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2016 Regular Session
SENATE BILL NO. 18
BY SENATORS PEACOCK, BOUDREAUX, CORTEZ, LONG AND MILKOVICH
RETIREMENT SYSTEMS. Provides for actuarial determinations and application of funds.
(6/30/16)
1 AN ACT
2 To amend and reenact R.S. 11:102(B)(1), (2), (3)(introductory paragraph), (a), and (d)
3 (introductory paragraph), (i), (ii), (iii), and (iv), (4), and (5)(a) and (b), (C), and (D),
4 102.1(B)(4), (5), and (6) and (C)(2), (4), (5), and (6), 102.2(B)(4) and (5) and (C)(2),
5 (4), (5), and (6), 102.3, 542(A), (B), (C), (E), and (F), 883.1(A), (B), (C), (E), and
6 (F), 927(B)(2)(a)(introductory paragraph) and (i) and (b)(i) and (3)(a), 1145.1(A),
7 (B), (C), (D), and (E), and 1332(A), (B), (C), (D), (E), and (F), to enact R.S. 11:23,
8 102(E) and (F), 102.1(A)(4), (B)(3)(a)(iv), and (D), 102.2(A)(4), (B)(3)(a)(iv), and
9 (D), 102.4, 102.5, 102.6, 542(D) and 883.1(D), and to repeal R.S.
10 11:102(B)(3)(d)(v), (vi), (vii), and (viii), 542(G), 883.1(G) and (H), 1145.1(F), and
11 1332(G), to provide for actuarial determinations and application of retirement system
12 funds without allowing, authorizing, or granting benefit improvements; to provide
13 for the determination of required employer contributions and application of
14 investment earnings to certain debts and accounts; to prioritize excess return
15 allocations; to provide for an effective date; and to provide for related matters.
16 Notice of intention to introduce this Act has been published.
17 Be it enacted by the Legislature of Louisiana:
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1 Section 1. R.S. 11:102(B)(1), (2), (3)(introductory paragraph), (a), and
2 (d)(introductory paragraph), (i), (ii), (iii), and (iv), (4), and (5)(a) and (b), (C), and (D),
3 102.1(B)(4), (5), and (6) and (C)(2), (4), (5), and (6), 102.2(B)(4) and (5) and (C)(2), (4), (5),
4 and (6), 102.3, 542(A), (B), (C), (E), and (F), 883.1(A), (B), (C), (E), and (F),
5 927(B)(2)(a)(introductory paragraph) and (i) and (b)(i) and (3)(a), 1145.1(A), (B), (C), (D),
6 and (E), and 1332(A), (B), (C), (D), (E), and (F) are hereby amended and reenacted and R.S.
7 11:23, 102(E) and (F), 102.1(A)(4), (B)(3)(a)(iv), and (D), 102.2(A)(4), (B)(3)(a)(iv), and
8 (D), 102.4, 102.5, 102.6, and 542(D), 883.1(D) are hereby enacted to read as follows:
9 § 23. Funded percentage; state systems
10 Except as otherwise provided in this Title, "funded percentage" for each
11 state public retirement system shall mean the valuation assets used to determine
12 the actuarially-required contributions pursuant to R.S. 11:102 divided by the
13 accrued liability of the system determined by utilizing the funding method
14 established in R.S. 11:22.
15 * * *
16 §102. Employer contributions; determination; state systems
17 * * *
18 B.(1) Except as provided in Subsection C of this Section for the Louisiana
19 State Employees' Retirement System and Subsection D of this Section for the
20 Teachers' Retirement System of Louisiana and except as provided in R.S. 11:102.1,
21 102.2, 102.3, 102.4, and 102.5 and in Paragraph (5) of this Subsection, for each
22 fiscal year, commencing with Fiscal Year 1989-1990, for each of the public
23 retirement systems referenced in Subsection A of this Section, the legislature shall
24 set the required employer contribution rate for each system or plan equal to the
25 actuarially required actuarially-required employer contribution, as determined
26 under Paragraph (3) of this Subsection pursuant to the provisions of this Section,
27 divided by the total projected payroll of all active members of each particular system
28 or plan for the fiscal year. Each entity funding a portion of a member's salary shall
29 also fund the employer's contribution on that portion of the member's salary at the
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1 employer contribution rate specified in this Subsection Section.
2 (2)(a) At the end of each fiscal year, the difference between the actuarially
3 required actuarially-required employer contribution for the fiscal year, as
4 determined under Paragraph (3) of this Subsection or pursuant to Subsection C of
5 this Section for the Louisiana State Employees' Retirement System or Subsection D
6 pursuant to the provisions of this Section for the Teachers' Retirement System of
7 Louisiana, and the amount of employer contributions actually received for the fiscal
8 year, excluding any amounts received for the extraordinary purchase of additional
9 benefits or service, shall be determined.
10 (b) If the amount of employer contributions received for the fiscal year is less
11 than the actuarially required actuarially-required employer contribution for the
12 fiscal year, due to the failure of the legislature to appropriate funds at the required
13 employer contribution rate, the difference shall be paid by the state treasurer from
14 the state general fund upon warrant from the governing authority of the retirement
15 system.
16 (c) At the end of each fiscal year, the difference between the minimum
17 employer contribution, as required by the Constitution of Louisiana, and the
18 actuarially required actuarially-required employer contribution for the fiscal year,
19 as determined under Paragraph (3) of this Subsection or pursuant to Subsection C of
20 this Section for the Louisiana State Employees' Retirement System or Subsection D
21 pursuant to the provisions of this Section for the Teachers' Retirement System of
22 Louisiana, shall be determined and applied in accordance with the following
23 provisions:
24 (i) The amount, if any, by which the actuarially required
25 actuarially-required contribution for a system exceeds the constitutionally required
26 constitutionally-required minimum contribution for that system shall be
27 accumulated in an employer credit account which shall be adjusted annually to
28 reflect any gain or loss attributable to the balance in the account at the actuarial rate
29 of return earned by the system.
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1 (ii) Except as provided in Paragraph (5) of this Subsection, annual
2 contributions required in accordance with this Subsection Section, or the
3 constitutional minimum if greater, may be funded in whole or in part from the
4 employer credit account, provided the employee contribution rate or rates for the
5 system as set forth in R.S. 11:62 has or have been reduced to an amount equal to or
6 less than fifty percent of the annual normal cost for the system or the plan as
7 provided in Subsection C or D of this Section, rounded to the nearest one-quarter
8 percent.
9 (iii) For purposes of implementing Act No. 1331 of the 1999 Regular Session
10 of the Legislature, the balance of the Employer Credit Account applicable to the
11 Louisiana School Employees' Retirement System as of June 30, 1999, shall be fifty-
12 six million seven hundred fifty-four thousand four hundred five dollars.
13 (d) Except as provided in R.S. 11:102.1 and 102.2, differences occurring for
14 any other reason shall be added to or subtracted from the following fiscal year's
15 actuarially required actuarially-required employer contribution in accordance with
16 Subparagraph (3)(c) of this Subsection or with Subsection C of this Section for the
17 Louisiana State Employees' Retirement System or Subsection D the provisions of
18 this Section for the Teachers' Retirement System of Louisiana.
19 (3) With respect to each state public retirement system, the actuarially
20 required actuarially-required employer contribution for each fiscal year,
21 commencing with Fiscal Year 1989-1990, shall be that dollar amount equal to the
22 sum of:
23 (a) The employer's normal cost for that fiscal year, computed as of the first
24 of the fiscal year using the system's actuarial funding method as specified in R.S.
25 11:22 and taking into account the value of future accumulated employee
26 contributions and interest thereon, such employer's normal cost rate multiplied by the
27 total projected payroll for all active members to the middle of that fiscal year. For
28 the Louisiana State Employees' Retirement System, effective for the June 30, 2010,
29 2010 system valuation and beginning with Fiscal Year 2011-2012, the normal cost
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1 shall be determined in accordance with Subsection C of this Section. For the
2 Teachers' Retirement System of Louisiana, effective for the June 30, 2011, 2011
3 system valuation and beginning with Fiscal Year 2012-2013, the normal cost shall
4 be determined in accordance with Subsection D of this Section.
5 * * *
6 (d) That fiscal year's payment, computed as of the first of that fiscal year and
7 projected to the middle of that fiscal year at the actuarially assumed
8 actuarially-assumed interest rate, necessary to amortize changes in actuarial
9 liability due to:
10 (i) Except as provided in Items (v), (vi), (vii), and (viii) of this Subparagraph,
11 actuarial Actuarial gains and losses, if appropriate for the funding method used by
12 the system as specified in R.S. 11:22, for each fiscal year beginning after June 30,
13 1988, such payments to be computed as an amount forming an annuity increasing at
14 four and one-half percent annually over the later of a period of fifteen years from the
15 year of occurrence or by the year 2029, such gains and losses to include any
16 increases in actuarial liability due to governing authority granted cost-of-living
17 increases provided in Subsection C, D, E, or F of this Section.
18 (ii) Except as provided in Items (v), (vi), (vii), and (viii) of this
19 Subparagraph, changes Changes in the method of valuing of assets, such payments
20 to be computed as an amount forming an annuity increasing at four and one-half
21 percent annually over the later of a period of fifteen years from the year of
22 occurrence of the change or by the year 2029 provided in Subsection C, D, E, or
23 F of this Section.
24 (iii) Except as provided in Items (v), (vi), (vii), and (viii) of this
25 Subparagraph, changes Changes in actuarial assumptions or actuarial funding
26 methods, excluding changes in methods of valuing of assets, such payments to be
27 computed as an amount forming an annuity increasing at four and one-half percent
28 annually over the later of a period of thirty years from the year of occurrence of the
29 change or by the year 2029 provided in Subsection C, D, E, or F of this Section.
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1 (iv) Except as provided in Items (v), (vi), (vii), and (viii) of this
2 Subparagraph, changes Changes in actuarial accrued liability, computed using the
3 actuarial funding method as specified in R.S. 11:22, due to legislation changing plan
4 provisions, such payments to be computed in the manner and over the time period
5 specified in the legislation creating the change or, if not specified in such legislation,
6 as an amount forming an annuity increasing at four and one-half percent annually
7 over the later of a period of fifteen years from the year of occurrence of the change
8 or by the year 2029 provided in Subsection C, D, E, or F of this Section.
9 (4) At the end of the fiscal year during which the assets of a system,
10 excluding the outstanding balance due to Subparagraph (B)(3)(c) of this Section,
11 exceed the actuarial accrued liability of that system, the amortization schedules
12 contained in calculated pursuant to Subparagraphs (B)(3)(b) and (d) or in and
13 Subsection C, D, E, or F of this Section for the Louisiana State Employees'
14 Retirement System or Subsection D of this Section for the Teachers' Retirement
15 System of Louisiana shall be fully liquidated and assets in excess of the actuarial
16 accrued liability shall be amortized as a credit in accordance with the provisions of
17 Subparagraph (B)(3)(d) and Subsection C, D, E, or F of this Section.
18 (5)(a) Notwithstanding the provisions any other provision of this Section to
19 the contrary, the gross employer contribution rate for the Louisiana State
20 Employees' Retirement System and the Teachers' Retirement System of Louisiana
21 shall not be less than fifteen and one-half percent per year until such time as the
22 unfunded accrued liability that existed on June 30, 2004, is fully funded.
23 (b) At the end of each fiscal year, the difference, if any, by which the amount
24 of contributions received from payment of all employer contributions at the fixed
25 minimum employer contribution rate established pursuant to this Paragraph exceeds
26 the greater of the minimum employer contribution required by Article X, Section 29
27 of the Constitution of Louisiana or the statutory minimum employer contribution
28 calculated according to the methodology provided for in Items (3)(d)(i) through (iv)
29 Subparagraph (3)(d) of this Subsection or in Paragraph (C)(4) Subsection C or D
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1 of this Section for the Louisiana State Employees' Retirement System or Paragraph
2 (D)(4) of this Section for the Teachers' Retirement System of Louisiana shall be
3 accumulated in an employer credit account for the respective system.
4 * * *
5 C.(1) This The provisions of this Subsection shall apply to the Louisiana
6 State Employees' Retirement System.
7 (2)(a) Except as provided in Subparagraph (b) of this Paragraph and in
8 R.S. 11:102.5, effective July 1, 2004, and beginning with Fiscal Year 1998-1999,
9 the amortization period for the changes, gains, or losses of the system provided
10 in Items (B)(3)(d)(i) through (iv) of this Section shall be thirty years from the
11 year in which the change, gain, or loss occurred. The outstanding balances of
12 amortization bases established pursuant to Items (B)(3)(d)(i) through (iv) of this
13 Section before Fiscal Year 1998-1999, shall be amortized as a level dollar
14 amount from July 1, 2004, through June 30, 2029. Beginning with Fiscal Year
15 2003-2004, and for each fiscal year thereafter, the outstanding balances of
16 amortization bases established pursuant to Items (B)(3)(d)(i) through (iv) of this
17 Section shall be amortized as a level dollar amount. Effective for the June 30,
18 2010 system valuation and beginning with Fiscal Year 2011-2012, amortization
19 payments for changes in actuarial liability shall be determined in accordance
20 with this Subsection.
21 (b) Notwithstanding the provisions of Subparagraph (a) of this
22 Paragraph, effective for the June thirtieth valuation following the fiscal year in
23 which the system first attains a funded percentage of seventy or more pursuant
24 to R.S. 11:542 and for every year thereafter, the amortization period for the
25 changes, gains, or losses of the system provided in Items (B)(3)(d)(i) through (iv)
26 of this Section occurring in that year or thereafter shall be twenty years from
27 the year in which the change, gain, or loss occurred.
28 (c) Effective for the first system valuation following June 30, 2015, in
29 which an allocation is made to the system's experience account and for each
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1 valuation thereafter, actuarial gains allocated to the experience account shall
2 be amortized as a loss with level payments over a ten-year period.
3 (3) The provisions of this Paragraph and Paragraphs (4) through (9) of
4 this Subsection shall be applicable to the Louisiana State Employees' Retirement
5 System effective for the June 30, 2010, 2010 system valuation and beginning Fiscal
6 Year 2011-2012. For purposes of this Subsection, "plan" or "plans" shall mean a
7 subgroup within the system characterized by the following employee classifications:
8 (a) Rank-and-file members of the system.
9 (b) Full-time law enforcement personnel, supervisors, or administrators who
10 are employed with the Department of Revenue or office of alcohol and tobacco
11 control and who are P.O.S.T. certified, have the power to arrest, and hold a
12 commission from such office.
13 (c) Peace officers, as defined by R.S. 40:2402(3)(a), employed by the
14 Department of Public Safety and Corrections, office of state police, other than state
15 troopers.
16 (d) Judges and court officers to whom Subpart A of Part VII of Chapter 1 of
17 Subtitle II of this Title is applicable.
18 (e) Wildlife agents to whom Subpart B of Part VII of Chapter 1 of Subtitle
19 II of this Title is applicable.
20 (f) Wardens, correctional officers, probation and parole officers, and security
21 personnel employed by the Department of Public Safety and Corrections who are
22 members of the secondary component pursuant to Subpart C of Part VII of Chapter
23 1 of Subtitle II of this Title.
24 (g) Correctional officers, probation and parole officers, and security
25 personnel employed by the Department of Public Safety and Corrections who are
26 members of the primary component.
