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 62 Original 2016 Regular Session Ivey
Abstract: For state retirement systems meeting certain funded ratio criteria, sets a minimum
employer contribution rate of 20% and provides for use of funds from such additional
contributions.
Proposed law provides that the minimum employer contribution for a state retirement system is 20%
if the system is not and has never been 100% funded or if the system has been 100% funded but the
funded ratio has fallen below 90%.
Proposed law requires use of excess contributions, those required by proposed law in excess of those
required by present law, as follows:
(1)If the funded ratio of a system is equal to or less than 80%, excess contributions are applied
to the oldest outstanding liabilities of the system, as defined in proposed law.
(2)Otherwise, 50% of excess employer contributions shall be applied as provided in (1) above
and the remainder shall be deposited into the system's funding deposit account.
Proposed law creates a funding deposit account for each state retirement system and provides with
respect to such accounts as follows:
(1)Funds shall earn interest annually at the board-approved actuarial valuation interest rate, and
such interest shall be credited to the account at least once a year.
(2)Authorizes charging the account for the following purposes:
(a)To reduce the unfunded accrued liability.
(b)To pay all or a portion of future net direct employer contributions. Provides for
determining the amount of the reduction.
(3)Prohibits charging the account in excess of outstanding account balance.
(4)For funding purposes, asset value utilized in the calculation of the actuarial value of assets
of a system shall exclude the funding deposit account balance as of the asset determination
date for such calculation. For other purposes, the funds in the account shall be considered
assets of the system. Effective July 1, 2016.
(Adds R.S. 11:102.4)