 occurred on or before June 30, 2018, shall receive a maximum retirement allowance
19 equal to two and one-half percent of average compensation, as determined under
20 R.S. 11:231, for every year of creditable service, plus three hundred dollars.
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1 (ii) Any Notwithstanding any provision of law to the contrary, any member
2 whose first employment making him eligible for membership in one of the state
3 systems occurred on or after January 1, 2011, shall receive an additional benefit
4 equal to one percent times the number of years of creditable service as a judge in a
5 position specified in R.S. 11:553(1), (3) through (5), (7), and (10) through (15) times
6 his average compensation.
7 * * *
8 (c) A member whose first employment making him eligible for membership
9 in a state system occurred on or after July 1, 2018, shall receive a maximum
10 retirement allowance calculated in accordance with this Subparagraph:
11 (i) The maximum retirement allowance for every year of creditable service
12 less than five years of service shall equal one and one-half percent of average
13 compensation.
14 (ii) The maximum retirement allowance for every year of the fifth through
15 the ninth years of creditable service shall equal one and three-quarters percent of
16 average compensation.
17 (iii) The maximum retirement allowance for every year of the tenth through
18 the fourteenth years of creditable service shall equal two percent of average
19 compensation.
20 (iv) The maximum retirement allowance for every year of the fifteenth
21 through the twenty-fourth years of creditable service shall equal two and one-half
22 percent of average compensation.
23 (v) The maximum retirement allowance for every year of the twenty-fifth
24 through the twenty-ninth years of creditable service shall equal three percent of
25 average compensation.
26 (vi) The maximum retirement allowance for every year of the thirtieth
27 through the thirty-fourth years of creditable service shall equal three and one quarter
28 percent of average compensation.
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1 (vii) The maximum retirement allowance for the thirty-fifth year of
2 creditable service and for each year of creditable service thereafter shall equal four
3 percent of average compensation.
4 * * *
5 §461. Eligibility; certification
6 * * *
7 C. Notwithstanding any provision of law to the contrary, benefits paid
8 pursuant to the provisions of this Section to members whose first employment
9 making them eligible for membership in a state system occurred on or after July 1,
10 2018, shall be calculated using the accrual rate for members whose first employment
11 making them eligible for membership in a state system occurred on June 30, 2018.
12 * * *
13 §471.1. Survivors' benefits; members hired on or after January 1, 2011
14 * * *
15 I. Notwithstanding any provision of law to the contrary, benefits paid
16 pursuant to the provisions of this Section to survivors of a member whose first
17 employment making him eligible for membership in a state system occurred on or
18 after July 1, 2018, shall be calculated using the accrual rate for members whose first
19 employment making them eligible for membership in a state system occurred on
20 June 30, 2018.
21 * * *
22 §614. Eligibility for retirement
23 * * *
24 B.
25 * * *
26 (2)
27 * * *
28 (b) Any member of this plan who elects to retire under the provisions of R.S.
29 11:441(A)(2)(b)(i) shall receive a retirement benefit equal to two and one-half
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1 percent of his average compensation for every year of creditable service calculated
2 pursuant to R.S. 11:441(A)(1).
3 * * *
4 §615. Retirement benefit calculation
5 A.(1) Except as provided in Subsection B of this Section, a member whose
6 first employment making him eligible for membership in a state retirement system
7 occurred on or before June 30, 2018, shall receive a retirement benefit equal to three
8 and one-third percent of average compensation for every year of creditable service
9 in the Hazardous Duty Services Plan, not to exceed one hundred percent of the
10 member's average compensation.
11 (2) Except as provided in Subsection B of this Section, a member whose first
12 employment making him eligible for membership in a state retirement system
13 occurred on or after July 1, 2018, shall receive a retirement benefit calculated in
14 accordance with the provisions of this Paragraph, as follows:
15 (a) The maximum retirement allowance for every year of creditable service
16 less than five years of service shall equal two percent of average compensation.
17 (b) The maximum retirement allowance for every year of the fifth through
18 ninth years of creditable service shall equal two and one-half percent of average
19 compensation.
20 (c) The maximum retirement allowance for every year of the tenth through
21 fourteenth years of creditable service shall equal three and one-quarter percent of
22 average compensation.
23 (d) The maximum retirement allowance for every year of the fifteenth
24 through nineteenth years of creditable service shall equal three and three-quarters
25 percent of average compensation.
