Provides for optional retirement plan participants to become members of the regular retirement system. (6/30/16) (OR INCREASE APV)
The implications of SB 17 are extensive, particularly in fiscal terms. It is anticipated that there will be increases in employer contributions due to a larger number of participants in the TRSL DB plan, along with higher average employee ages upon entry into the plan. The projected effect on expenditures reveals an increase from the General Fund and local funds beginning in the fiscal year ending 2018. Therefore, there’s a clear financial shift towards ongoing support for the TRSL DB plan, intended to stabilize the retirement benefits for higher education employees opting for this system.
Senate Bill 17, authored by Senator Barrow Peacock, introduces significant changes to retirement options for academic and administrative employees of public institutions of higher education in Louisiana. This bill allows participants in the Optional Retirement Plan (ORP) to make a one-time irrevocable decision to transfer to the Teachers’ Retirement System of Louisiana (TRSL) defined benefit plan (DB plan) effective February 1, 2017. This transfer enables those who were once solely in the ORP to start accruing service credits under the TRSL DB plan, which they could not do under the previous arrangement.
Overall sentiment around SB 17 appears to be cautiously optimistic among supporters who advocate for improved retirement benefits for educators. This sentiment reflects a recognition of the need for better long-term financial security for employees in higher education. However, concerns linger regarding the potential financial burden this bill may place on state funds and the overall sustainability of the TRSL DB plan, particularly amid changing demographics and funding challenges in public retirement systems.
Notable points of contention include concerns about the actuarial impacts, such as the increase in normal costs associated with the higher education DB plan as a result of the anticipated influx of ORP members. Critics may argue this could complicate fiscal planning for the retirement system, given the demand for consistent funding and the need to balance budgets in other areas. Additionally, there is an underlying debate about whether these changes are sufficient to meet the retirement needs of higher education employees in the long term.