Louisiana House Bill HB35

Louisiana 2021 Regular Session

• Introduced: 2/26/21
• Refer: 2/26/21

Caption

Provides for cost-of-living adjustments for members of the Municipal Police Employees' Retirement System and authorizes the board of trustees of the system to modify required employer contributions

Impact

The proposed legislation significantly alters how MPERS manages its funding structures, particularly by repealing existing prohibitions against increasing employer contribution rates beyond 15%. This change is expected to enhance the financial health of the retirement system by allowing for a more adaptable contribution strategy, particularly in response to changing funding requirements. Moreover, the bill introduces the establishment of a cost-of-living adjustment prefunding account, which aims to stabilize and secure funding for potential adjustments in retirement pay as needed in the future.

Summary

House Bill 35, presented by Representative Charles Owen during the 2021 Regular Session, modifies regulations regarding employer contributions and cost-of-living adjustments for the Municipal Police Employees' Retirement System (MPERS). The bill allows the board of trustees to adjust employer contributions beyond the previous maximum limits, specifically to a midpoint between the existing and new lower contributions. This flexibility is aimed at ensuring the system remains adequately funded while also providing for necessary adjustments to member benefits.

Sentiment

The sentiment around HB 35 appears to be cautiously optimistic among advocates for public safety employees, particularly those within law enforcement communities. Supporters appreciate the bill's intent to safeguard retirement benefits in an unpredictable fiscal environment. However, skepticism exists regarding the potential impacts on long-term funding sustainability and whether the proposed increases will be sufficient to support future retirees adequately.

Contention

One notable point of contention within the discussions regarding HB 35 is the balance between the immediate financial needs of retirees and the long-term sustainability of the retirement system. Critics argue that by allowing increased contribution flexibility, there may be a risk of mismanaging funds or creating obligations that could exceed future revenue streams. Additionally, the limitation on cost-of-living adjustments to only those retirees aged 67 or older has raised discussion on ensuring fairness and equity among all members of the retirement system.