26 (e) The maximum retirement allowance for every year of the twentieth
27 through twenty-fourth years of creditable service shall equal four percent of average
28 compensation.
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1 (f) The maximum retirement allowance for the twenty-fifth year of creditable
2 service and for each year of creditable service thereafter shall equal four and one-half
3 percent of average compensation.
4 * * *
5 §621. Survivors' benefits for former or retired members
6 * * *
7 D. Notwithstanding any provision of law to the contrary, benefits paid
8 pursuant to the provisions of this Section to the surviving spouse of a deceased
9 member whose first employment making him eligible for membership in a state
10 system occurred on or after July 1, 2018, shall be calculated using the accrual rate
11 for members whose first employment making them eligible for membership in a state
12 system occurred on June 30, 2018.
13 * * *
14 §768. Retirement allowances
15 * * *
16 B.(1)(a) Upon service retirement, a person who became a member on or after
17 July 1, 1999, shall receive an annual benefit which provides a total allowance equal
18 to two and one-half percent of his average earnable compensation multiplied by the
19 number of years of creditable service.
20 (b) A member whose first employment making him eligible for membership
21 in a state system occurred on or after July 1, 2018, shall receive a maximum
22 retirement allowance calculated in accordance with this Subparagraph:
23 (i) The maximum retirement allowance for every year of creditable service
24 less than five years of service shall equal one and one-half percent of average
25 compensation.
26 (ii) The maximum retirement allowance for every year of the fifth through
27 the ninth years of creditable service shall equal one and three-quarters percent of
28 average compensation.
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1 (iii) The maximum retirement allowance for every year of the tenth through
2 the fourteenth years of creditable service shall equal two percent of average
3 compensation.
4 (iv) The maximum retirement allowance for every year of the fifteenth
5 through the twenty-fourth years of creditable service shall equal two and one-half
6 percent of average compensation.
7 (v) The maximum retirement allowance for every year of the twenty-fifth
8 through the twenty-ninth years of creditable service shall equal three percent of
9 average compensation.
10 (vi) The maximum retirement allowance for every year of the thirtieth
11 through the thirty-fourth years of creditable service shall equal three and one quarter
12 percent of average compensation.
13 (vii) The maximum retirement allowance for the thirty-fifth year of
14 creditable service and for each year of creditable service thereafter shall equal four
15 percent of average compensation.
16 * * *
17 §779.1. Allowance on disability retirement; members hired on or after January 1,
18 2011
19 A. Any member whose first employment making him eligible for
20 membership in one of the state systems occurred began on or after January 1, 2011,
21 shall receive a maximum disability retirement benefit which shall be equivalent to
22 the regular retirement formula without reduction by reason of age. Selection of a
23 retirement option shall be made when application for disability is filed. If the
24 disability retiree dies, the option selected upon disability retirement shall be applied
25 to his disability retirement benefit.
26 B. Notwithstanding any provision of law to the contrary, benefits pursuant
27 to the provisions of this Section for members whose first employment making them
28 eligible for membership in a state system occurred on or after July 1, 2018, shall be
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1 calculated using the accrual rate for members whose first employment making them
2 eligible for membership in a state system occurred on June 30, 2018.
3 * * *
4 §1144. Retirement allowance; regular, minimum, and supplemental
5 * * *
6 B. Minimum allowance.
7 * * *
8 (2)(a) The provisions of this Paragraph shall apply to any member who
9 retires on or after July 1, 2001, but shall not apply to any member to whom
10 Paragraph (4) or (5) of this Subsection is applicable.
11 * * *
12 (4) The provisions of this Paragraph shall apply to any member whose first
13 employment making him eligible for membership in one of the state systems
14 occurred on or after July 1, 2010, and on or before June 30, 2018. The minimum
15 allowance for such members shall be no less than an amount which provides a total
16 allowance equal to two and one-half percent multiplied by the total years of
17 accredited service and multiplied by the average compensation for such person as
18 provided in R.S. 11:1002(6)(c).