27 (h) Legislators, the governor, and the lieutenant governor.
28 (i) Employees of the bridge police section of the Crescent City Connection
29 Division of the Department of Transportation and Development.
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1 (j) Hazardous duty plan members as provided pursuant to R.S. 11:611 et seq.
2 (k) Judges as provided pursuant to R.S. 11:62(5)(a)(iii) and 444(A)(1)(a)(ii).
3 (l) Harbor Police Retirement Plan members as provided pursuant to R.S.
4 11:631.
5 (m) Any other specialty retirement plan provided for a subgroup of system
6 members. If the legislation enacting such a plan is silent as to the application of this
7 Subsection, the Public Retirement Systems' Actuarial Committee shall provide for
8 the application to such plan.
9 (2)(4) For the Louisiana State Employees' Retirement System, effective
10 Effective for the June 30, 2010, 2010 system valuation and beginning with Fiscal
11 Year 2011-2012, the normal cost calculated pursuant to Subparagraph (B)(3)(a) of
12 this Section, shall be calculated separately for each particular plan within the system.
13 An employer shall pay employer contributions for each employee at the rate
14 applicable to the plan of which that employee is a member.
15 (3)(5) For the Louisiana State Employees' Retirement System, effective
16 Effective for the June 30, 2010, 2010 system valuation and beginning with Fiscal
17 Year 2011-2012, changes in actuarial liability due to legislation, changes in
18 governmental organization, or reclassification of employees or positions shall be
19 calculated individually for each particular plan within the system based on each
20 plan's actuarial experience as further provided in Subparagraph (4)(c) (6)(c) of this
21 Subsection.
22 (4)(6) For each plan referenced in Paragraph (1) (3) of this Subsection, the
23 legislature shall set the required employer contribution rate equal to the sum of the
24 following:
25 (a) The particularized normal cost rate. The normal cost rate for each fiscal
26 year shall be the employer's normal cost for the plan computed by applying the
27 method specified in R.S. 11:102(B)(1) and (3)(a) to the plan.
28 (b) The shared unfunded accrued liability rate. (i) Except as provided in Item
29 (ii) of this Subparagraph, a single rate shall be computed for each fiscal year,
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1 applicable to all plans for actuarial changes, gains, and losses existing on June 30,
2 2010, or occurring thereafter, including experience and investment gains and losses,
3 which are independent of the existence of the plans listed in Paragraph (1) (3) of this
4 Subsection, the payment and rate therefor shall be calculated as provided in this
5 Subsection and Paragraphs (B)(1) and (3) of this Section.
6 (ii) The shared unfunded accrued liability rate applicable to the Harbor Police
7 Retirement System shall not include any unfunded accrued liability incurred on or
8 before July 1, 2015, until the earlier of:
9 (aa) July 1, 2022.
10 (bb) The date that all sums payable by the Port of New Orleans to the board
11 of trustees of the Louisiana State Employees' Retirement System pursuant to the
12 terms and conditions of a cooperative endeavor agreement between the board of
13 trustees of the Louisiana State Employees' Retirement System, the board of
14 commissioners of the Port of New Orleans, and the board of trustees of the Harbor
15 Police Retirement System regarding the merger of the Harbor Police Retirement
16 System into the Louisiana State Employees' Retirement System have been paid in
17 full.
18 (c) The particularized unfunded accrued liability rate. For actuarial changes,
19 gains, and losses, excluding experience and investment gains and losses, first
20 recognized in the June 30, 2010, 2010 valuation or in any later valuation, attributable
21 to one or more, but not all, plans listed in Paragraph (1) (3) of this Subsection or to
22 some new plan or plans, created, implemented, or enacted after July 1, 2010, a
23 particularized contribution rate shall be calculated as provided in this Subsection
24 and Paragraphs (B)(1) and (3) of this Section.
25 (d) The shared gross employer contribution rate difference. The gross
26 employer contribution rate difference shall be the difference between the minimum
27 gross employer contribution rate provided in Paragraph (B)(5) of this Section and the
28 aggregate employer contribution rate calculated pursuant to the provisions of
29 Subsection B of this Section.
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1 (5)(7) Each entity funding a portion of the member's salary shall also fund the
2 employer's contribution on that portion of the member's salary at the employer
3 contribution rate specified in this Subsection.
4 (6)(8) For purposes of Paragraph (B)(2) of this Section the actuarially
5 required actuarially-required employer contributions and the employer
6 contributions actually received for all plans shall be totaled and treated as a single
7 contribution.
8 (7)(9) If provisions of this Section cover matters not specifically addressed
9 by the provisions of this Subsection, then those provisions shall be applicable.
10 D.(1) This The provisions of this Subsection shall apply to the Teachers'
11 Retirement System of Louisiana.
12 (2)(a) Except as provided in Subparagraph (b) of this Paragraph and in
13 R.S. 11:102.5, effective July 1, 2004, and beginning with Fiscal Year 2000-2001,
14 the amortization period for the changes, gains, or losses of the system provided
15 in Items (B)(3)(d)(i) through (iv) of this Section shall be thirty years from the
16 year in which the change, gain, or loss occurred. The outstanding balances of
17 amortization bases established pursuant to Items (B)(3)(d)(i) through (iv) of this
18 Section before Fiscal Year 2000-2001, shall be amortized as a level dollar
19 amount from July 1, 2004, through June 30, 2029. Beginning with Fiscal Year
20 2003-2004, and for each fiscal year thereafter, the outstanding balances of
21 amortization bases established pursuant to Items (B)(3)(d)(i) through (iv) of this
22 Section shall be amortized as a level dollar amount. Effective for the June 30,
23 2011 system valuation and beginning with Fiscal Year 2012-2013, amortization
24 payments for changes in actuarial liability shall be determined in accordance
25 with this Subsection.
26 (b) Notwithstanding the provisions of Subparagraph (a) of this
27 Paragraph, effective for the June thirtieth valuation following the fiscal year in
28 which the system first attains a funded percentage of seventy or more pursuant
29 to R.S. 11:883.1 and for every year thereafter, the amortization period for the
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1 changes, gains, or losses of the system provided in Items (B)(3)(d)(i) through (iv)
2 of this Section occurring in that year or thereafter shall be twenty years from
3 the year in which the change, gain, or loss occurred.
4 (c) Effective for the first system valuation following June 30, 2015, in
5 which an allocation is made to the system's experience account and for each
6 valuation thereafter, actuarial gains allocated to the experience account shall
7 be amortized as a loss with level payments over a ten-year period.
8 (3) The provisions of this Paragraph and Paragraphs (4) through (9) of
9 this Subsection shall be applicable to the Teachers' Retirement System of Louisiana
10 effective for the June 30, 2011, 2011 system valuation and beginning Fiscal Year
11 2012-2013. For purposes of this Subsection, "plan" or "plans" shall mean a subgroup
12 within the system characterized by the following employee classifications:
13 (a) School lunch Plan A.
14 (b) School lunch Plan B.
15 (c) Employees of an institution of postsecondary education, the Board of
16 Regents, or a postsecondary education management board who are not employed for
17 the sole purpose of providing instruction or administrative services at the primary or
18 secondary level, including at any lab school and the Louisiana School for Math,
19 Science, and the Arts.
20 (d)(b) Any other specialty retirement plan provided for a subgroup of system
21 members. If the legislation enacting such a plan is silent as to the application of this
22 Subsection, the Public Retirement Systems' Actuarial Committee shall provide for
23 the application to such plan.
24 (e)(c) All other teachers, as defined in R.S. 11:701(33), including members
25 paid from school food service funds as provided in R.S. 11:801 and 811.
26 (2)(4) For the Teachers' Retirement System of Louisiana, effective Effective
27 for the June 30, 2011, 2011 system valuation and beginning with Fiscal Year 2012-
28 2013, the normal cost calculated pursuant to Subparagraph (B)(3)(a) of this Section,
29 shall be calculated separately for each particular plan within the system. An
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1 employer shall pay employer contributions for each employee at the rate applicable
2 to the plan of which that employee is a member.
3 (3)(5) For the Teachers' Retirement System of Louisiana, effective Effective
4 for the June 30, 2011, 2011 system valuation and beginning with Fiscal Year
5 2012-2013, changes in actuarial liability due to legislation, changes in governmental
6 organization, or reclassification of employees or positions shall be calculated
7 individually for each particular plan within the system based on each plan's actuarial
8 experience as further provided in Subparagraph (4)(c) (6)(c) of this Subsection.
9 (4)(6) For each plan referenced in Paragraph (1) (3) of this Subsection, the
10 legislature shall set the required employer contribution rate equal to the sum of the
11 following:
12 (a) The particularized normal cost rate. The normal cost rate for each fiscal
13 year shall be the employer's normal cost for employees in the plan computed by
14 applying the method specified in Paragraph (B)(1) and Subparagraph (B)(3)(a) of
15 this Section to the plan.
16 (b) The shared unfunded accrued liability rate. A single rate shall be
17 computed for each fiscal year, applicable to all plans for actuarial changes, gains, and
18 losses existing on June 30, 2011, or occurring thereafter, including experience and
19 investment gains and losses, which are independent of the existence of the plans
20 listed in Paragraph (1) (3) of this Subsection, the payment and rate therefor shall be
21 calculated as provided in this Subsection and Paragraphs (B)(1) and (3) of this
22 Section.
23 (c) The particularized unfunded accrued liability rate. For actuarial changes,
24 gains, and losses, excluding experience and investment gains and losses, first
25 recognized in the June 30, 2011, 2011 valuation or in any later valuation, attributable
26 to one or more, but not all, plans listed in Paragraph (1) (3) of this Subsection or to
27 some new plan or plans, created, implemented, or enacted after July 1, 2011, a
28 particularized contribution rate shall be calculated as provided in this Subsection
29 and Paragraphs (B)(1) and (3) of this Section.
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1 (d) The shared gross employer contribution rate difference. The gross
2 employer contribution rate difference shall be the difference between the minimum
3 gross employer contribution rate provided in Paragraph (B)(5) of this Section and the
4 aggregate employer contribution rate calculated pursuant to the provisions of
5 Subsection B of this Section.
6 (5)(7) Each entity funding a portion of the member's salary shall also fund the
7 employer's contribution on that portion of the member's salary at the employer
8 contribution rate specified in this Subsection.
9 (6)(8) For purposes of Paragraph (B)(2) of this Section the actuarially
10 required actuarially-required employer contributions and the employer
11 contributions actually received for all plans shall be totaled and treated as a single
12 contribution.
13 (7)(9) If provisions of this Section cover matters not specifically addressed
14 by the provisions of this Subsection, then those provisions shall be applicable.
15 E.(1) Except as provided in Paragraphs (2) and (3) of this Subsection and
16 in R.S. 11:102.5, effective July 1, 2004, and beginning with Fiscal Year
17 2000-2001, the amortization period for the changes, gains, or losses of the
18 Louisiana School Employees' Retirement System provided in Items (B)(3)(d)(i)
19 through (iv) of this Section shall be thirty years from the year in which the
20 change, gain, or loss occurred. The outstanding balances of amortization bases
21 established pursuant to Items (B)(3)(d)(i) through (iv) of this Section before
22 Fiscal Year 2000-2001, shall be amortized as a level dollar amount from July 1,
23 2004, through June 30, 2029. Beginning with Fiscal Year 2003-2004, and for
24 each fiscal year thereafter, the outstanding balances of amortization bases
25 established pursuant to Items (B)(3)(d)(i) through (iv) of this Section shall be
26 amortized as a level dollar amount.
27 (2)(a) All outstanding amortization bases in existence on June 30, 2014,
28 including outstanding balances established pursuant to Subparagraph (B)(3)(c)
29 of this Section, shall be consolidated and reamortized over the period ending
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1 June 30, 2044, with level dollar payments, effective with the June 30, 2014
2 valuation. This Paragraph shall not apply to amortization bases established
3 after June 30, 2014.
4 (b) After payment of a permanent benefit increase pursuant to the
5 provisions of R.S. 11:1145.1, the unused portion of the June 30, 2013 experience
6 account balance shall be credited in an amortization conversion account from
7 which annual contributions required pursuant to Subparagraph (a) of this
8 Paragraph shall be funded in whole or in part for the years July 1, 2014,
9 through June 30, 2019. Effective June 30, 2019, all funds remaining in the
10 amortization conversion account shall be amortized as a gain in accordance
11 with the provisions of this Subsection.
12 (3) Notwithstanding the provisions of Paragraph (1) of this Subsection,
13 effective for the June thirtieth valuation following the fiscal year in which the
14 system first attains a funded percentage of seventy-two or more pursuant to
15 R.S. 11:1145.1 and for every year thereafter, the amortization period for the
16 changes, gains, or losses of the system provided in Items (B)(3)(d)(i) through (iv)
17 of this Section occurring in that year or thereafter shall be twenty years from
18 the year in which the change, gain, or loss occurred.
19 (4) Effective for the first system valuation following June 30, 2015, in
20 which an allocation is made to the system's experience account and for each
21 valuation thereafter, actuarial gains allocated to the experience account shall
22 be amortized as a loss with level payments over a ten-year period.
23 F.(1) Except as provided in Paragraph (2) of this Subsection and in R.S.
24 11:102.5, effective July 1, 2009, and beginning with Fiscal Year 1992-1993, the
25 amortization period for the changes, gains, or losses of the Louisiana State
26 Police Retirement System provided in Items (B)(3)(d)(i) through (iv) of this
27 Section shall be thirty years from the year in which the change, gain, or loss
28 occurred. The outstanding balances of amortization bases established pursuant
29 to Items (B)(3)(d)(i) through (iv) of this Section before Fiscal Year 2008-2009
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1 shall be amortized as a level dollar amount from July 1, 2009, through June 30,
2 2029. Beginning with Fiscal Year 2008-2009, and for each fiscal year thereafter,
3 the outstanding balances of amortization bases established pursuant to Items
4 (B)(3)(d)(i) through (iv) of this Section shall be amortized as a level dollar
5 amount.
6 (2) Notwithstanding the provisions of Paragraph (1) of this Subsection,
7 effective for the June thirtieth valuation following the fiscal year in which the
8 system first attains a funded percentage of seventy or more pursuant to R.S.
9 11:1332 and for every year thereafter, the amortization period for the changes,
10 gains, or losses of the system provided in Items (B)(3)(d)(i) through (iv) of this
11 Section occurring in that year or thereafter shall be twenty years from the year
12 in which the change, gain, or loss occurred.
13 (3) Effective for the first system valuation following June 30, 2015, in
14 which an allocation is made to the system's experience account and for each
15 valuation thereafter, actuarial gains allocated to the experience account shall
16 be amortized as a loss with level payments over a ten-year period.
17 §102.1. Consolidation of amortization Amortization payment schedules; priority
18 excess return allocations; Louisiana State Employees' Retirement
19 System
20 A. * * *
21 (4) For purposes of this Section, the following shall apply:
22 (a) "Primary priority amount" shall mean the maximum amount of
23 system returns in excess of the system's actuarially-assumed rate of return that
24 may be applied to the original amortization base, regardless of whether actual
25 returns that equal or exceed the maximum are available, and shall equal:
26 (i) For the June 30, 2015 valuation, fifty million dollars.
27 (ii) For each valuation thereafter, the prior year's primary priority
28 amount increased by the percentage increase in the system's actuarial value of
29 assets for the prior year, if any.
