HLS 22RS-235 ENGROSSED
2022 Regular Session
HOUSE BILL NO. 21
BY REPRESENTATIVE BACALA
RETIREMENT/MUNICIPAL POL: Provides for a funding deposit account for Municipal
Police Employees' Retirement System and authorizes the board of trustees of the
system to modify required employer contributions
1 AN ACT
2To enact R.S. 11:2225.5 and to repeal R.S. 11:2225(A)(7), relative to the Municipal Police
3 Employees' Retirement System; to establish a funding deposit account; to provide
4 for source of funding therefor; to authorize the board of trustees to adjust employer
5 contribution rates; to provide for cost-of-living adjustments; to provide for funding,
6 eligibility, and payment of cost-of-living adjustments; to provide for payment of
7 system liabilities; and to provide for related matters.
8 Notice of intention to introduce this Act has been published
9 as provided by Article X, Section 29(C) of the Constitution
10 of Louisiana.
11Be it enacted by the Legislature of Louisiana:
12 Section 1. R.S. 11:2225.5 is hereby enacted to read as follows:
13 ยง2225.5. Funding deposit account
14 A.(1) There is hereby established a funding deposit account, hereafter in this
15 Section referred to as the account. The account shall be credited and charged solely
16 as provided in this Section.
17 (2) The balance in the account shall be set equal to zero as of July 1, 2022.
Page 1 of 5
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 22RS-235 ENGROSSED
HB NO. 21
1 (3) The funds in the account shall earn interest annually at the board
2 approved valuation interest rate, and the interest shall be credited to the account once
3 a year.
4 (B)(1) Notwithstanding the provisions of R.S. 11:103 and 104, for fiscal
5 years beginning on or after July 1, 2023, the board of trustees may require a net
6 direct contribution rate of up to the following applicable limit:
7 (a) For a year in which the employer contribution determined under R.S.
8 11:103 is equal to or greater than the rate applicable to the previous year, the rate
9 determined under R.S. 11:103 plus eighty-five hundredths of one percentage point.
10 (b) For a year in which the employer contribution determined under R.S.
11 11:103 is lower than the rate applicable to the previous year, the rate determined
12 under R.S. 11:103 plus eighty-five hundredths on one percentage point plus one-half
13 of the difference between the rates applicable to the two years.
14 (2) For any fiscal year in which the board of trustees sets the direct employer
15 contribution rate higher than the rate determined under R.S. 11:103, excess
16 contributions resulting from the higher rate shall be used as provided in Paragraph
17 (C)(1) of this Section or transferred to the account as provided in Paragraph (C)(2)
18 of this Section.
19 C.(1) Except as provided in Paragraph (2) of this Subsection, any excess
20 contributions resulting from the board's exercise of its authority pursuant to
21 Paragraph (B)(1) of this Section shall be applied, until exhausted, exclusively to
22 reduce the outstanding balance of the oldest positive amortization base; however, the
23 future payments for such amortization base shall continue to be made according to
24 the original amortization schedule established in compliance with the requirements
25 of Article X, Section 29(E)(3) of the Constitution of Louisiana until the outstanding
26 balance is fully liquidated.
27 (2) The board of trustees may dedicate a specific amount of excess
28 contributions, up to the amount generated by setting the rate equal to eighty-five
29 hundredths of one percentage point more than the rate determined under R.S. 11:103
Page 2 of 5
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 22RS-235 ENGROSSED
HB NO. 21
1 plus associated interest, to be used solely to pay cost-of-living adjustments. Such
2 funds shall be credited to the account.
3 D. Beginning with the June 30, 2024, valuation, the board of trustees may,
4 in any fiscal year, direct that the account be charged to provide a cost-of-living
5 adjustment as provided in Subsection F of this Section.
6 E. The amount in the account shall not be considered a system asset when
7 calculating employer contributions.
8 F.(1) Notwithstanding the provisions of R.S. 11:241 and 246, cost-of-living
9 adjustments may be provided only from the funding deposit account and only when
10 sufficient funds are available as determined by the actuary. The cost-of-living
11 adjustment shall only be payable as determined by the board of trustees, and the
12 board shall determine the following:
13 (a) Whether the cost-of-living adjustment is to be a one-time payment or a
14 permanent benefit increase.
15 (b) Whether the cost-of-living adjustment is based upon a retiree or
16 survivor's original or current benefit.
17 (c) Whether a minimum age is required to receive a cost-of-living
18 adjustment.
19 (d) Whether a retiree or survivor has met a minimum period since benefit
20 commencement in order to receive a cost-of-living adjustment.
21 (2) The amount of the cost-of-living adjustment shall not exceed three
22 percent of the benefit nor be payable to any retiree or survivor until at least one year
23 has elapsed since benefit commencement.
24 (3) Any adjustment to benefits for cost-of-living changes as provided in this
25 Subsection shall be made by formal action of the board of trustees and considered
26 amendments to the provisions of the retirement system.
27 Section 2. R.S. 11:2225(A)(7) is hereby repealed in its entirety.
Page 3 of 5
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 22RS-235 ENGROSSED
HB NO. 21
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 21 Engrossed 2022 Regular Session Bacala
Abstract: Establishes a funding deposit account for the Municipal Police Employees'
Retirement System (MPERS) for the purpose of granting and funding cost-of-living
adjustments (COLA).
Proposed law establishes a funding deposit account for MPERS.
Proposed law authorizes the board of trustees to require an employer contribution rate up to
the following limits:
(1)When the contribution rate is equal or greater than the previous year's rate, the board
can set the rate .85% greater than the fiscal year's rate.
(2)In a fiscal year when the contribution rate is lower than the previous year, the board
can set the rate at the otherwise required rate plus .85% plus half the difference
between the rates for the two years.
Proposed law requires that excess contributions be applied to reduce the outstanding balance
of the oldest amortization base or to COLAs.
Proposed law authorizes the board to dedicate a specific amount of the excess contributions,
.85% greater than the contribution rate, to fund COLAs.
Proposed law provides funds that a COLA shall be paid only with funds from the funding
deposit account and only when funds are sufficient.
Proposed law provides that the board of trustees shall determine the following when granting
a COLA:
(1)Whether the COLA is permanent or nonrecurring.
(2)Whether the COLA is based on the retiree or survivor's current or original benefit.
(3)Whether a minimum age is required.
(4)Whether a retiree or survivor meets minimum period since benefit commencement.
Proposed law provides that COLA payments may not exceed 3% of benefit or be payable
to the retiree or survivor until one year since benefit commencement.
Proposed law requires that an adjustment to benefits due to a COLA be made by formal
action by the board of trustees.
(Adds R.S. 11:2225.5; Repeals R.S. 11:2225(A)(7))
Page 4 of 5
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 22RS-235 ENGROSSED
HB NO. 21
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Retirement to the
original bill:
1. Repeal conflicting provisions of present law regarding use of investment
earnings to pay for COLAs.
Page 5 of 5
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.