19 (5) The provisions of this Paragraph shall apply to any member whose first
20 employment making him eligible for membership in a state system occurred on or
21 after July 1, 2018. The minimum allowance for such a member shall be no less than
22 an amount which provides a total allowance equal to the member's total years of
23 accredited service multiplied by the average compensation for such person as
24 provided in R.S. 11:1002(6)(c) and multiplied by the following applicable percentage
25 or percentages:
26 (i) The maximum retirement allowance for every year of creditable service
27 less than five years of service shall equal one and one-half percent of average
28 compensation.
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1 (ii) The maximum retirement allowance for every year of the fifth through
2 the ninth years of creditable service shall equal one and three-quarters percent of
3 average compensation.
4 (iii) The maximum retirement allowance for every year of the tenth through
5 the fourteenth years of creditable service shall equal two percent of average
6 compensation.
7 (iv) The maximum retirement allowance for every year of the fifteenth
8 through the twenty-fourth years of creditable service shall equal two and one-half
9 percent of average compensation.
10 (v) The maximum retirement allowance for every year of the twenty-fifth
11 through the twenty-ninth years of creditable service shall equal three percent of
12 average compensation.
13 (vi) The maximum retirement allowance for every year of the thirtieth
14 through the thirty-fourth years of creditable service shall equal three and one quarter
15 percent of average compensation.
16 (vii) The maximum retirement allowance for the thirty-fifth year of
17 creditable service and for each year of creditable service thereafter shall equal four
18 percent of average compensation.
19 * * *
20 §1147. Disability retirement
21 * * *
22 D. Notwithstanding any provision of law to the contrary, benefits paid
23 pursuant to the provisions of this Section to a member whose first employment
24 making him eligible for membership in a state system occurred on or after July 1,
25 2018, shall be calculated using the accrual rate for members whose first employment
26 making them eligible for membership in a state system occurred on June 30, 2018.
27 * * *
28 §1151.1. Survivor benefits; members hired on or after July 1, 2010
29 * * *
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1 K. Notwithstanding any provision of law to the contrary, benefits paid
2 pursuant to the provisions of this Section to the survivors of a member whose first
3 employment making them eligible for membership in a state system occurred on or
4 after July 1, 2018, shall be calculated using the accrual rate for members whose first
5 employment making them eligible for membership in a state system occurred on
6 June 30, 2018.
7 * * *
8 §1323. Death of employee not in performance of duty; employees hired on or after
9 January 1, 2011
10 * * *
11 J. Notwithstanding any provision of law to the contrary, benefits paid
12 pursuant to the provisions of this Section to the survivors of a member whose first
13 employment making them eligible for membership in a state system occurred on or
14 after July 1, 2018, shall be calculated using the accrual rate for members whose first
15 employment making them eligible for membership in a state system occurred on
16 June 30, 2018.
17 * * *
18 §1345.5. Retirement benefit
19 A. A member whose first employment making him eligible for membership
20 in a state system occurred on or before June 30, 2018, shall receive a retirement
21 equal to three and one-third percent of average compensation for every year of
22 creditable service in the plan, not to exceed one hundred percent of the member's
23 average compensation.
24 B. A member whose first employment making him eligible for membership
25 in a state system occurred on or after July 1, 2018, shall receive a retirement
26 allowance calculated in accordance with this Subsection:
27 (1) The maximum retirement allowance for every year of creditable service
28 less than five years of service shall equal two percent of average compensation,
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1 (2) The maximum retirement allowance for every year of the fifth through
2 ninth years of creditable service shall equal two and one-half percent of average
3 compensation.
4 (3) The maximum retirement allowance for every year of the tenth through
5 fourteenth years of creditable service shall equal three and one-quarter percent of
6 average compensation.
7 (4) The maximum retirement allowance for every year of the fifteenth
8 through nineteenth years of creditable service shall equal three and three-quarters
9 percent of average compensation.
10 (5) The maximum retirement allowance for every year of the twentieth
11 through twenty-fourth years of creditable service shall equal four percent of average
12 compensation.
13 (6) The maximum retirement allowance for the twenty-fifth year of
14 creditable service and for each year of creditable service thereafter shall equal four
15 and one-half percent of average compensation.
16 Section 2. This Act shall become effective on June 30, 2016; if vetoed by the
17governor and subsequently approved by the legislature, this Act shall become effective on
18June 30, 2016, or on the day following such approval by the legislature, whichever is later.
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 50 Original 2016 Regular Session Ivey
Abstract: Establishes a tiered accrual rate based on years of creditable service for all new
members of state retirement systems whose first employment making them eligible
for membership in a state system occurs on or after July 1, 2018.