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1 (b) "Primary allocation" shall mean the actual returns available for
2 application to the original amortization base.
3 (c) "Secondary priority amount" shall mean the maximum amount of
4 system returns in excess of the system's actuarially-assumed rate of return that
5 may be applied to the experience account amortization base, regardless of
6 whether actual returns that equal or exceed the maximum are available, and
7 shall equal:
8 (i) For the June 30, 2015 valuation, fifty million dollars.
9 (ii) For each valuation thereafter, before the original amortization base
10 is liquidated, the prior year's secondary priority amount increased by the
11 percentage increase in the system's actuarial value of assets for the prior year,
12 if any.
13 (iii) For the valuation in which the original amortization base is
14 liquidated, that year's secondary priority amount calculated pursuant to Item
15 (ii) of this Subparagraph plus any money from that year's primary priority
16 amount remaining after liquidation of the original amortization base.
17 (iv) For the first valuation after the original amortization base is
18 liquidated, the portion of the prior year's primary priority amount that was
19 necessary to liquidate the original amortization base plus the prior year's
20 secondary priority amount, both increased by the percentage increase in the
21 system's actuarial value of assets for the prior year, if any.
22 (v) For the second valuation after the original amortization base is
23 liquidated and for each valuation thereafter, the prior year's secondary priority
24 amount increased by the percentage increase in the system's actuarial value of
25 assets for the prior year, if any.
26 (d) "Secondary allocation" shall mean the actual returns available for
27 application to the experience account amortization base.
28 (e) "Residual priority amount" shall mean the maximum amount of
29 system returns in excess of the system's actuarially-assumed rate of return that
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1 may be applied to the oldest outstanding positive amortization base after
2 liquidation of the experience account amortization base, regardless of whether
3 actual returns that equal or exceed the maximum are available, and shall equal:
4 (i) For the valuation in which the experience account amortization base
5 is liquidated, the money from that year's secondary allocation remaining after
6 liquidation of the experience account amortization base, if any.
7 (ii) For the first valuation after the experience account amortization base
8 is liquidated, the prior year's secondary priority amount, increased by the
9 percentage increase in the system's actuarial value of assets for the prior year,
10 if any.
11 (iii) For the second valuation after the experience account amortization
12 base is liquidated and for each valuation thereafter, the prior year's residual
13 priority amount increased by the percentage increase in the system's actuarial
14 value of assets for the prior year, if any.
15 (f) "Residual allocation" shall mean the actual returns available for
16 application to the oldest outstanding positive amortization base after liquidation
17 of the experience account amortization base.
18 (g) In no event shall the total of one year's priority amounts be less than
19 the total of the previous year's priority amounts.
20 (h) Notwithstanding Subparagraph (i) of this Paragraph, effective for the
21 June thirtieth valuation following the fiscal year in which the system first
22 attains a funded percentage of eighty or more pursuant to R.S. 11:542 and for
23 each valuation thereafter, the net remaining liability of the amortization base
24 to which the funds are applied shall be reamortized with annual level dollar
25 payments calculated as provided in R.S. 11:102 over the remainder of the
26 amortization period originally established for that amortization base.
27 (i) Beginning with the 2019-2020 Fiscal Year and every fifth fiscal year
28 thereafter, the remaining liability net of all payments made since the last
29 reamortization shall be reamortized over the remainder of the amortization
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1 period originally established for that amortization base with annual payments
2 calculated as provided for in this Section.
3 (j) Except as provided in Subparagraphs (h) and (i) of this Paragraph
4 and in Item (B)(3)(a)(iv) and Subparagraph (C)(3)(d) of this Section, the net
5 remaining liability of the amortization base to which the funds are applied shall
6 not be reamortized after such application.
7 B. Original amortization base.
8 * * *
9 (3)(a) This consolidated amortization base shall be known as the "original
10 amortization base" and shall be amortized with annual payments calculated as
11 follows:
12 * * *
13 (iv) Notwithstanding any provision of this Section to the contrary, the net
14 remaining liability shall be reamortized over the remainder of the amortization
15 period ending in 2029 in the first valuation after the 2019-2020 Fiscal Year for
16 which this reamortization results in annual level dollar payments that do not
17 exceed the payment otherwise required for that year's valuation.
18 * * *
19 (4)(a) Except as provided in Paragraph (6) of this Subsection, in any year in
20 which the system exceeds its actuarially-assumed rate of return, the excess returns,
21 up to the first fifty million for the June 30, 2015, valuation, the primary allocation
22 shall be applied to the remaining balance of the original amortization base
23 established in this Subsection. The maximum amount of excess returns to be applied
24 in any subsequent year pursuant to the provisions of this Subparagraph shall equal
25 the prior year's maximum amount increased by the percentage increase in the
26 system's actuarial value of assets for the preceding year, if any.
27 (b) For any payment made pursuant to the provisions of this Paragraph, if the
28 system is eighty-five percent funded or greater prior to the application of the funds,
29 the net remaining liability shall be reamortized over the remaining amortization
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1 period with annual payments calculated as provided in this Subsection or as
2 otherwise provided by law; if the system is less than eighty-five percent funded prior
3 to application of the funds, the net remaining liability shall not be reamortized after
4 such application.
5 (5) Notwithstanding the provisions of R.S. 11:102(B)(3)(c) and (5) or any
6 other provision of law to the contrary, in any year through Fiscal Year 2016-2017 in
7 which the system receives an overpayment of employer contributions as determined
8 pursuant to R.S. 11:102(B)(2) and in any year through Fiscal Year 2016-2017 in
9 which the system receives additional contributions pursuant to R.S. 11:102(B)(5),
10 the amount of such overpayment or additional contribution shall be applied to the
11 remaining balance of the original amortization base established pursuant to this
12 Subsection. For any payment made pursuant to the provisions of this Paragraph, if
13 the system is eighty-five percent funded or greater prior to the application of the
14 funds, the net remaining liability shall be reamortized over the remaining
15 amortization period with annual payments calculated as provided in this Subsection
16 or as otherwise provided by law; if the system is less than eighty-five percent funded
17 prior to application of the funds, the net remaining liability shall not be reamortized
18 after such application.
19 (6) For the June 30, 2014, 2014 valuation, if the system exceeds its
20 actuarially-assumed rate of return, the excess returns, up to the first twenty-five
21 million dollars, shall be applied to the remaining balance of the original amortization
22 base established in this Subsection, without reamortization of such base.
23 C. Experience account amortization base.
24 * * *
25 (2) To this shall be applied the balance in the experience account or the
26 balance in the subaccount of the Texaco Account created pursuant to R.S.
27 11:542(A)(1)(b)(iii).
28 * * *
29 (4)(a) Except as provided in Paragraph (6) of this Subsection, in any year
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1 before the liquidation of the original amortization base in which the excess
2 returns of the system exceed the primary priority amount applied to the Original
3 Amortization Base pursuant to Subparagraph (B)(4)(a) of this Section, the remaining
4 excess returns, up to the next fifty million dollars for the June 30, 2015, valuation,
5 the secondary allocation shall be applied to the experience account amortization
6 base established in this Subsection. The maximum amount of excess returns to be
7 applied in any subsequent year pursuant to the provisions of this Subparagraph shall
8 equal the prior year's maximum amount increased by the percentage increase in the
9 system's actuarial value of assets for the preceding year, if any. In the year in which
10 the original amortization base is liquidated and for each year thereafter until
11 the experience account amortization base is liquidated, the secondary allocation
12 shall be applied to the experience account amortization base.
13 (b) For any payment made pursuant to the provisions of this Paragraph, if the
14 system is eighty-five percent funded or greater prior to the application of the funds,
15 the net remaining liability shall be reamortized over the remaining amortization
16 period with annual payments calculated as provided in this Subsection or as
17 otherwise provided by law; if the system is less than eighty-five percent funded prior
18 to application of the funds, the net remaining liability shall not be reamortized after
19 such application.
20 (5) Notwithstanding the provisions of R.S. 11:102(B)(3)(c) and (5) or any
21 other provision of law to the contrary, in any year from Fiscal Year 2017-2018
22 through Fiscal Year 2039-2040 in which the system receives an overpayment of
23 employer contributions as determined pursuant to R.S. 11:102(B)(2) and in any year
24 from Fiscal Year 2017-2018 through Fiscal Year 2039-2040 in which the system
25 receives additional contributions pursuant to R.S. 11:102(B)(5), the amount of such
26 overpayment or additional contribution shall be applied to the remaining balance of
27 the experience account amortization base established pursuant to this Subsection. For
28 any payment made pursuant to the provisions of this Paragraph, if the system is
29 eighty-five percent funded or greater prior to the application of the funds, the net
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1 remaining liability shall be reamortized over the remaining amortization period with
2 annual payments calculated as provided in this Subsection or as otherwise provided
3 by law; if the system is less than eighty-five percent funded prior to application of
4 the funds, the net remaining liability shall not be reamortized after such application.
5 (6) For the June 30, 2014, 2014 valuation, if the excess returns of the system
6 exceed the amount applied to the original amortization base pursuant to
7 Subparagraph (B)(6) of this Section, the remaining excess returns, up to the next
8 twenty-five million dollars, shall be applied to the remaining balance of the
9 experience account amortization base established in this Subsection, without
10 reamortization of such base.
11 D.(1) If both the original amortization base and the experience account
12 amortization base have been liquidated, the residual allocation shall be applied
13 to the system's oldest outstanding positive amortization base, excluding any
14 liability established pursuant to R.S. 11:102(B)(2)(a) or (3)(c) or (C)(6)(c) until
15 all such bases are completely liquidated. After the final base is completely
16 liquidated, the assets shall be treated as provided in R.S. 11:102(B)(4).
17 (2) If there are multiple positive bases of the same age and the same
18 duration, all such bases shall be collapsed into a single base for purposes of this
19 Subsection.
20 (3) If there are multiple positive bases of the same age but of different
21 durations, the oldest outstanding positive amortization base with the shortest
22 remaining amortization period shall be treated as the "oldest" for purposes of
23 this Subsection.
24 §102.2. Consolidation of amortization Amortization payment schedules; priority
25 excess return allocations; Teachers' Retirement System of Louisiana
26 A. * * *
27 (4) For purposes of this Section, the following shall apply:
28 (a) "Primary priority amount" shall mean the maximum amount of
29 system returns in excess of the system's actuarially-assumed rate of return that
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1 may be applied to the original amortization base, regardless of whether actual
2 returns that equal or exceed the maximum are available, and shall equal:
3 (i) For the June 30, 2015 valuation, one hundred million dollars.
4 (ii) For each valuation thereafter, the prior year's primary priority
5 amount increased by the percentage increase in the system's actuarial value of
6 assets for the prior year, if any.
7 (b) "Primary allocation" shall mean the actual returns available for
8 application to the original amortization base.
9 (c) "Secondary priority amount" shall mean the maximum amount of
10 system returns in excess of the system's actuarially-assumed rate of return that
11 may be applied to the experience account amortization base, regardless of
12 whether actual returns that equal or exceed the maximum are available, and
13 shall equal:
14 (i) For the June 30, 2015 valuation, one hundred million dollars.
15 (ii) For each valuation thereafter, before the original amortization base
16 is liquidated, the prior year's secondary priority amount increased by the
17 percentage increase in the system's actuarial value of assets for the prior year,
18 if any.
19 (iii) For the valuation in which the original amortization base is
20 liquidated, that year's secondary priority amount calculated pursuant to Item
21 (ii) of this Subparagraph plus any money from that year's primary priority
22 amount remaining after liquidation of the original amortization base.
23 (iv) For the first valuation after the original amortization base is
24 liquidated, the portion of the prior year's primary priority amount that was
25 necessary to liquidate the original amortization base plus the prior year's
26 secondary priority amount, both increased by the percentage increase in the
27 system's actuarial value of assets for the prior year, if any.
28 (v) For the second valuation after the original amortization base is
29 liquidated and for each valuation thereafter, the prior year's secondary priority
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1 amount increased by the percentage increase in the system's actuarial value of
2 assets for the prior year, if any.
3 (d) "Secondary allocation" shall mean the actual returns available for
4 application to the experience account amortization base.
5 (e) "Residual priority amount" shall mean the maximum amount of
6 system returns in excess of the system's actuarially-assumed rate of return that
7 may be applied to the oldest outstanding positive amortization base after
8 liquidation of the experience account amortization base, regardless of whether
9 actual returns that equal or exceed the maximum are available, and shall equal:
10 (i) For the valuation in which the experience account amortization base
11 is liquidated, the money from that year's secondary allocation remaining after
12 liquidation of the experience account amortization base, if any.
13 (ii) For the first valuation after the experience account amortization base
14 is liquidated, the prior year's secondary priority amount, increased by the
15 percentage increase in the system's actuarial value of assets for the prior year,
16 if any.
17 (iii) For the second valuation after the experience account amortization
18 base is liquidated and for each valuation thereafter, the prior year's residual
19 priority amount increased by the percentage increase in the system's actuarial
20 value of assets for the prior year, if any.
21 (f) "Residual allocation" shall mean the actual returns available for
22 application to the oldest outstanding positive amortization base after liquidation
23 of the experience account amortization base.
24 (g) In no event shall the total of one year's priority amounts be less than
25 the total of the previous year's priority amounts.
26 (h) Notwithstanding Subparagraph (i) of this Paragraph, effective for the
27 June thirtieth valuation following the fiscal year in which the system first
28 attains a funded percentage of eighty or more pursuant to R.S. 11:883.1 and for
29 each valuation thereafter, the net remaining liability of the amortization base
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1 to which the funds are applied shall be reamortized with annual level dollar
2 payments calculated as provided in R.S. 11:102 over the remainder of the
3 amortization period originally established for that amortization base.
4 (i) Beginning with the 2019-2020 Fiscal Year and every fifth fiscal year
5 thereafter, the remaining liability net of all payments made since the last
6 reamortization shall be reamortized over the remainder of the amortization
7 period originally established for that amortization base with annual payments
8 calculated as provided for in this Section.
9 (j) Except as provided in Subparagraphs (h) and (i) of this Paragraph
10 and in Item (B)(3)(a)(iv) and Subparagraph (C)(3)(d) of this Section, the net
11 remaining liability of the amortization base to which the funds are applied shall
12 not be reamortized after such application.
13 B. Original amortization base.
14 * * *
15 (3)(a) This consolidated amortization base shall be known as the "original
16 amortization base" and shall be amortized with annual payments calculated as
17 follows:
18 * * *
19 (iv) Notwithstanding any provision of this Section to the contrary, the net
20 remaining liability shall be reamortized over the remainder of the amortization
21 period ending in 2029 in the first valuation after the 2019-2020 Fiscal Year for
22 which this reamortization results in annual level dollar payments that do not
23 exceed the payment otherwise required for that valuation.
24 * * *
25 (4)(a) Except as provided in Paragraph (5) of this Subsection, in any year in
26 which the system exceeds its actuarially-assumed rate of return, the excess returns,
27 up to the first one hundred million dollars for the June 30, 2015, valuation, the
28 primary allocation shall be applied to the remaining balance of the original
29 amortization base established in this Subsection. The maximum amount of excess
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1 returns to be applied in any subsequent year pursuant to the provisions of this
2 Subparagraph shall equal the prior year's maximum amount increased by the
3 percentage increase in the system's actuarial value of assets for the preceding year,
4 if any.
