Louisiana Senate Bill SB513

Louisiana 2020 Regular Session

• Introduced: 3/31/20
• Refer: 5/4/20

Caption

Provides relative to rehiring of retirees. (8/1/20) (OR INCREASE APV)

Impact

SB513 is predicted to increase costs within the PERS due to the possibility of paying more benefits during the reemployment period. Retirees returning to work will still make contributions to their retirement system during their employment; however, they will not accrue additional benefits. This could mean that some retirees opt to return to work who otherwise would not have, potentially leading to increased payout from the retirement system and future actuarial costs. It is estimated that the PERS will incur increased administrative and benefit costs as a result of this bill.

Summary

Senate Bill 513 (SB513) proposes amendments to the Parochial Employees Retirement System (PERS) laws concerning the reemployment of retirees. The bill allows retirees who have been out of service for at least one year to be reemployed in critical shortage positions in parishes with populations of 50,000 or fewer without suspending their retirement benefits. This legislation is primarily focused on addressing workforce shortages in essential service areas by encouraging retirees to return to work without losing their earned benefits.

Sentiment

The sentiment surrounding SB513 appears to be mixed. Proponents argue that the measure is needed to mitigate staff shortages in critical service areas by providing a means for skilled retirees to return without losing their pension benefits. However, concerns have been raised regarding the potential for this to create fiscal pressures on the retirement system and the prospect of increased future benefits payouts. The debate encompasses a fundamental discussion on the balance between supporting workforce needs and ensuring the sustainability of the retirement system.

Contention

Notably, the bill restricts retired members who retired based on disability from returning to service under these provisions, which can be seen as potentially controversial. Furthermore, employing agencies must certify the existence of a critical shortage before rehiring retirees, which adds an administrative layer that could complicate the implementation of the bill. Critics worry that if not managed adequately, the implementation of SB513 could lead to unforeseen pressures on local budgets and the overall fiscal stability of the retirement fund.