Present law establishes the four state retirement systems—the La. State Employees'
Retirement System (LASERS), the Teachers' Retirement System of La. (TRSL), the La.
School Employees' Retirement System (LSERS), and the State Police Retirement System
(STPOL)—and provides for the payment of benefits from each system to qualifying retirees
and beneficiaries. Proposed law retains present law.
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Present law generally requires application of the following formula for the payment of
retirement benefits:
Years of Service x Accrual Rate x Average Compensation
Pursuant to this formula, for each year of service the member accrues a certain percentage
of his average compensation.
Present law further establishes different accrual rates for different plans and systems, as
further explained below. Proposed law establishes a new tiered accrual rate based on length
of service to be used in the calculation of benefits for new members whose first employment
making them eligible for membership in a state system occurred on or after July 1, 2018,
(hereafter referred to as "new members").
Regular Retirement Benefits
TRSL, LSERS, and Rank-and-File LASERS Members
Present law provides that members of TRSL, LSERS, as well as rank-and-file members of
LASERS (including judges) shall have an accrual rate of 2.5% for each year of service.
Proposed law provides that for such new members the accrual rate shall be as follows:
(1)For every year of creditable service less than five years the rate shall equal 1.5% of
average compensation.
(2)For every year of the 5th through the 9th years of creditable service, the rate shall
equal 1.75% of average compensation.
(3)For every year of the 10th through the 14th years of creditable service, the rate shall
equal 2% of average compensation.
(4)For every year of the 15th through the 24th years of creditable service, the rate shall
equal 2.5% of average compensation.
(5)For every year of the 25th through the 29th years of creditable service, the rate shall
equal 3% of average compensation.
(6)For every year of the 30th through the 34th years of creditable service, the rate shall
equal 3.25% percent of average compensation.
(7)For the 35th year of creditable service and for each year of creditable service
thereafter, the rate shall equal 4% of average compensation.
Present law provides that judges shall receive an additional 1% of average compensation for
each year of service as a judge. Proposed law retains present law.
Hazardous Duty Members of LASERS
Present law provides that members of the Hazardous Duty Services Plan within LASERS
shall have an accrual rate of 3.33% if such member retires pursuant to the Hazardous Duty
Services Plan provisions.
Proposed law provides that for new members of the Hazardous Duty Services Plan, the
accrual rate shall be as follows if the member retires pursuant to the Hazardous Duty
Services Plan provisions:
(1)For every year of creditable service less than five years the rate shall equal 2% of
average compensation.
(2)For every year of the 5th through the 9th years of creditable service, the rate shall
equal 2.5% of average compensation.
(3)For every year of the 10th through the 14th years of creditable service, the rate shall
equal 3.25% of average compensation.
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(4)For every year of the 15th through the 19th years of creditable service, the rate shall
equal 3.75% of average compensation.
(5)For every year of the 20th through the 24th years of creditable service, the rate shall
equal 4% of average compensation.
(6)For the 25th year of creditable service and for each year of creditable service
thereafter, the rate shall equal 4.5% of average compensation.
Present law further provides that if a Hazardous Duty Services Plan member elects to retire
under the rank-and-file member provisions, his accrual rate shall be the rank-and-file accrual
rate. Proposed law retains present law.
STPOL
Present law provides that members of STPOL have an accrual rate of 3.33% for each year
of service.
Proposed law provides that for new members, the accrual rate shall be as follows:
(1)For every year of creditable service less than five years the rate shall equal 2% of
average compensation.
(2)For every year of the 5th through the 9th years of creditable service, the rate shall
equal 2.5% of average compensation.
(3)For every year of the 10th through the 14th years of creditable service, the rate shall
equal 3.25% of average compensation.
(4)For every year of the 15th through the 19th years of creditable service, the rate shall
equal 3.75% of average compensation.
(5)For every year of the 20th through the 24th years of creditable service, the rate shall
equal 4% of average compensation.
(6)For the 25th year of creditable service and for each year of creditable service
thereafter, the rate shall equal 4.5% of average compensation.