5 (b) For any payment made pursuant to the provisions of this Paragraph, if the
6 system is eighty-five percent funded or greater prior to the application of the funds,
7 the net remaining liability shall be reamortized over the remaining amortization
8 period with annual payments calculated as provided in this Subsection or as
9 otherwise provided by law; if the system is less than eighty-five percent funded prior
10 to application of the funds, the net remaining liability shall not be reamortized after
11 such application.
12 (5) For the June 30, 2014, 2014 valuation, if the system exceeds its
13 actuarially-assumed rate of return, the excess returns, up to the first fifty million
14 dollars, shall be applied to the remaining balance of the original amortization base
15 established in this Subsection, without reamortization of such base.
16 C. Experience account amortization base.
17 * * *
18 (2) To this shall be applied the balance in the experience account or the
19 balance in the subaccount of the Texaco Account created pursuant to R.S.
20 11:883.1(A)(1)(b)(iii).
21 * * *
22 (4)(a) Except as provided in Paragraph (6) of this Subsection, in any year
23 before the liquidation of the original amortization base in which the excess
24 returns of the system exceed the primary priority amount applied to the Original
25 Amortization Base pursuant to Subparagraph (B)(4)(a) of this Section, the remaining
26 excess returns, up to the next one hundred million dollars for the June 30, 2015,
27 valuation, the secondary allocation shall be applied to the experience account
28 amortization base established in this Subsection. The maximum amount of excess
29 returns to be applied in any subsequent year pursuant to the provisions of this
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1 Subparagraph shall equal the prior year's maximum amount increased by the
2 percentage increase in the system's actuarial value of assets for the preceding year,
3 if any. In the year in which the original amortization base is liquidated and for
4 each year thereafter until the experience account amortization base is
5 liquidated, the secondary allocation shall be applied to the experience account
6 amortization base.
7 (b) For any payment made pursuant to the provisions of this Paragraph, if the
8 system is eighty-five percent funded or greater prior to the application of the funds,
9 the net remaining liability shall be reamortized over the remaining amortization
10 period with annual payments calculated as provided in this Subsection or as
11 otherwise provided by law; if the system is less than eighty-five percent funded prior
12 to application of the funds, the net remaining liability shall not be reamortized after
13 such application.
14 (5) Notwithstanding the provisions of R.S. 11:102(B)(3)(c) and (5) or any
15 other provision of law to the contrary, in any year from Fiscal Year 2009-2010
16 through Fiscal Year 2039-2040 in which the system receives an overpayment of
17 employer contributions as determined pursuant to R.S. 11:102(B)(2) and in any year
18 from Fiscal Year 2009-2010 through Fiscal Year 2039-2040 in which the system
19 receives additional contributions pursuant to R.S. 11:102(B)(5), the amount of such
20 overpayment or additional contribution shall be applied to the remaining balance of
21 the experience account amortization base established pursuant to this Subsection. For
22 any payment made pursuant to the provisions of this Paragraph, if the system is
23 eighty-five percent funded or greater prior to the application of the funds, the net
24 remaining liability shall be reamortized over the remaining amortization period with
25 annual payments calculated as provided in this Subsection or as otherwise provided
26 by law; if the system is less than eighty-five percent funded prior to application of
27 the funds, the net remaining liability shall not be reamortized after such application.
28 (6) For the June 30, 2014, 2014 valuation, if the excess returns of the system
29 exceed the amount applied to the original amortization base pursuant to
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1 Subparagraph (B)(5) of this Section, the remaining excess returns, up to the next fifty
2 million dollars, shall be applied to the remaining balance of the experience account
3 amortization base established in this Subsection, without reamortization of such
4 base.
5 D.(1) If both the original amortization base and the experience account
6 amortization base have been liquidated, the residual allocation shall be applied
7 to the system's oldest outstanding positive amortization base, excluding any
8 liability established pursuant to R.S. 11:102(B)(2)(a) or (3)(c) or (D)(6)(c), until
9 all such bases are completely liquidated. After the final base is completely
10 liquidated, the assets shall be treated as provided in R.S. 11:102(B)(4).
11 (2) If there are multiple positive bases of the same age and the same
12 duration, all such bases shall be collapsed into a single base for purposes of this
13 Subsection.
14 (3) If there are multiple positive bases of the same age but of different
15 durations, the oldest outstanding positive amortization base with the shortest
16 remaining amortization period shall be treated as the "oldest" for purposes of
17 this Subsection.
18 §102.3. Priority excess return allocations; Louisiana School Employees'
19 Retirement System
20 A. For purposes of this Section, the following shall apply:
21 (1) "Priority amount" shall mean the maximum amount of system
22 returns in excess of the system's actuarially-assumed rate of return that may be
23 applied to the oldest outstanding positive amortization base, regardless of
24 whether actual returns that equal or exceed the maximum are available, and
25 shall equal:
26 (a) For the June 30, 2015 valuation, fifteen million dollars.
27 (b) For each valuation thereafter, the prior year's priority amount
28 increased by the percentage increase in the system's actuarial value of assets for
29 the prior year, if any.
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1 (2) "Priority allocation" shall mean the actual returns available for
2 application to the oldest outstanding positive amortization base.
3 (3) For any valuation in which the oldest outstanding positive
4 amortization base is liquidated without using the full amount of the priority
5 allocation, the remaining amount from that year's priority allocation after
6 liquidation of the oldest base shall be applied to the next oldest base.
7 (4) In no event shall one year's priority amount be less than the previous
8 year's priority amount.
9 (5) Notwithstanding Paragraph (6) of this Subsection, effective for the
10 June thirtieth valuation following the fiscal year in which the system first
11 attains a funded percentage of eighty or more pursuant to R.S. 11:1145.1 and
12 for each valuation thereafter, the net remaining liability of the amortization
13 base to which the funds are applied shall be reamortized with annual level
14 dollar payments calculated as provided in R.S. 11:102 over the remainder of the
15 amortization period originally established for that amortization base.
16 (6) Beginning with the 2019-2020 Fiscal Year and every fifth fiscal year
17 thereafter, the remaining liability net of all payments made since the last
18 reamortization shall be reamortized over the remainder of the amortization
19 period originally established for that amortization base with annual payments
20 calculated as provided for in this Section.
21 (7) Except as provided in Paragraphs (5) and (6) of this Subsection, the
22 net remaining liability of the amortization base to which the funds are applied
23 shall not be reamortized after such application.
24 B.(1) Effective for the June 30, 2015 valuation and for each valuation
25 thereafter, if the system's investment experience for the fiscal year exceeds the
26 system's actuarially-assumed rate of return, the system shall apply the priority
27 allocation to the oldest outstanding positive amortization base of the system,
28 excluding any amortization base established to amortize a liability pursuant to
29 R.S. 11:102(B)(2)(a) or (3)(c) until all such bases are completely liquidated.
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1 After the final base is completely liquidated, the assets shall be treated as
2 provided in R.S. 11:102(B)(4).
3 (2) If there are multiple positive bases of the same age and the same
4 duration, all such bases shall be collapsed into a single base for purposes of this
5 Subsection.
6 (3) If there are multiple positive bases of the same age but of different
7 durations, the oldest outstanding positive amortization base with the shortest
8 remaining amortization period shall be treated as the "oldest" for purposes of
9 this Subsection.
10 C. Effective for the June 30, 2004 valuation, if the systems' investment
11 experience for the fiscal year exceeds the system's actuarially-assumed rate of
12 return, the system shall apply the excess investment experience returns, up to
13 a maximum of the first seven and one-half million dollars, to the oldest
14 outstanding positive amortization base of the system, excluding any
15 amortization base established to amortize a liability pursuant to R.S.
16 11:102(B)(2)(a) or (3)(c) without reamortization of such base.
17 §102.4. Priority excess return allocations; State Police Retirement System
18 A. For purposes of this Section, the following shall apply:
19 (1) "Priority amount" shall mean the maximum amount of system
20 returns in excess of the system's actuarially-assumed rate of return that may be
21 applied to the oldest outstanding positive amortization base, regardless of
22 whether actual returns that equal or exceed the maximum are available, and
23 shall equal:
24 (a) For the June 30, 2015 valuation, five million dollars.
25 (b) For each valuation thereafter, the prior year's priority amount
26 increased by the percentage increase in the system's actuarial value of assets for
27 the prior year, if any.
28 (2) "Priority allocation" shall mean the actual returns available for
29 application to the oldest outstanding positive amortization base.
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1 (3) For any valuation in which the oldest outstanding positive
2 amortization base is liquidated without using the full amount of the priority
3 allocation, the remaining amount from that year's priority allocation after
4 liquidation of the oldest base shall be applied to the next oldest base.
5 (4) In no event shall one year's priority amount be less than the previous
6 year's priority amount.
7 (5) Notwithstanding Paragraph (6) of this Subsection, effective for the
8 June thirtieth valuation following the fiscal year in which the system first
9 attains a funded percentage of eighty or more pursuant to R.S. 11:1332 and for
10 each valuation thereafter, the net remaining liability of the amortization base
11 to which the funds are applied shall be reamortized with annual level dollar
12 payments calculated as provided in R.S. 11:102 over the remainder of the
13 amortization period originally established for that amortization base.
14 (6) Beginning with the 2019-2020 Fiscal Year and every fifth fiscal year
15 thereafter, the remaining liability net of all payments made since the last
16 reamortization shall be reamortized over the remainder of the amortization
17 period originally established for that amortization base with annual payments
18 calculated as provided for in this Section.
19 (7) Except as provided in Paragraphs (5) and (6) of this Subsection, the
20 net remaining liability of the amortization base to which the funds are applied
21 shall not be reamortized after such application.
22 B.(1) Effective for the June 30, 2015 valuation and for each valuation
23 thereafter, if the system's investment experience for the fiscal year exceeds the
24 system's actuarially-assumed rate of return, the system shall apply the priority
25 allocation to the oldest outstanding positive amortization base of the system,
26 excluding any amortization base established to amortize a liability pursuant to
27 R.S. 11:102(B)(2)(a) or (3)(c) until all such bases are completely liquidated.
28 After the final base is completely liquidated, the assets shall be treated as
29 provided in R.S. 11:102(B)(4).
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1 (2) If there are multiple positive bases of the same age and the same
2 duration, all such bases shall be collapsed into a single base for purposes of this
3 Subsection.
4 (3) If there are multiple positive bases of the same age but of different
5 durations, the oldest outstanding positive amortization base with the shortest
6 remaining amortization period shall be treated as the "oldest" for purposes of
7 this Subsection.
8 C. Effective for the June 30, 2014 valuation, if the system's investment
9 experience for the fiscal year exceeds the system's actuarially-assumed rate of
10 return, the system shall apply the excess investment experience returns, up to
11 a maximum of the first two and one-half million dollars, to the oldest
12 outstanding positive amortization base of the system, excluding any
13 amortization base established to amortize a liability pursuant to R.S.
14 11:102(B)(2)(a) or (3)(c), and without reamortization of such base.
15 §102.5. State systems' 2014 valuation amortization period
16 Notwithstanding any provision of R.S. 11:102 or any other law to the
17 contrary, for the June 30, 2014 valuation the amortization period for investment
18 gains of the Louisiana State Employees' Retirement System, the Teachers'
19 Retirement System of Louisiana, the Louisiana School Employees' Retirement
20 System, and the State Police Retirement System not allocated to an amortization
21 base pursuant to R.S. 11:102.1, 102.2, 102.3, or 102.4 and not credited to the
22 experience account shall be five years.
23 §102.3. §102.6. Review of volatility
24 Following the close of Fiscal Year 2018-2019 2016-2017, the future volatility
25 of the then-existing schedules of each state system shall be reexamined by staff of
26 each system and of the legislature, including actuaries for both. The results of this
27 reexamination, which may identify issues to be resolved and include
28 recommendations for plan amendments, shall be reported to the Public Retirement
29 Systems' Actuarial Committee by November 1, 2019 2017. The committee shall
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1 review the results and determine what changes to the system plan provisions, if any,
2 are advisable. If appropriate, the committee shall make a recommendation to the
3 legislature by December 15, 2017, on whether and what type of legislation is
4 warranted.
5 * * *
6 §542. Experience account
7 A.(1)(a) Effective July 1, 2004, the balance in the experience account shall
8 be zero.
9 (b)(2) Effective June 30, 2009, the balance in the experience account shall be
10 zero. Any funds in the experience account on June 29, 2009, shall be allocated in the
11 following order:
12 (i)(a) To provide for any net investment loss attributable to the balance in the
13 account as provided in Paragraph (B)(1) Subparagraph (B)(3)(a) of this Section.
14 (ii)(b) To fund any permanent benefit increase or minimum benefit pursuant
15 to the Act that originated as House Bill No. 586 Act 144 of the 2009 Regular Session
16 of the Legislature.
17 (iii)(c) To apply to the experience account amortization base as provided in
18 R.S. 11:102.1(C)(2); however, as of June 30, 2009, these funds shall be transferred
19 to the system's Texaco Account and retained in a subaccount of that account until
20 that account is applied as provided in R.S. 11:102.1. The subaccount shall continue
21 to be credited and debited as provided in Subparagraph (A)(2)(b) and Paragraph
22 (B)(1) of this Section until such application.
23 B.(1) Effective for the June 30, 2015 valuation, the system's funded
24 percentage for purposes of this Section shall be determined before any
25 allocation to the experience account.
26 (2) The experience account shall be credited as follows:
27 (a) To the extent permitted by Paragraph (3) of this Subsection
28 Subparagraph (c) of this Paragraph and after allocation to the amortization bases
29 as provided in R.S. 11:102(B)(3)(d)(v)(bb) and 102.1, as applicable 11:102.1, an
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1 amount not to exceed fifty percent of the remaining balance of the prior year's net
2 investment experience gain as determined by the system's actuary.
3 (b) To the extent permitted by Paragraph (3) of this Subsection
4 Subparagraph (c) of this Paragraph, an amount not to exceed that portion of the
5 system's net investment income attributable to the balance in the experience account
6 during the prior year.
7 (3)(a)(c) In no event shall a credit be made to the account that would cause
8 the balance in the experience account to exceed the reserve necessary to grant:
9 (i) Two permanent benefit increases determined pursuant to Subsection C D
10 of this Section if the system is at least eighty percent funded or greater.
11 (ii) One permanent benefit increase as determined pursuant to Subsection C
12 D of this Section if the system is less than eighty percent funded.
13 (b)(d) If the system is less than eighty percent funded and the account has
14 reserves in excess of the amounts provided for in Item (a)(ii) (c)(ii) of this Paragraph,
15 it shall not apply credits to the account pursuant to Subparagraph (2)(b) of this
16 Subsection no amount shall be credited to the account.
17 B.(3) The experience account shall be debited as follows:
18 (1)(a) An amount equal to that portion of the system's net investment loss
19 attributable to the balance in the experience account during the prior year.
20 (2)(b) An amount sufficient to fund a permanent benefit increase granted
21 pursuant to Subsection C the provisions of this Section.
22 (3)(c) In no event shall the amount in the experience account fall below zero.
