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