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. 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.
(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.
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 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))