HLS 20RS-118 ENGROSSED
2020 Regular Session
HOUSE BILL NO. 19
BY REPRESENTATIVE BACALA
RETIREMENT/MUNICIPAL POL: Establishes a funding deposit account for the
Municipal Police Employees' Retirement System and authorizes the board of trustees
of the system to modify required employer contribution rates
1 AN ACT
2To enact R.S. 11:2225.5 and to repeal R.S. 11:107.2 and 2225(A)(7), relative to the
3 Municipal Police Employees' Retirement System; to provide relative to the authority
4 of the board of trustees of the Municipal Police Employees' Retirement System to
5 modify employer contribution rates in certain circumstances; to establish a
6 cost-of-living adjustment pre-funding account within the Municipal Police
7 Employees' Retirement System; to provide relative to cost-of-living adjustments; and
8 to provide for related matters.
9 Notice of intention to introduce this Act has been published
10 as provided by Article X, Section 29(C) of the Constitution
11 of Louisiana.
12Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 11:2225.5 is hereby enacted to read as follows:
14 ยง2225.5. Cost-of-living adjustment pre-funding account
15 A.(1) There is hereby established a cost-of-living adjustment pre-funding
16 account. Such account shall be credited and charged solely as provided in this
17 Section.
Page 1 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 20RS-118 ENGROSSED
HB NO. 19
1 (2) The balance in the account shall be set equal to zero as of December 31,
2 2019.
3 (3)(a) Notwithstanding the provisions of R.S. 11:103 and 104, the board of
4 trustees may require a net direct contribution rate of up to eighty-five hundredths of
5 one percent more than the rate determined under R.S. 11:103.
6 (b) For any fiscal year terminating on or after December 31, 2019, in which
7 the board of trustees, pursuant to the provisions of Subparagraph (a) of this
8 Paragraph, sets the direct employer contribution rate higher than the rate determined
9 under R.S. 11:103, an amount equal to the amount by which the actual
10 board-authorized rate exceeds the rate determined under R.S. 11:103 multiplied by
11 the total actual payroll for the fiscal year shall be transferred to the account.
12 B. The funds in the account shall earn interest annually at the
13 board-approved valuation interest rate, and the interest shall be credited to the
14 account at least once a year.
15 C. Beginning with the June 30, 2020, valuation, the board of trustees may
16 in any fiscal year direct that funds from the account be charged to provide a
17 cost-of-living adjustment as provided in Subsection E of this Section.
18 D. For funding purposes, any asset value utilized in the calculation of the
19 actuarially required employer contribution shall be reduced by the cost-of-living
20 adjustment pre-funding account balance as of the asset determination date for such
21 calculation.
22 E.(1) Notwithstanding the provisions of R.S. 11:241 and 246, after June 30,
23 2020, the board of trustees may only provide cost-of-living adjustments in
24 accordance with Paragraph (2) of this Subsection.
25 (2) The board of trustees may provide a cost-of-living adjustment to all
26 retirees and beneficiaries who are sixty-five years of age or over, in an amount equal
27 to two percent of the benefit that was originally paid to the beneficiary. The first
28 cost-of-living increase provided after June 30, 2020, may be provided only if the
29 board has received a rate of return in excess of the valuation interest rate based on
Page 2 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 20RS-118 ENGROSSED
HB NO. 19
1 the actuarial value of assets for the current fiscal year, and the cost-of-living increase
2 may be payable from the investment income in excess of that determined by the
3 application of the valuation interest rate to the actuarial value of assets. Thereafter,
4 all cost-of-living adjustments shall be provided only from the cost-of-living
5 adjustment pre-funding account when sufficient funds are available. In either case,
6 the requirements of R.S. 11:243(D), (E), and (G) must be met.
7 Section 2. R.S. 11:107.2 and R.S. 11:2225(A)(7) are hereby repealed in their
8entirety.
9 Section 3. This Act shall become effective on June 30, 2020; if vetoed by the
10governor and subsequently approved by the legislature, this Act shall become effective on
11June 30, 2020, or on the day following such approval by the legislature, whichever is later.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 19 Engrossed 2020 Regular Session Bacala
Abstract: Authorizes the Municipal Police Employees' Retirement System (MPERS) to
increase required employer contribution rates in certain circumstances and
establishes a cost-of-living adjustment pre-funding account within the system for
collection of contribution remittances above the actuarially required amount.
Present law provides for employer contribution rates within MPERS. Provides that in any
fiscal year during which the recommended employer contribution rate would otherwise be
decreased, the board of trustees may either maintain the previous fiscal year's employer
contribution rate or set the employer contribution rate at any point between the previous
year's rate and the recommended rate.
Present law further provides that any excess funds resulting from the board's exercise of its
authority shall be combined with any contribution surplus, or offset by any contribution
shortfall, and the resulting balance, if greater than zero, shall be applied for the following
purposes:
(1)To reduce system unfunded accrued liabilities.
(2)To reduce the outstanding amortization charge base or bases.
Proposed law establishes a cost-of-living adjustment pre-funding account within MPERS
and further provides that the system may only provide for cost-of-living adjustments from
the funding deposit account. Authorizes the board of trustees to require a net direct
contribution to the pre-funding account of up to .85% more than otherwise authorized by
present law.
Page 3 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 20RS-118 ENGROSSED
HB NO. 19
Present law provides that MPERS may provide a supplemental cost-of-living adjustment
from interest income from investments to all retirees and beneficiaries who are 65 years of
age or over provided certain requirements are met. Proposed law provides that after June 30,
2020, the first of such cost-of-living increase may be funded under present law, and any such
cost-of-living increase thereafter may only be funded through the funding deposit account.
Effective June 30, 2020.
(Adds R.S. 11:2225.5; Repeals R.S. 11:107.2 and 2225(A)(7))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Retirement to the
original bill:
1. Create a fund specifically for funding cost-of-living adjustments.
2. Change the percent by which MPERS can increase required employer
contribution rates.
Page 4 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.