23 C.(1) In accordance with the provisions of this Section, the board of trustees
24 may recommend to the president of the Senate and the speaker of the House of
25 Representatives that the system be permitted to grant a permanent benefit increase
26 to retirees, survivors, and beneficiaries whenever the conditions in this Section are
27 satisfied and the balance in the experience account is sufficient to fund such benefit
28 fully on an actuarial basis, as determined by the system's actuary. If the legislative
29 auditor's actuary disagrees with the determination of the system's actuary, a
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1 permanent benefit increase shall not be granted. The board of trustees shall not grant
2 a permanent benefit increase unless such permanent benefit increase has been
3 approved by the legislature. Any such permanent benefit increase granted on or
4 before June 30, 2015, shall be limited to and shall only be payable based on an
5 amount not to exceed seventy thousand dollars of the retiree's annual benefit. Any
6 such permanent benefit increase granted on or after July 1, 2015, shall be limited to
7 and shall only be payable based on an amount not to exceed sixty thousand dollars
8 of the retiree's annual benefit. Effective for years after July 1, 1999, and on or before
9 June 30, 2015, the seventy-thousand dollar limit shall be increased each year in an
10 amount equal to any increase in the consumer price index (U.S. city average for all
11 urban consumers (CPI-U)) for the preceding year, if any. Effective on or after July
12 1, 2015, the sixty-thousand dollar limit shall be increased each year in an amount
13 equal to any increase in the consumer price index, (U.S. city average for all urban
14 consumers (CPI-U)) for the twelve-month period ending on the system's valuation
15 date, if any.
16 D.(1) No increase shall be granted if one or more of the following apply:
17 (a) The system is less than fifty-five percent funded.
18 (b) The system is at least fifty-five percent funded but less than
19 eighty-five percent funded and the legislature granted a benefit increase in the
20 preceding fiscal year.
21 (c) The system is less than eighty percent funded and the system fails to
22 earn an actuarial rate of return which exceeds the board-approved actuarial
23 valuation rate.
24 (2) Any increase granted pursuant to the provisions of this Section shall begin
25 on the July first following legislative approval, shall be payable annually, and shall
26 equal the amount required pursuant to Subparagraph (a) or (b) of this
27 Paragraph. If the balance in the experience account is not sufficient to fully
28 fund that sum on an actuarial basis as determined by the system actuary in
29 agreement with the legislative auditor's actuary, no increase shall be granted.
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1 The increase shall be an amount equal to the lesser of:
2 (a) An amount as determined in Paragraph (2) of this Subsection.
3 (b) The increase in the consumer price index, U.S. city average for all urban
4 consumers (CPI-U), as prepared by the U.S. Department of Labor, Bureau of Labor
5 Statistics, for the twelve-month period ending on the system's valuation date if any.
6 If the balance in the experience account is not sufficient to fund that sum, no increase
7 shall be granted.
8 (2)(a)(b)(i) If Three percent, if the system is at least eighty percent funded
9 or greater, three percent and the system earns an actuarial rate of return of at
10 least eight and one-quarter percent interest on the investment of the system's
11 assets.
12 (ii) Two and one-half percent if all of the following apply:
13 (b)(aa) If the The system is at least seventy-five percent funded but less than
14 eighty percent funded and the.
15 (bb) The system earns an actuarial rate of return of at least eight and
16 one-quarter percent interest on the investment of the system's assets.
17 (cc) The legislature has not granted a benefit increase in the preceding fiscal
18 year, two and one-half percent.
19 (c)(iii) If the Two percent, if either of the following applies:
20 (aa) The system is at least sixty-five percent funded but less than
21 seventy-five percent funded and the legislature has not granted a benefit increase in
22 the preceding fiscal year, two percent.
23 (bb) The system is at least seventy-five percent funded and the system
24 does not earn an actuarial rate of return of at least eight and one-quarter
25 percent interest on the investment of the system's assets.
26 (d)(iv) If One and one-half percent if the system is at least fifty-five percent
27 funded but less than sixty-five percent funded and the legislature has not granted a
28 benefit increase in the preceding fiscal year, one and one-half percent.
29 (e) If the system is less than fifty-five percent funded or if the system is less
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1 than eighty-five percent funded but more than fifty-five percent funded and the
2 legislature granted a benefit increase in the preceding fiscal year, no increase shall
3 be granted.
4 (3) Subject to the limitations contained in Paragraph (1) of this Subsection,
5 The percentage of each recipient's permanent benefit increase shall be based on the
6 benefit being paid to the recipient on the effective date of the increase. increase;
7 however, any such permanent benefit increase granted on or before June 30,
8 2015, shall be limited to and shall be payable based only on an amount not to
9 exceed seventy thousand dollars of the retiree's annual benefit. Additionally,
10 any such permanent benefit increase granted on or after July 1, 2015, shall be
11 limited to and shall be payable based only on an amount not to exceed sixty
12 thousand dollars of the retiree's annual benefit. Effective for years after July 1,
13 1999, and on or before June 30, 2015, the seventy-thousand dollar limit shall be
14 increased each year in an amount equal to any increase in the consumer price
15 index, U.S. city average for all urban consumers (CPI-U) for the preceding year.
16 Effective on or after July 1, 2015, the sixty-thousand dollar limit shall be
17 increased each year in an amount equal to any increase in the consumer price
18 index, U.S. city average for all urban consumers (CPI-U) for the twelve-month
19 period ending on the system's valuation date.
20 (4)(a) Notwithstanding any provision of this Section to the contrary, in
21 a year in which the experience account balance is insufficient to fund the
22 amount required pursuant to Paragraph (2) of this Subsection, the board may
23 make the recommendation provided in Subsection C of this Section if all of the
24 following conditions are satisfied:
25 (i) No benefit increase was granted in the preceding fiscal year.
26 (ii) The experience account balance established in the system valuation
27 for the preceding fiscal year reached its maximum reserve permitted pursuant
28 to Paragraph (B)(2)(c) of this Section applicable to the system valuation for that
29 valuation year.
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1 (iii) The experience account balance established in the system valuation
2 for the current fiscal year is insufficient to fund the increase permitted pursuant
3 to Paragraph (2) of this Subsection applicable to the system valuation for the
4 preceding fiscal year.
5 (iv) All of the insufficiency in the account is attributable to the following:
6 (aa) The growth of the cost of the increase, but only if that growth was
7 produced solely by either or both of these events:
8 (I) Changes in the pool of the eligible recipients.
9 (II) The growth in the benefit amount to which the increase applies due
10 to the application of the CPI-U pursuant to the provisions of Paragraph (3) of
11 this Subsection.
12 (bb) The insufficiency of credits to the account, if any, to cover the
13 growth in the cost of the increase.
14 (b) The amount of the increase shall be equal to the amount that the
15 balance in the experience account will fully fund rounded to the nearest lower
16 one-tenth of one percent.
17 (4)(a)E. (1)(a) Except as provided in Subparagraph (c) of this Paragraph, in
18 order to be eligible for any permanent benefit increase payable on or before June 30,
19 2009, there must be the funds available in the experience account to pay for such an
20 increase, and a retiree:
21 (i) Shall have received a benefit for at least one year; and.
22 (ii) Shall have attained at least age fifty-five.
23 (b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree
24 beneficiary shall be eligible for the permanent benefit increase payable on or before
25 June 30, 2009:
26 (i) If benefits had been paid to the retiree or the beneficiary, or both
27 combined, for at least one year; and.
28 (ii) In no event before the retiree would have attained age fifty-five.
29 (c)(i) The provisions of Items (a)(ii), (b)(ii), (d)(ii), and (e)(ii)(a)(ii) and
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1 (b)(ii) of this Paragraph shall not apply to any person who receives disability benefits
2 from this system, or who receives benefits based on the death of a disability retiree
3 of this system.
4 (ii) The actuarial cost of implementing the provisions of Acts 2001, No.
5 1162, shall be paid by debiting the experience account which must have the funds
6 available in the experience account to pay for such an increase.
7 (d)(2)(a) Except as provided in Subparagraph (c) of this Paragraph, in order
8 to be eligible for any permanent benefit increase payable on or after July 1, 2009,
9 there shall be the funds available in the experience account to pay for such an
10 increase, and a retiree:
11 (i) Shall have received a benefit for at least one year; and.
12 (ii) Shall have attained at least age sixty.
13 (e)(b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree
14 beneficiary shall be eligible for the permanent benefit increase payable on or after
15 July 1, 2009:
16 (i) If benefits had been paid to the retiree or the beneficiary, or both
17 combined, for at least one year; and.
18 (ii) In no event before the retiree would have attained age sixty.
19 (c) The provisions of Items (a)(ii) and (b)(ii) of this Paragraph shall not
20 apply to any person who receives disability benefits from this system, or who
21 receives benefits based on the death of a disability retiree of this system.
22 (5)(a) F.(1) The first normal permanent benefit increase shall be effective
23 July 1, 1999.
24 (2) The actuarial cost of implementing the provisions of Act 1162 of the
25 2001 Regular Session of the Legislature shall be paid by debiting the experience
26 account which shall have the funds available in the experience account to pay
27 for such an increase.
28 (3) Effective September 1, 2001, any retiree receiving a retirement benefit
29 shall be entitled to receive, as a permanent benefit increase, a minimum retirement
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1 benefit amounting to not less than thirty dollars per month for each year of creditable
2 service of the retiree or the maximum benefit earned in accordance with the
3 applicable benefit formula selected by the retiree at the time of retirement, whichever
4 is greater.
5 (i)(a) For any retiree who selected or selects an early retirement, an initial
6 benefit option, or a retirement option allowing the payment of benefits to a
7 beneficiary, there shall be a comparison of both the minimum benefit provided for
8 in this Paragraph and the maximum benefit and both such benefits shall be
9 actuarially reduced based upon the option selected by the retiree and the current
10 board-approved actuarial assumptions prior to the comparison and for the purpose
11 of determining which of the two benefit amounts results in the greater amount and
12 the greater amount shall be paid to the retiree.
13 (ii)(b) In order for the minimum benefit provided for in this Paragraph to be
14 compared to the annuity being paid to a retiree's named beneficiary, the minimum
15 benefit shall be reduced based on the option in effect and the current board-approved
16 actuarial assumptions. After reducing the minimum benefit provided for in this Item,
17 the reduced minimum benefit shall be compared to the beneficiary's annuity, and the
18 beneficiary shall be paid the greater of the beneficiary's reduced minimum benefit
19 or the amount of the beneficiary's annuity being paid at the time of the comparison.
20 (b)(c) The minimum benefits provided for in this Paragraph shall apply to all
21 retired members and beneficiaries receiving annuity payments or benefits on
22 September 1, 2001, and to all members retiring on and after September 1, 2001, and
23 to all beneficiaries receiving annuity payments on and after September 1, 2001, and
24 all such payments shall be funded by debiting the experience account.
25 * * *
26 §883.1. Experience account
27 A.(1)(a) Effective July 1, 2004, the balance in the experience account shall
28 be zero.
29 (b)(2) Effective June 30, 2009, the balance in the experience account shall be
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1 zero. Any funds in the account on June 29, 2009, shall be allocated in the following
2 order:
3 (i)(a) To provide for any net investment loss attributable to the balance in the
4 account as provided in Paragraph (B)(1) Subparagraph (B)(3)(a) of this Section.
5 (ii)(b) To fund any permanent benefit increase or minimum benefit pursuant
6 to the Act that originated as House Bill No. 586 Act 144 of the 2009 Regular Session
7 of the Legislature.
8 (iii)(c) To apply to the experience account amortization base as provided in
9 R.S. 11:102.2(C)(2); however, as of June 30, 2009, these funds shall be transferred
10 to the system's Texaco Account and retained in a subaccount of that account until
11 that account is applied as provided in R.S. 11:102.2. The subaccount shall continue
12 to be credited and debited as provided in Subparagraph (A)(2)(b) and Paragraph
13 (B)(1) of this Section until such application.
14 B.(1) Effective for the June 30, 2015 valuation, the system's funded
15 percentage for purposes of this Section shall be determined before any
16 allocation to the experience account.
17 (2) The experience account shall be credited as follows:
18 (a) To the extent permitted by Subparagraph (c) of this Paragraph (3) of this
19 Subsection and after allocation to the amortization bases as provided in R.S.
20 11:102(B)(3)(d)(vii)(bb) and 102.2, as applicable 11:102.2, an amount not to exceed
21 fifty percent of the remaining balance of the prior year's net investment experience
22 gain as determined by the system's actuary.
23 (b) To the extent permitted by Subparagraph (c) of this Paragraph (3) of
24 this Subsection, an amount not to exceed that portion of the system's net investment
25 income attributable to the balance in the experience account during the prior year.
26 (3)(a)(c) In no event shall a credit be made to the account that would cause
27 the balance in the experience account to exceed the reserve necessary to grant either
28 of the following:
29 (i) Two permanent benefit increases determined pursuant to Subsection C D
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1 of this Section if the system is at least eighty percent funded or greater.
2 (ii) One permanent benefit increase as determined pursuant to Subsection C
3 D of this Section if the system is less than eighty percent funded.
4 (b)(d) If the system is less than eighty percent funded and the account has
5 reserves in excess of the amounts provided for in Item (a)(ii) (c)(ii) of this Paragraph,
6 it shall not apply credits to the account pursuant to Subparagraph (2)(b) of this
7 Subsection no amount shall be credited to the account.
8 B.(3) The experience account shall be debited as follows:
9 (1)(a) An amount equal to that portion of the system's net investment loss
10 attributable to the balance in the experience account during the prior year.
11 (2)(b) An amount sufficient to fund a permanent benefit increase granted
12 pursuant to Subsection C the provisions of this Section.
13 (3)(c) In no event shall the amount in the experience account fall below zero.
14 C.(1) In accordance with the provisions of this Section, the board of trustees
15 may recommend to the president of the Senate and the speaker of the House of
16 Representatives that the system be permitted to grant a permanent benefit increase
17 to retirees and beneficiaries whenever the conditions in this Section are satisfied and
18 the balance in the experience account is sufficient to fund such benefit fully on an
19 actuarial basis, as determined by the system's actuary. If the legislative auditor's
20 actuary disagrees with the determination of the system's actuary, a permanent benefit
21 increase shall not be granted. The board of trustees shall not grant a permanent
22 benefit increase unless such permanent benefit increase has been approved by the
23 legislature.
24 D.(1) No increase shall be granted if one or more of the following apply:
25 (a) The system is less than fifty-five percent funded.
26 (b) The system is at least fifty-five percent funded but less than
27 eighty-five percent funded and the legislature granted a benefit increase in the
28 preceding fiscal year.
29 (c) The system is less than eighty percent funded and the system fails to
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1 earn an actuarial rate of return which exceeds the board-approved actuarial
2 valuation rate.
3 (2) Any increase granted pursuant to the provisions of this Section shall begin
4 on the July first following legislative approval, shall be payable annually, and shall
5 equal the amount required pursuant to Subparagraph (a) or (b) of this
6 Paragraph. If the balance in the experience account is not sufficient to fully
7 fund that sum on an actuarial basis as determined by the system actuary in
8 agreement with the legislative auditor's actuary, no increase shall be granted.
9 The increase shall be an amount equal to the lesser of:
10 (a) An amount as determined in Paragraph (2) of this Subsection.
11 (b) The increase in the consumer price index, U.S. city average for all urban
12 consumers (CPI-U), as prepared by the U.S. Department of Labor, Bureau of Labor
13 Statistics, for the twelve-month period ending on the system's valuation date, if any.
14 If the balance in the experience account is not sufficient to fund that sum, no increase
15 shall be granted.