Death and Disability Benefits
LASERS
Rank-and-File Members and Judges
Present law, for rank-and-file members of LASERS, provides that disability benefits for such
members, if disabled while in active service, shall be calculated using the regular retirement
formula, without reduction for reason of age and without regard to the minimum number of
years required to receive a benefit. Proposed law requires that the accrual rate for
performing such calculation for disability benefits for active new members shall be
calculated using the same flat 2.5% accrual rate as for current members.
Present law for LASERS further provides that disability benefits for deferred vested rank-
and-file members shall be calculated using a flat 2.5% accrual rate. Proposed law retains
present law.
Present law for rank-and-file members of LASERS provides that survivor benefits for
members hired on or after Jan. 1, 2011, shall be calculated using the regular retirement
formula. Proposed law requires that survivor benefits for beneficiaries of new members
shall be calculated using the same flat 2.5% accrual rate as for current members.
Hazardous Duty Members
Present law for members of the Hazardous Duty Services Plan within LASERS provides that
disability benefits are calculated as a percentage of average compensation, therefore not
requiring an accrual rate in the calculation. Proposed law retains present law for all
Hazardous Duty members, regardless of the date of hire.
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Present law for members of the Hazardous Duty Services Plan within LASERS provides that
survivor benefits for beneficiaries of such members who are killed in the line of duty are
based on average compensation, and do not require application of an accrual rate for the
determination of the benefit amount. Proposed law retains present law for all Hazardous
Duty members, regardless of the date of hire.
Present law for members of the Hazardous Duty Services Plan within LASERS provides that
survivor benefits for beneficiaries of such members who are not killed in the line of duty are
based on the regular retirement formula. Proposed law requires that the accrual rate to be
utilized for calculating benefits for such new member beneficiaries is the same flat 3.33%
accrual rate as for current members.
TRSL
Present law for TRSL provides that survivor benefits are calculated using a flat 2.5% accrual
rate. Proposed law retains present law for new member survivor benefits, regardless of the
date of hire.
Present law for TRSL provides that disability benefits for members hired on or after Jan. 1,
2011, are calculated using the regular retirement formula without reduction by reason of age
and without regard to the minimum number of years of service required to receive a regular
retirement benefit. Proposed law requires that disability benefits for new members be
calculated using the same flat 2.5% accrual rate as for current members.
LSERS
Present law for LSERS provides that disability benefits for members hired after July 1, 2010,
to be equivalent to the regular retirement formula without reduction by reason of age and
without regard to the minimum number of years of service required to receive a regular
retirement benefit. Proposed law requires that disability benefits for new members be
calculated using the same flat 2.5% accrual rate as for current members.
Present law for LSERS provides that survivor benefits are calculated as a percentage of the
regular retirement benefits the deceased member would have received, without reduction by
reason of age and without regard to the minimum number of years of service required to
receive a regular retirement benefit. Proposed law requires the survivor benefit calculation
for new members to utilize the same flat 2.5% accrual rate as for current members.
STPOL
Present law for STPOL provides that survivor benefits for beneficiaries of members who are
not killed in the line of duty who were hired on or after Jan. 1, 2011, are calculated as a
percentage of the regular retirement benefit the member would have received had he retired
on the date of his death, regardless of years of service or age. Proposed law requires the
survivor benefits for such new members to be calculated using the same flat 3.33% accrual
rate as for current members.
Present law for STPOL members hired on or after Jan. 1, 2011, provides that survivor
benefits for members who are killed in the line of duty is based on a percentage of the
deceased member's average compensation, and does not require application of an accrual
rate to determine the benefit amount. Proposed law retains present law for all such
members, regardless of the date of hire.
Present law for STPOL members hired on or after Jan. 1, 2011, provides that disability
benefits for members who become disabled in the line of duty are based on a percentage of
average compensation and do not require application of an accrual rate to determine the
benefit amount. Further provides that disability benefits for members who become disabled
for reasons other than service in the line of duty shall have a disability benefit based on
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average salary and does not require application of an accrual rate to determine the benefit
amount. Proposed law retains present law for all such members, regardless of the date of
hire.
Effective June 30, 2016.
(Amends R.S. 11:444(A)(1)(a), 614(B)(2)(b), 615(A), 768(B)(1), 779.1, 1144(B)(2)(a) and
(4), and 1345.5; Adds R.S. 11:444(A)(1)(c), 461(C), 471.1(I), 621(D), 1144(B)(5), 1147(D),
1151.1(K), and 1323(J))
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