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 908 Original 2016 Regular Session Pearson
Abstract: Provides for an annual direct transfer of minimum foundation program (MFP) funds from
the Dept. of Education to the Teachers' Retirement System of La. (TRSL) to pay the portion
of the system's required annual initial unfunded accrued liability (IUAL) payment attributable
to elementary and secondary education employers. Provides for distribution and use pursuant
to present law for all remaining MFP funds.
Present law (R.S. 11:102) establishes the calculation for annual employer contribution rates for
employers in the state retirement systems—of which TRSL is one. Part of the annual contribution
is paid to debt service on the IUAL amount.
Present constitution creates the minimum foundation program, which is designed to provide
minimum education funding for public schools in the state. The MFP monies are used by school
districts to cover education-related expenses, including salaries and retirement costs for the teachers
and school employees in the district.
Proposed law requires the Dept. of Education to pay annually an amount sufficient to cover the
portion of the IUAL payment owed by elementary and secondary employers in TRSL from the MFP
monies before such monies are distributed to school boards.
Proposed law requires that TRSL annually determine what percent of the year's IUAL payment is
attributable to elementary and secondary education employers and to invoice the Dept. of Education
for that amount. Further requires the invoiced amount to be reviewed and approved by the Public
Retirement Systems' Actuarial Committee (PRSAC) when the committee reviews and adopts an
actuarial valuation for TRSL each year.
Under proposed law, the department shall transfer the required amount to the retirement system on
behalf of all employers receiving formula funds. The department shall pay 12 equal monthly
payments to satisfy the obligation created by proposed law.
Proposed law further requires TRSL to calculate the balance of amounts due from contributing
employers as a percentage of payroll. Requires such calculation to be reviewed and approved by
PRSAC when the committee adopts a valuation for TRSL. Provides that participating employers
remain obligated for the remainder of their required payments to TRSL.
Effective upon signature of governor or lapse of time for gubernatorial action. (Adds R.S. 11:102.4)