16 (2)(a)(b)(i) If Three percent if the system is at least eighty percent funded
17 or greater, three percent and the system earns an actuarial rate of return of at
18 least eight and one-quarter percent interest on the investment of the system's
19 assets.
20 (b)(ii) If the Two and one-half percent, if all of the following apply:
21 (aa) The system is at least seventy-five percent funded but less than eighty
22 percent funded and the.
23 (bb) The system earns an actuarial rate of return of at least eight and
24 one-quarter percent interest on the investment of the system's assets.
25 (cc) The legislature has not granted a benefit increase in the preceding fiscal
26 year, two and one-half percent.
27 (c)(iii) If the Two percent, if either of the following applies:
28 (aa) The system is at least sixty-five percent funded but less than
29 seventy-five percent funded and the legislature has not granted a benefit increase in
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1 the preceding fiscal year, two percent.
2 (bb) The system is at least seventy-five percent funded and the system
3 does not earn an actuarial rate of return of at least eight and one-quarter
4 percent interest on the investment of the system's assets.
5 (d)(iv) If One and one-half percent, if the system is at least fifty-five
6 percent funded but less than sixty-five percent funded and the legislature has not
7 granted a benefit increase in the preceding fiscal year, one and one-half percent.
8 (e) If the system is less than fifty-five percent funded or if the system is less
9 than eighty-five percent funded but more than fifty-five percent funded and the
10 legislature granted a benefit increase in the preceding fiscal year, no increase shall
11 be granted.
12 (3) Subject to the limitations contained in Subsection F of this Section, the
13 The percentage of each recipient's permanent benefit increase shall be based on the
14 benefit being paid to the recipient on the effective date of the increase.
15 (a) Any such permanent benefit increase granted on or before June 30,
16 2015, shall be limited to and shall be payable based only on an amount not to
17 exceed seventy thousand dollars of the retiree's annual benefit. The seventy
18 thousand dollar limit shall be increased each year in an amount equal to any
19 increase in the consumer price index, U.S. city average for all urban consumers
20 (CPI-U) for the preceding year.
21 (b) Any such permanent benefit increase granted on or after July 1,
22 2015, shall be limited to and shall be payable based only on an amount not to
23 exceed sixty thousand dollars of the retiree's annual benefit. Effective on or
24 after July 1, 2015, the sixty thousand dollar limit shall be increased each year
25 in an amount equal to any increase in the consumer price index, U.S. city
26 average for all urban consumers (CPI-U) for the twelve-month period ending
27 on the system's valuation date.
28 (4)(a) Notwithstanding any provision of this Section to the contrary, in
29 a year in which the experience account balance is insufficient to fund the
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1 amount required pursuant to Paragraph (2) of this Subsection, the board may
2 make the recommendation provided in Subsection C of this Section if all of the
3 following conditions are satisfied:
4 (i) No benefit increase was granted in the preceding fiscal year.
5 (ii) The experience account balance established in the system valuation
6 for the preceding fiscal year reached its maximum reserve permitted pursuant
7 to Subparagraph (B)(2)(c) of this Section applicable to the system valuation for
8 that valuation year.
9 (iii) The experience account balance established in the system valuation
10 for the current fiscal year is insufficient to fund the increase permitted pursuant
11 to Paragraph (2) of this Subsection applicable to the system valuation for the
12 preceding fiscal year.
13 (iv) All of the insufficiency in the account is attributable to the following:
14 (aa) The growth of the cost of the increase, but only if that growth was
15 produced solely by either or both of these events:
16 (I) Changes in the pool of the eligible recipients.
17 (II) The growth in the benefit amount to which the increase applies due
18 to the application of the CPI-U pursuant to the provisions of Paragraph (3) of
19 this Subsection.
20 (bb) The insufficiency of credits to the account, if any, to cover the
21 growth in the cost of the increase.
22 (b) The amount of the increase shall be equal to the amount that the
23 balance in the experience account will fully fund rounded to the nearest lower
24 one-tenth of one percent.
25 (4)(a) E.(1)(a) Except as provided in Subparagraph (c) of this Paragraph, in
26 order to be eligible for any permanent benefit increase payable on or before June 30,
27 2009, there must be the funds available in the experience account to pay for such an
28 increase, and a retiree:
29 (i) Shall have received a benefit for at least one year; and.
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1 (ii) Shall have attained at least age fifty-five.
2 (b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree
3 beneficiary shall be eligible for the permanent benefit increase payable on or before
4 June 30, 2009:
5 (i) If benefits had been paid to the retiree or the beneficiary, or both
6 combined, for at least one year; and.
7 (ii) In no event before the retiree would have attained age fifty-five.
8 (c)(i) The provisions of Items (a)(ii), (b)(ii), (d)(ii), and (e)(ii) (a)(ii) and
9 (b)(ii) of this Paragraph shall not apply to any person who receives disability benefits
10 from this system, or who receives benefits based on the death of a disability retiree
11 of this system.
12 (ii) The actuarial cost of implementing the provisions of Acts 2001, No.
13 1162, shall be paid by debiting the experience account which must have the funds
14 available in the experience account to pay for such an increase.
15 (d)(2)(a) Except as provided in Subparagraph (c) of this Paragraph, in order
16 to be eligible for any permanent benefit increase payable on or after July 1, 2009,
17 there shall be the funds available in the experience account to pay for such an
18 increase, and a retiree:
19 (i) Shall have received a benefit for at least one year; and.
20 (ii) Shall have attained at least age sixty.
21 (e)(b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree
22 beneficiary shall be eligible for the permanent benefit increase payable on or after
23 July 1, 2009:
24 (i) If benefits had been paid to the retiree or the beneficiary, or both
25 combined, for at least one year; and.
26 (ii) In no event before the retiree would have attained age sixty.
27 (c) The provisions of Items (a)(ii) and (b)(ii) of this Paragraph shall not
28 apply to any person who receives disability benefits from this system, or who
29 receives benefits based on the death of a disability retiree of this system.
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1 F.(1) The first normal permanent benefit increase shall be effective July
2 1, 1999.
3 (2) The actuarial cost of implementing the provisions of Act 1162 of the
4 2001 Regular Session of the Legislature shall be paid by debiting the experience
5 account which shall have the funds available in the experience account to pay
6 for such an increase.
7 (5)(a)(3) On December 1, 2001, the board of trustees shall grant a one-time
8 cost-of-living adjustment to:
9 (i)(a) Each retiree who had twenty-five years of service credit, exclusive of
10 unused leave, or a disability retiree regardless of the number of years of service
11 credit, and had been receiving a benefit for at least fifteen years on December 1,
12 2001; and.
13 (ii)(b) Each nonretiree beneficiary receiving a benefit on December 1, 2001,
14 if the deceased member had twenty-five years of service credit exclusive of unused
15 leave, or was a disability retiree regardless of the number of years of service credit,
16 and the retiree and nonretiree beneficiary, or both combined, had received a benefit
17 for at least fifteen years.
18 (b)(c) The one-time adjustment payable to each recipient shall equal an
19 amount up to but not exceeding two hundred dollars a month, but the total monthly
20 benefit of any such recipient resulting from this adjustment shall not exceed one
21 thousand dollars.
22 * * *
23 §927. Contributions
24 * * *
25 B. * * *
26 (2)(a) Beginning July 1, 2014, and continuing through fiscal year Fiscal Year
27 2017-2018, each higher education board created by Article VIII of the Constitution
28 of Louisiana and each employer institution and agency under its supervision and
29 control shall contribute to the Teachers' Retirement System of Louisiana on behalf
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1 of each participant in the optional retirement plan the sum of:
2 (i) The amounts calculated pursuant to R.S. 11:102(D)(4)(b),
3 11:102(D)(6)(b), (c), and (d).
4 * * *
5 (b) Beginning July 1, 2018, each higher education board created by Article
6 VIII of the Constitution of Louisiana and each employer institution and agency under
7 its supervision and control shall contribute to the Teachers' Retirement System of
8 Louisiana on behalf of each participant in the optional retirement plan the sum of:
9 (i) The amounts calculated pursuant to R.S. 11:102(D)(4)(b),
10 11:102(D)(6)(b), (c), and (d).
11 * * *
12 (3)(a) Beginning July 1, 2014, for all employers each employer that are is
13 not a higher education board created by Article VIII of the Constitution of Louisiana
14 or an employer institution under the supervision and control of such a board, each
15 such employer institution and board shall contribute to the Teachers' Retirement
16 System of Louisiana on behalf of each participant in the optional retirement plan the
17 greater of:
18 (i) The amount it would have contributed if the participant were a member
19 of the regular retirement plan of the Teachers' Retirement System of Louisiana
20 pursuant to R.S. 11:102(D)(1) 11:102(D)(3).
21 (ii) The sum of the amounts calculated pursuant to R.S. 11:102(D)(4)(b),
22 11:102(D)(6)(b), (c), and (d) plus six and two-tenths percent of pay.
23 * * *
24 §1145.1. Employee Experience Account Experience account
25 A.(1) The Employee Experience Account experience account shall be
26 credited as follows:
27 (a) To the extent permitted by Subparagraph (c) of this Paragraph (2) of this
28 Subsection and after allocation to the amortization bases as provided in R.S.
29 11:102(B)(3)(d)(vi)(bb) 11:102.3, an amount not to exceed fifty percent of the
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1 remaining balance of the prior year's net investment experience gain as determined
2 by the system's actuary.
3 (b) To the extent permitted by Subparagraph (c) of this Paragraph (2) of
4 this Subsection, an amount not to exceed that portion of the system's net investment
5 income attributable to the balance in the Employee Experience Account experience
6 account during the prior year.
7 (2)(a)(c) In no event shall a credit be made to the account that would cause
8 the balance in the Employee Experience Account experience account to exceed the
9 reserve necessary to grant:
10 (i) Two cost-of-living adjustments permanent benefit increases determined
11 pursuant to Subsection C of this Section if the system is at least eighty percent
12 funded or greater.
13 (ii) One permanent benefit increase as determined pursuant to Subsection C
14 of this Section if the system is less than eighty percent funded.
15 (b)(d) If the system is less than eighty percent funded and the account has
16 reserves in excess of the amounts provided for in Item (a)(ii) (c)(ii) of this Paragraph,
17 it shall not apply credits to the account pursuant to Subparagraph (1)(b) of this
18 Subsection no amount shall be credited to the account.
19 B.(2) The Employee Experience Account experience account shall be
20 debited as follows:
21 (1)(a) An amount equal to that portion of the system's net investment loss
22 attributable to the balance in the Employee Experience Account experience account
23 during the prior year.
24 (2)(b) An amount sufficient to fund a cost-of-living adjustment permanent
25 benefit increase granted pursuant to Subsection C the provisions of this Section.
26 (3)(c) In no event shall the amount in the Employee Experience Account
27 experience account fall below zero.
28 (3) Effective for the June 30, 2015 valuation, the system's funded
29 percentage for purposes of this Section shall be determined before any
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1 allocation to the experience account.
2 C.(1)B. In accordance with the provisions of this Section, the board of
3 trustees may recommend to the president of the Senate and the speaker of the House
4 of Representatives that the system be permitted to grant a cost-of-living adjustment
5 permanent benefit increase to retirees and beneficiaries whenever the conditions
6 in this Section are satisfied and the balance in the Employee Experience Account is
7 sufficient to fully fund such benefit on an actuarial basis, as determined by the
8 system's actuary. If the legislative actuary disagrees with the determination of the
9 system's actuary, a cost-of-living adjustment shall not be granted. The board of
10 trustees shall not grant a cost-of-living adjustment permanent benefit increase
11 unless such cost-of-living adjustment permanent benefit increase has been
12 approved by the legislature. Any such cost-of-living adjustment granted on or before
13 June 30, 2015, shall be limited to and shall only be payable based on an amount not
14 to exceed eighty-five thousand dollars of the retiree's annual benefit. Any such cost-
15 of-living adjustment granted on or after July 1, 2015, shall be limited to and shall
16 only be payable based on an amount not to exceed sixty thousand dollars of the
17 retiree's annual benefit. Effective for years after July 1, 2007, and on or before June
18 30, 2015, the eighty-five thousand dollar limit shall be increased each year in an
19 amount equal to the increase in the Consumer Price Index (United States city average
20 for all urban consumers (CPI-U)), as prepared by the United States Department of
21 Labor, Bureau of Labor Statistics, for the preceding calendar year, if any. Effective
22 on or after July 1, 2015, the sixty-thousand dollar limit shall be increased each year
23 in an amount equal to any increase in the consumer price index (U.S. city average
24 for all urban consumers (CPI-U)) for the twelve-month period ending on the system's
25 valuation date, if any.
26 C.(1) No increase shall be granted if either of the following applies:
27 (a) The system is less than fifty-five percent funded.
28 (b) The system is at least fifty-five percent funded but less than
29 eighty-five percent funded and the legislature granted a benefit increase in the
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1 preceding fiscal year.
2 (2) Any cost-of-living adjustment increase granted pursuant to the provisions
3 of this Section shall begin on the July first following legislative approval, shall be
4 payable annually, and shall equal the amount required pursuant to Subparagraph
5 (a) or (b) of this Paragraph. If the balance in the experience account is not
6 sufficient to fully fund that sum on an actuarial basis as determined by the
7 system actuary in agreement with the legislative auditor's actuary, no increase
8 shall be granted. The increase shall be an amount equal to the lesser of:
9 (a) An amount as determined in Paragraph (2) of this Subsection.
10 (b) The increase in the Consumer Price Index (United States city average for
11 all urban consumers (CPI-U)) consumer price index, U.S. city average for all
12 urban consumers (CPI-U), as prepared by the United States Department of Labor,
13 Bureau of Labor Statistics, for the twelve-month period ending on the system's
14 valuation date, if any. If the balance in the experience account is not sufficient to
15 fund that sum, no increase shall be granted.
16 (2)(a)(b)(i) If Three percent if the system is at least eighty percent funded
17 or greater, three percent and the system earns an actuarial rate of return of at
18 least seven and one-quarter percent interest on the investment of the system's
19 assets.
20 (b)(ii) If the Two and one-half percent, if all the following apply:
21 (aa) The system is at least seventy-five percent funded but less than eighty
22 percent funded and the system earns an actuarial rate of return of at least seven
23 and one-quarter percent interest on the investment of the system's assets.
24 (bb) The legislature has not granted a benefit increase in the preceding fiscal
25 year, two and one-half percent.
26 (c)(iii) If the Two percent, if either of the following applies:
27 (aa) The system is at least sixty-five percent funded but less than
28 seventy-five percent funded and the legislature has not granted a benefit increase in
29 the preceding fiscal year, two percent.
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1 (bb) The system is at least seventy-five percent funded and the system
2 does not earn an actuarial rate of return of at least seven and one-quarter
3 percent interest on the investment of the system's assets.
4 (d)(iv) If One and one-half percent, if the system is at least fifty-five
5 percent funded but less than sixty-five percent funded and the legislature has not
6 granted a benefit increase in the preceding fiscal year, one and one-half percent.
7 (e) If the system is less than fifty-five percent funded or if the system is less
8 than eighty-five percent funded but more than fifty-five percent funded and the
9 legislature granted a benefit increase in the preceding fiscal year, no increase shall
10 be granted.
11 (3) Subject to the limitations contained in Paragraph (1) of this Subsection,
12 the The percentage of each recipient's cost-of-living adjustment permanent benefit
13 increase shall be based on the benefit being paid to the recipient on the effective date
14 of the increase. increase; however, any such permanent benefit increase granted
15 on or before June 30, 2015, shall be limited to and shall be payable based only
16 on an amount not to exceed eighty-five thousand dollars of the retiree's annual
17 benefit. Additionally, any such permanent benefit increase granted on or after
18 July 1, 2015, shall be limited to and shall be payable based only on an amount
19 not to exceed sixty thousand dollars of the retiree's annual benefit. Effective for
20 years after July 1, 2007, and on or before June 30, 2015, the eighty-five
21 thousand dollar limit shall be increased each year in an amount equal to any
22 increase in the consumer price index, U.S. city average for all urban consumers
23 (CPI-U) for the preceding year. Effective on or after July 1, 2015, the sixty
24 thousand dollar limit shall be increased each year in an amount equal to any
25 increase in the consumer price index, U.S. city average for all urban consumers
26 (CPI-U) for the twelve-month period ending on the system's valuation date.
27 (4)(a) Notwithstanding any provision of this Section to the contrary, in
28 a year in which the experience account balance is insufficient to fund the
29 amount required pursuant to Paragraph (2) of this Subsection, the board may
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1 make the recommendation provided in Subsection B of this Section if all of the
2 following conditions are satisfied:
3 (i) No benefit increase was granted in the preceding fiscal year.
4 (ii) The experience account balance established in the system valuation
5 for the preceding fiscal year reached its maximum reserve permitted pursuant
6 to Subparagraph (A)(1)(c) of this Section applicable to the system valuation for
7 that valuation year.
8 (iii) The experience account balance established in the system valuation
9 for the current fiscal year is insufficient to fund the increase permitted pursuant
10 to Paragraph (2) of this Subsection applicable to the system valuation for the
11 preceding fiscal year.
12 (iv) All of the insufficiency in the account is attributable to the following:
13 (aa) The growth of the cost of the increase, but only if that growth was
14 produced solely by either or both of these events:
15 (I) Changes in the pool of the eligible recipients.
16 (II) The growth in the benefit amount to which the increase applies due
17 to the application of the CPI-U pursuant to the provisions of Paragraph (3) of
18 this Subsection.
19 (bb) The insufficiency of credits to the account, if any, to cover the
20 growth in the cost of the increase.
21 (b) The amount of the increase shall be equal to the amount that the
22 balance in the experience account will fully fund rounded to the nearest lower
23 one-tenth of one percent.
24 (4)(a)D.(1)(a) Except as provided in Subparagraph (c) of this Paragraph, in
25 order to be eligible for the cost-of-living adjustment permanent benefit increase,
26 there shall be the funds available in the Employee Experience Account experience
27 account to pay for such an adjustment, and a retiree:
28 (i) Shall have received a benefit for at least one year; and.
29 (ii) Shall have attained at least age sixty.
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1 (b) Except as provided in Subparagraph (c) of this Paragraph, a non-retiree
2 nonretiree beneficiary shall be eligible for the cost-of-living adjustment permanent
3 benefit increase:
4 (i) If benefits had been paid to the retiree, or the beneficiary, or both
5 combined, for at least one year; and.
6 (ii) In no event before the retiree would have attained age sixty.
7 (c) The provisions of Items (a)(ii) and (b)(ii) of this Paragraph shall not apply
8 to any person who receives disability benefits from this system or who receives
9 benefits based on the death of a disability retiree of this system.
10 D. The cost-of-living increase which is authorized by Subsection C of this
11 Section shall be limited to the lesser of either two percent or an amount determined
12 as provided in Subsection C of this Section in or for any year in which the system
13 does not earn an actuarial rate of return of at least seven and one-quarter percent
14 interest on the investment of the system's assets.
15 E. Effective July 1, 2007, the balance in the Employee Experience Account
16 experience account shall be zero.
17 * * *
18 §1332. Employee Experience Account Experience account
19 A.(1) The Employee Experience Account experience account shall be
20 credited as follows:
21 (a) To the extent permitted by Subparagraph (c) of this Paragraph (2) of this
22 Subsection and after the allocation to the amortization bases as provided in R.S.
23 11:102(B)(3)(d)(viii)(bb) 11:102.4, an amount not to exceed fifty percent of the
24 remaining balance of the prior year's net investment experience gain as determined
25 by the system's actuary.
26 (b) To the extent permitted by Subparagraph (c) of this Paragraph (2) of
27 this Subsection, an amount not to exceed that portion of the system's net investment
28 income attributable to the balance in the Employee Experience Account experience
29 account during the prior year.
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1 (2)(a)(c) In no event shall a credit be made to the account that would cause
2 the balance in the Employee Experience Account experience account to exceed the
3 reserve necessary to grant:
4 (i) Two cost-of-living adjustments permanent benefit increases as
5 determined pursuant to Subsection C of this Section if the system is at least eighty
6 percent funded or greater.
7 (ii) One permanent benefit increase as determined pursuant to Subsection C
8 of this Section if the system is less than eighty percent funded.
9 (b)(d) If the system is less than eighty percent funded and the account has
10 reserves in excess of the amounts provided for in Item (a)(ii) (c)(ii) of this Paragraph,
11 it shall not apply credits to the account pursuant to Subparagraph (1)(b) of this
12 Subsection no amount shall be credited to the account.
13 B.(2) The Employee Experience Account experience account shall be
14 debited as follows:
15 (1)(a) An amount equal to that portion of the system's net investment loss
16 attributable to the balance in the Employee Experience Account experience account
17 during the prior year.
18 (2)(b) An amount sufficient to fund a cost-of-living adjustment permanent
19 benefit increase granted pursuant to Subsection C or F the provisions of this
20 Section.
21 (3)(c) In no event shall the amount in the Employee Experience Account
22 experience account fall below zero.
23 (3) Effective for the June 30, 2015 valuation, the system's funded
24 percentage for purposes of this Section shall be determined before any
25 allocation to the experience account.
26 C.(1)B. In accordance with the provisions of this Section, the board of
27 trustees may recommend to the president of the Senate and the speaker of the House
28 of Representatives that the system be permitted to grant a cost-of-living adjustment
29 permanent benefit increase to retirees and beneficiaries whenever the conditions
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1 in this Section are satisfied and the balance in the Employee Experience Account is
2 sufficient to fully fund such benefit on an actuarial basis, as determined by the
3 system's actuary. If the legislative actuary disagrees with the determination of the
4 system's actuary, a cost-of-living adjustment shall not be granted. The board of
5 trustees shall not grant a cost-of-living adjustment permanent benefit increase
6 unless such cost-of-living adjustment permanent benefit increase has been
7 approved by the legislature. Any such cost-of-living adjustment granted on or before
8 June 30, 2015, shall be limited to and shall only be payable based on an amount not
9 to exceed eighty-five thousand dollars of the retiree's annual benefit. Any such cost-
10 of-living adjustment granted on or after July 1, 2015, shall be limited to and shall
11 only be payable based on an amount not to exceed sixty thousand dollars of the
12 retiree's annual benefit. Effective for years after July 1, 2007, and on or before June
13 30, 2015, the eighty-five thousand dollar limit shall be increased each year in an
14 amount equal to the increase in the consumer price index (United States city average
15 for all urban consumers (CPI-U)), as prepared by the United States Department of
16 Labor, Bureau of Labor Statistics, for the preceding calendar year, if any. Effective
17 on or after July 1, 2015, the sixty-thousand dollar limit shall be increased each year
18 in an amount equal to any increase in the consumer price index (U.S. city average
19 for all urban consumers (CPI-U)) for the twelve-month period ending on the system's
20 valuation date, if any.
21 C.(1) No increase shall be granted if either of the following applies:
22 (a) The system is less than fifty-five percent funded.
23 (b) The system is at least fifty-five percent funded but less than
24 eighty-five percent funded and the legislature granted a benefit increase in the
25 preceding fiscal year.
26 (2) Any adjustment increase granted pursuant to the provisions of this
27 Section shall begin on the July first following legislative approval, shall be payable
28 annually, and shall be an amount equal to the lesser of:
29 (a) An amount as determined in Paragraph (2) of this Subsection.
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1 (b) The increase in the consumer price index, (United States city average for
2 all urban consumers (CPI-U)) U.S. city average for all urban consumers (CPI-U),
3 as prepared by the United States Department of Labor, Bureau of Labor Statistics,
4 for the twelve-month period ending on the system's valuation date, if any. If the
5 balance in the experience account is not sufficient to fund that sum, no increase shall
6 be granted.
7 (2)(a)(b)(i) If Three percent, if the system is at least eighty percent funded
8 or greater, three percent and the system earns an actuarial rate of return of at
9 least seven percent interest on the investment of the system's assets.
10 (b)(ii) If the Two and one-half percent, if all of the following apply:
11 (aa) The system is at least seventy-five percent funded but less than eighty
12 percent funded and the system earns an actuarial rate of return of at least seven
13 percent interest on the investment of the system's assets.
14 (bb) The legislature has not granted a benefit increase in the preceding fiscal
15 year, two and one-half percent.
16 (c)(iii) If the Two percent, if either of the following applies:
17 (aa) The system is at least sixty-five percent funded but less than
18 seventy-five percent funded and the legislature has not granted a benefit increase in
19 the preceding fiscal year, two percent.
20 (bb) The system is at least seventy-five percent funded and the system
21 does not earn an actuarial rate of return of at least seven percent interest on the
22 investment of the system's assets.
23 (d)(iv) If One and one-half percent, if the system is at least fifty-five
24 percent funded but less than sixty-five percent funded and the legislature has not
25 granted a benefit increase in the preceding fiscal year, one and one-half percent.
26 (e) If the system is less than fifty-five percent funded or if the system is less
27 than eighty-five percent funded but more than fifty-five percent funded and the
28 legislature granted a benefit increase in the preceding fiscal year, no increase shall
29 be granted.
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1 (3) Subject to the limitations contained in Paragraph (1) of this Subsection,
2 the The percentage of each recipient's cost-of-living adjustment permanent benefit
3 increase shall be based on the benefit being paid to the recipient on the effective date
4 of the increase. increase; however, any such permanent benefit increase granted
5 on or before June 30, 2015, shall be limited to and shall be payable based only
6 on an amount not to exceed eighty-five thousand dollars of the retiree's annual
7 benefit. Additionally, any such permanent benefit increase granted on or after
8 July 1, 2015, shall be limited to and shall be payable based only on an amount
9 not to exceed sixty thousand dollars of the retiree's annual benefit. Effective for
10 years after July 1, 2007, and on or before June 30, 2015, the eighty-five
11 thousand dollar limit shall be increased each year in an amount equal to any
12 increase in the consumer price index, U.S. city average for all urban consumers
13 (CPI-U) for the preceding year. Effective on or after July 1, 2015, the sixty
14 thousand dollar limit shall be increased each year in an amount equal to any
15 increase in the consumer price index, U.S. city average for all urban consumers
16 (CPI-U) for the twelve-month period ending on the system's valuation date.
17 (4)(a) Notwithstanding any provision of this Section to the contrary, in
18 a year in which the experience account balance is insufficient to fund the
19 amount required pursuant to Paragraph (2) of this Subsection, the board may
20 make the recommendation provided in Subsection B of this Section if all of the
21 following conditions are satisfied:
22 (i) No benefit increase was granted in the preceding fiscal year.
23 (ii) The experience account balance established in the system valuation
24 for the preceding fiscal year reached its maximum reserve permitted pursuant
25 to Subparagraph (A)(1)(c) of this Section applicable to the system valuation for
26 that valuation year.
27 (iii) The experience account balance established in the system valuation
28 for the current fiscal year is insufficient to fund the increase permitted pursuant
29 to Paragraph (2) of this Subsection applicable to the system valuation for the
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1 preceding fiscal year.
2 (iv) All of the insufficiency in the account is attributable to the following:
3 (aa) The growth of the cost of the increase, but only if that growth was
4 produced solely by either or both of these events:
5 (I) Changes in the pool of the eligible recipients.
6 (II) The growth in the benefit amount to which the increase applies due
7 to the application of the CPI-U pursuant to the provisions of Paragraph (3) of
8 this Subsection.
9 (bb) The insufficiency of credits to the account, if any, to cover the
10 growth in the cost of the increase.
11 (b) The amount of the increase shall be equal to the amount that the
12 balance in the experience account will fully fund rounded to the nearest lower
13 one-tenth of one percent.
14 (4)(a) D.(1)(a)Except as provided in Subparagraph (c) of this Paragraph, in
15 order to be eligible for the cost-of-living adjustment permanent benefit increase,
16 there shall be the funds available in the experience account to pay for such an
17 adjustment, and a retiree:
18 (i) Shall have received a benefit for at least one year; and.
19 (ii) Shall have attained at least age sixty.
20 (b) Except as provided in Subparagraph (c) of this Paragraph, a non-retiree
21 nonretiree beneficiary shall be eligible for the cost-of-living adjustment permanent
22 benefit increase:
23 (i) If benefits had been paid to the retiree, or the beneficiary, or both
24 combined, for at least one year; and.
25 (ii) In no event before the retiree would have attained age sixty.
26 (c) The provisions of Items (a)(ii) and (b)(ii) of this Paragraph shall not apply
27 to any person who receives disability benefits from this system or who receives
28 benefits based on the death of a disability retiree of this system.
29 D. The cost-of-living increase which is authorized by Subsection C of this
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1 Section shall be limited to the lesser of either two percent or an amount determined
2 as provided in Subsection C of this Section in or for any year in which the system
3 does not earn an actuarial rate of return of at least seven percent interest on the
4 investment of the system's assets.
5 E. Effective July 1, 2007, the balance in the Employee Experience Account
6 experience account shall be zero.
7 F. In addition to the cost-of-living adjustment permanent benefit increase
8 authorized by Subsection C B of this Section, the board of trustees may grant a
9 supplemental cost-of-living adjustment permanent benefit increase to all retirees
10 and beneficiaries who are at least age sixty-five, which shall consist of an amount
11 equal to two percent of the benefit being received on the date of the adjustment
12 increase. In order to grant such supplemental cost-of-living adjustment permanent
13 benefit increase, the board of trustees shall recommend to the president of the
14 Senate and the speaker of the House of Representatives that the system be permitted
15 to grant such supplemental cost-of-living adjustment permanent benefit increase
16 to retirees and beneficiaries whenever the balance in the Employee Experience
17 Account experience account is sufficient to fully fund such benefit on an actuarial
18 basis, as determined by the system's actuary. If the legislative actuary disagrees with
19 the determination of the system's actuary, such supplemental cost-of-living
20 adjustment permanent benefit increase shall not be granted. The board of trustees
21 shall not grant such supplemental cost-of-living adjustment permanent benefit
22 increase unless such supplemental cost-of-living adjustment permanent benefit
23 increase has been approved by the legislature. Any such supplemental cost-of-living
24 adjustment permanent benefit increase paid on or before June 30, 2015, shall be
25 limited to and shall only be payable based only on an amount not to exceed
26 eighty-five thousand dollars of the retiree's annual benefit. Any such supplemental
27 cost-of-living adjustment permanent benefit increase paid on or after July 1, 2015,
28 shall be limited to and shall only be payable based only on an amount not to exceed
29 sixty thousand dollars of the retiree's annual benefit. Effective on and after July 1,
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1 2007, and on or before June 30, 2015, the eighty-five thousand dollar limit shall be
2 increased each year in an amount equal to the increase in the consumer price index,
3 (United States city average for all urban consumers (CPI-U)) U.S. city average for
4 all urban consumers (CPI-U), as prepared by the United States Department of
5 Labor, Bureau of Labor Statistics, for the preceding calendar year, if any. Effective
6 on and after July 1, 2015, the sixty-thousand sixty thousand dollar limit shall be
7 increased each year in an amount equal to the increase in the consumer price index,
8 (United States city average for all urban consumers (CPI-U)) U.S. city average for
9 all urban consumers (CPI-U), as prepared by the United States Department of
10 Labor, Bureau of Labor Statistics, for the twelve-month period ending on the
11 system's valuation date, if any. Any cost-of-living adjustment permanent benefit
12 increase granted pursuant to the provisions of this Subsection shall begin on the July
13 first following legislative approval and shall be payable annually.
14 Section 2. R.S. 11:102(B)(3)(d)(v), (vi), (vii), and (viii), 542(G), 883.1(G) and (H),
15 1145.1(F), and 1332(G) are hereby repealed.
16 Section 3. In case of any conflict between the provisions of this Act and the
17 provisions of any other Act of the 2016 Regular Session of the Legislature, the provisions
18 of this Act shall supersede and control regardless of the order of passage.
19 Section 4. This Act shall become effective on June 30, 2016; if vetoed by the
20 governor and subsequently approved by the legislature, this Act shall become effective on
21 June 30, 2016, or on the day following such approval by the legislature, whichever is later.
The original instrument was prepared by Margaret M. Corley. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Laura Gail Sullivan.
DIGEST
SB 18 Engrossed 2016 Regular Session Peacock
Proposed law generally rearranges the content of present law to provide for ease of
administration and clarification of certain actuarial concepts.
Proposed law contains a few substantive changes, as further detailed in this digest.
Unless otherwise indicated, the provisions of present law and proposed law apply to all four
state retirement systems:
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(1)La. State Employees' Retirement System (LASERS)
(2)Teachers' Retirement System of La. (Teachers' or TRSL)
(3)La. School Employees' Retirement System (LSERS)
(4)State Police Retirement System (Troopers)
OVERVIEW
Present law, relative to state retirement systems, generally provides for determination of
actuarial liabilities and calculations of payments to liquidate those liabilities. Provides for
application of certain actuarial gains to help reduce the payments necessary to liquidate a
system's liabilities, to reduce specific amortization bases of system debt, and for allocation
to a side account (the experience account) designed to accumulate monies to fund benefit
increases for retirees.
Proposed law retains present law.
Present law provides for determination of the amount and timing of permanent benefit
increases (PBIs) for retirees, sometimes called cost-of-living adjustments or COLAs.
Proposed law retains present law.
SUBSTANTIVE CHANGES
Present law, subject to certain caveats, provides for a schedule of maximum PBI amounts
based on a system's funded percentage. The schedule ranges from a minimum of 1.5% for
a system that is at least 55% funded but less than 65% funded to a maximum of 3.0% for a
system that is at least 80% funded. Provides for other changes to be triggered by the system's
funded percentage.
Proposed law retains present law.
Proposed law defines "funded percentage" for state systems. Provides that, except as
otherwise provided by law, "funded percentage" means valuation assets used to determine
contributions divided by accrued liability.
Proposed law, for purposes of determining the maximum PBI within the schedule in present
law, specifies that the funded percentage shall be determined before any allocation to the
experience account.
Present law provides that the amortization period for most actuarial changes, gains, or losses
shall be permanently reduced from 30 years to 20 years in the June 30
th
system valuation
following the fiscal year in which a system first attains a funded percentage of 85% or
greater.
Proposed law changes the trigger from 85% to 72% for LSERS and to 70% for the other
three systems.
Present law provides that, effective for the June 30, 2019 valuation, actuarial gains allocated
to the experience account shall be amortized as a loss with level payments over a ten-year
period.
Proposed law provides for this ten-year loss amortization to begin with the first system
valuation following June 30, 2015, in which an allocation is made to the system's experience
account.
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Present law provides for multiple employer contribution rates at LASERS and Teachers' for
the various specialty plans within each system.
Proposed law retains present law and consolidates all K-12 employee groups at Teachers'
into a single plan for rate purposes.
Present law, relative to LASERS and Teachers', provides for special amortization bases
called the original amortization base (OAB) and the experience account amortization base
(EAAB). Provides for increasing payment schedules for these debts. Provides for application
of annual "hurdle" payments, from investment earnings above a certain target, to extinguish
these debts.
Proposed law retains present law.
Present law provides for hurdle payments on LSERS' and Troopers' oldest debts.
Proposed law retains present law.
Present law provides that, after a hurdle payment is made, the net remaining debt the
payment is applied to shall not be reamortized unless the system is 85% funded.
Beginning in the 2020-2021 Fiscal Year, proposed law provides for reamortization of the net
remaining OAB liability when moving to level-dollar payments ending in 2029 results in
annual payments that are not more than the next annual payment otherwise required under
present law.
Proposed law provides that after a system first achieves a funded percentage of 80%, the
debt to which any future hurdle payment applies shall be reamortized over the remainder of
the originally-established amortization period.
Until a system is 80% funded, proposed law further provides for reamortization of the net
remaining liability after application of the hurdle payments in the 2019-2020 Fiscal Year and
in every fifth fiscal year thereafter.
Present law provides for the review of volatility of payment schedules with results reported
to the Public Retirement Systems' Actuarial Committee by Nov. 1, 2019.
Proposed law requires the report to be submitted by Nov. 1, 2017.
NONSUBSTANTIVE CHANGES
Present law provides for the following for each system:
(A)A 30-year amortization period for certain changes, gains, and losses with level dollar
amounts.
(B)A switch to a 20-year amortization period after a system attains a designated funded
percentage.
(C)Application of annual "hurdle" payments, from investment earnings above a certain
target, to extinguish certain debts.
(D)Indexing of hurdle payments by increasing them as the system's assets increase.
(E) Reamortization of debts subject to the hurdle payments under certain circumstances
after a system attains a designated funded percentage.
(F)Ten-year amortization of losses due to experience account allocations.
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(G)Five-year amortization of certain gains recognized in the 2014 valuation.
Proposed law retains present law.
Present law, relative to LSERS, provides for:
(H)The application of residual experience account funds on June 30, 2014, as a part of:
(I)The consolidation of existing amortization bases.
Proposed law retains present law.
Present law, relative to LASERS and Teachers', provides that:
(J)After the OAB is liquidated, the payments that had been applied to the OAB shall be
added to the hurdle payments to the EAAB.
(K)After the EAAB is liquidated, the payments that had been applied to the EAAB shall
be applied to the next oldest outstanding amortization base of debt.
Proposed law retains present law.
Present law provides for (L) a volatility review of future payment schedules for each system.
Proposed law retains present law.
Proposed law relative to the experience account at each system provides for:
(M)Credits and debits to the account.
(N)A schedule of maximum PBIs based on funded status.
(O)Payment of "partial" PBIs in certain circumstances when funds are not available for
a "full" PBI.
(P)PBIs only every other year until a threshold of funding is attained.
Proposed law retains present law.
A table of the major present law provisions that were relocated is below.
PROVISION SYSTEM PRESENT LAW PROPOSED LAW
A LASERS R.S. 11:102(B)(3)(d)(v)(aa)(I) R.S. 11:102(C)(2)(a)
TRSL R.S. 11:102(B)(3)(d)(vii)(aa)(I) R.S. 11:102(D)(2)(a)
LSERS R.S. 11:102(B)(3)(d)(vi)(aa)(I) R.S. 11:102(E)(1)
TroopersR.S. 11:102(B)(3)(d)(viii)(aa)(I) R.S. 11:102(F)(1)
B LASERS R.S. 11:102(B)(3)(d)(v)(aa)(II) R.S. 11:102(C)(2)(b)
TRSL R.S. 11:102(B)(3)(d)(vii)(aa)(II) R.S. 11:102(D)(2)(b)
LSERS R.S. 11:102(B)(3)(d)(vi)(aa)(II) R.S. 11:102(E)(3)
TroopersR.S. 11:102(B)(3)(d)(viii)(aa)(II) R.S. 11:102(F)(2)
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PROVISION SYSTEM PRESENT LAW PROPOSED LAW
C LASERS R.S. 11:102(B)(3)(d)(v)(bb)(I)&(II) R.S. 11:102.1
TRSL R.S. 11:102(B)(3)(d)(vii)(bb)(I) R.S. 11:102.2
LSERS R.S. 11:102(B)(3)(d)(vi)(bb)(I)&(II) R.S. 11:102.3
TroopersR.S. 11:102(B)(3)(d)(viii)(bb)(I)&(II)R.S. 11:102.4
D LASERS R.S. 11:102(B)(3)(d)(v)(bb)(I)&(II) R.S. 11:102.1(A)(4)
TRSL R.S. 11:102(B)(3)(d)(vii)(bb)(I)&(II) R.S. 11:102.2(A)(4)
LSERS R.S. 11:102(B)(3)(d)(vi)(bb)(II) R.S. 11:102.3(A)(1)(b)
TroopersR.S. 11:102(B)(3)(d)(viii)(bb)(II) R.S. 11:102.4(A)(1)(b)
E LASERS R.S. 11:102(B)(3)(d)(v)(bb)(I)&(II) R.S. 11:102.1(A)(4)(h)
TRSL R.S. 11:102(B)(3)(d)(vii)(bb)(I)&(II) R.S. 11:102.2(A)(4)(h)
LSERS R.S. 11:102(B)(3)(d)(vi)(bb)(II) R.S. 11:102.3(A)(5)
TroopersR.S. 11:102(B)(3)(d)(viii)(bb)(II) R.S. 11:102.4(A)(5)
F LASERS R.S. 11:102(B)(3)(d)(v)(cc) R.S. 11:102(C)(2)(c)
TRSL R.S. 11:102(B)(3)(d)(vii)(cc) R.S. 11:102(D)(2)(c)
LSERS R.S. 11:102(B)(3)(d)(vi)(cc) R.S. 11:102(E)(4)
TroopersR.S. 11:102(B)(3)(d)(viii)(cc) R.S. 11:103(F)(3)
G LASERS R.S. 11:102(B)(3)(d)(v)(dd) R.S. 11:102.5
TRSL R.S. 11:102(B)(3)(d)(vii)(dd) R.S. 11:102.5
LSERS R.S. 11:102(B)(3)(d)(vi)(dd) R.S. 11:102.5
TroopersR.S. 11:102(B)(3)(d)(viii)(dd) R.S. 11:102.5
H LSERS R.S. 11:102(B)(3)(d)(vi)(ee)(I) R.S. 11:102(E)(2)(b)
I LSERS R.S. 11:102(B)(3)(d)(vi)(ee)(II) R.S. 11:102(E)(2)(a)
J LASERS R.S. 11:102(B)(3)(d)(v)(bb)(I) R.S.
11:102.1(A)(4)(c)(iii),
(iv)&(v)
TRSL R.S. 11:102(B)(3)(d)(vii)(bb)(II) R.S.
11:102.2(A)(4)(c)(iii),
(iv)&(v)
K LASERS R.S. 11:102(B)(3)(d)(v)(bb)(II) R.S. 11:102.1(D)
TRSL R.S. 11:102(B)(3)(d)(vii)(bb)(II) R.S.
11:102.2(A)(4)(e)&(D)
L all R.S. 11:102.3 R.S. 11:102.6
M LASERS R.S. 11:542(A)(2)&(B) R.S. 11:542(B)(2)&(3)
TRSL R.S. 11:883.1(A)(2)&(B) R.S. 11:883.1(B)(2)&(3)
LSERS R.S. 11:1145.1(A)(1) R.S.
11:1145.1(A)(1)&(2)
TroopersR.S. 11:1332(A)(1) R.S. 11:1332(A)(1)&(2)
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PROVISION SYSTEM PRESENT LAW PROPOSED LAW
N LASERS R.S. 11:542(C)(2) R.S. 11:542(D)
TRSL R.S. 11:883.1(C)(2) R.S. 11:883.1(D)
LSERS R.S. 11:1145.1(C)(2) R.S. 11:1145.1(C)
TroopersR.S. 11:1332(C)(2) R.S. 11:1332(C)
O LASERS R.S. 11:542(G) R.S. 11:542(D)(4)
TRSL R.S. 11:883.1(H) R.S. 11:883.1(D)(4)
LSERS R.S. 11:1145.1(F) R.S. 11:1145.1(C)(4)
TroopersR.S. 11:1332(G) R.S. 11:1332(C)(4)
P LASERS R.S. 11:542(C)(2)(e) R.S. 11:542(D)(1)(b)
TRSL R.S. 11:883.1(C)(2)(e) R.S. 11:883.1(D)(1)(b)
LSERS R.S. 11:1145.1(C)(2)(e) R.S. 11:1145.1(C)(1)(b)
TroopersR.S. 11:1332(C)(2)(e) R.S. 11:1332(C)(1)(b)
Proposed law specifies that if the provisions of proposed law conflict with the provisions of
any other Act of the 2016 Regular Session, the provisions of proposed law shall supersede
and control regardless of the order of passage.
Effective June 30, 2016.
(Amends R.S. 11:102(B)(1), (2), (3)(intro para), (a), and (d)(intro para), (i), (ii), (iii), and
(iv), (4), and (5)(a) and (b), (C), and (D), 102.1(B)(4), (5), and (6) and (C)(2), (4), (5), and
(6), 102.2(B)(4) and (5) and (C)(2), (4), (5), and (6), 102.3, 542(A), (B), (C), (E), and (F),
883.1(A), (B), (C), (E), (F), and (G), 927(B)(2)(a)(intro para) and (i) and (b)(i) and (3)(a),
1145.1(A), (B), (C), (D), and (E), and 1332(A), (B), (C), (D), (E), and (F); adds R.S. 11:23,
102(E) and (F), 102.1(A)(4), (B)(3)(a)(iv), and (D), 102.2(A)(4), (B)(3)(a)(iv), and (D),
102.4, 102.5, 102.6, 542(D), and 883.1(D); repeals R.S. 11:102(B)(3)(d)(v), (vi), (vii), and
(viii), 542(G), 883.1(G) and (H), 1145.1(F), and 1332(G))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Retirement to the
original bill
1. Defines "funded percentage."
2. Provides that when LASERS, TRSL, and Troopers are 70% funded the
amortization period for most actuarial changes, gains, and losses shall be
reduced from 30 years to 20 years. Further provides that when LSERS is
72% funded the amortization period for most actuarial changes, gains, and
losses shall be reduced from 30 years to 20 years.
3. Until a system is 80% funded, provides for reamortization after application
of the hurdle payments in the 2019-2020 Fiscal Year and in every fifth fiscal
year thereafter.
4. Beginning with the 2020-2021 Fiscal Year, provides for reamortization of the
OAB payments when moving to level-dollar payments results in annual
payments ending in 2029 that are not more than the next annual payment
otherwise required under present law.
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5. Removes prescribed order in which credits and debits are to be made to the
experience account.
6. Makes technical changes.
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