OFFICE OF LEGISLATIVE AUDITOR
2025 REGULAR SESSION
ACTUARIAL NOTE
This Note has been prepared by the Actuary for the Louisiana
Legislative Auditor (LLA) with assistance from either the Fiscal Notes
staff of the Legislative Auditor or staff of the Legislative Fiscal Office
(LFO). The attachment of this Note provides compliance with the
requirements of R.S. 24:521 as amended by Act 353 of the 2016
Regular Session.
Kenneth J. “Kenny” Herbold, ASA, EA, MAAA
Director of Actuarial Services
Louisiana Legislative Auditor
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Bill Header: RETIREMENT SYSTEMS: Provides relative to membership in the Municipal Employees' Retirement System
Purpose of Bill: Proposed law allows a member in the Municipal Employees’ Retirement System MERS) with at least 5 years of vesting
service who becomes employed in a position covered by the Louisiana State Employees’ Retirement System (LASERS) after December
31, 2024 to remain in MERS rather than participate in LASERS.
Summary of Impact
1
: The estimated net actuarial and fiscal impact of the proposed legislation is summarized below.
Proposed law is expected to have minimal immediate or long-term impact on the net actuarial present value of expected future benefits
and administrative expenses incurred by the retirement systems A more detailed explanation can be found in Section I: Actuarial Impact
on Retirement Systems.
Net Fiscal Costs pertain to changes to all cash flows over the next five-year period including retirement system cash flows or cash flows
related to local and state government entities.
In the following table, expenditures and revenues include cash flows to or from the affected retirement system (e.g. administrative
expenses incurred by, benefit payments from, or contributions to the retirement system) and do not include administrative expenditures
and revenues specifically incurred by the state or local government entities associated with implementing the legislation. A more detailed
explanation can be found in Section II: Fiscal Impact on Retirement Systems.
Five Year Net Fiscal Costs Pertaining to: Expenditures Revenues
The Retirement Systems See Section II See Section II
Local Government Entities See Section II 0
State Government Entities See Section II 0
Total See Section II See Section II
In the following table, expenditures and revenues include administrative expenditures and revenues specifically incurred by the state or
local government entities associated with implementing the legislation and do not include cash flows to or from the affected retirement
system (i.e. contribution changes included in the above table). This information is provided by the LLA Local Government Services or
the Legislative Fiscal Office. A more detailed explanation can be found in Sections III: Fiscal Impact on Local Government Entities and
Section IV: Fiscal Impact on State Government Entities.
Five Year Net Fiscal Costs Pertaining to: Expenditures Revenues
Local Government Entities $ 0 $ 0
State Government Entities 0 0
Total $ 0 $ 0
1
This is a different assessment from the actuarial cost requiring a 2/3
rd
vote (refer to the section near the end of this Actuarial Note “Information
Pertaining to La. Const. Art. X, §29(F)”).
House Bill 8 HLS 25RS-385 Date: April 8, 2025
Original Organizations Affected: LASERS &
Author: Glorioso MERS
LLA Note HB 7.01 OR SEE ACTUARIAL NOTE FC 2025 REGULAR SESSION
ACTUARIAL NOTE HB 8
Page 2 of 3
I. ACTUARIAL IMPACT ON RETIREMENT SYSTEMS
This section of the actuarial note is intended to provide a brief outline of the changes in plan provisions and actuarial effect on key
aspects of the affected retirement systems.
Proposed law will result in some individuals who would otherwise participate in LASERS to, instead, remain in MERS. In general, this
would decrease total contributions to LASERS while increasing total contributions to MERS. Depending on the facts and circumstances
of each individual case, costs could be higher or lower for each retirement system. However, in the aggregate, the net result is expected
to be minimal over both the short- and long-term.
II. FISCAL IMPACT ON RETIREMENT SYSTEMS
This section of the actuarial note pertains to annual fiscal costs (savings) associated with the retirement systems.
Fiscal costs or savings include only cash flows to or from the affected retirement system (e.g. administrative expenses incurred by,
benefit payments from, or contributions to the retirement system) and do not include administrative expenditures and revenues
specifically incurred by the state or local government entities associated with implementing the legislation. A fiscal cost is denoted by
“Increase” or a positive number. Fiscal savings are denoted by “Decrease” or a negative number. A revenue increase is denoted by
“Increase” or a positive number. A revenue decrease is denoted by “Decrease” or a negative number.
Table A: Retirement System Fiscal Cost
Expenditures 2025-26 2026-27 2027-28 2028-29 2029-30 5-Year Total
State General Fund See below See below See below See below See below See below
Agy Self-Generated See below 0 0 0 0 0
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds See below See below See below See below See below See below
Annual Total See below See below See below See below See below See below
Revenues 2025-26 2026-27 2027-28 2028-29 2029-30 5-Year Total
State General Fund $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Agy Self-Generated See below See below See below See below See below See below
Stat Deds/Other 0 0 0 0 0 0
Federal Funds 0 0 0 0 0 0
Local Funds 0 0 0 0 0 0
Annual Total See below See below See below See below See below See below
Changes in employer contributions are reflected in the State General Fund and/or Local Fund expenditure lines above. The actual
sources of funding (e.g., Federal Funds, State General Fund, etc.) may vary by employer and are not differentiated in the table.
The proposed legislation is expected to have the following effects on retirement related fiscal costs and revenues during the five-
year measurement period.
1. Expenditures:
a. To the extent an individual(s) remains a MERS participant, rather than participate in LASERS, the member’s employer
will be remit contributions at the MERS contribution rate as opposed to the LASERS contribution rate. This will generate
higher expenditures for the employer (identified as State General Funds above) when MERS’ employer rate exceeds
LASERS’ rate and the opposite when MERS’ employer rate is lower than LASERS’ rate. Currently, MERS’ employer
rate is lower than LASERS’ rate.
b. To the extent an individual(s) who was previously a MERS participant that accepted a LASERS covered position after
December 31, 2024 and before the enactment of proposed law, elects to participate in MERS instead of LASERS, LASERS
expenditures would increase for the 2025-26 FY to account for the transfer of contributions received by LASERS. This
amount is not expected to be material.
2. Revenues:
For any individual(s) who remain in MERS rather than becoming members of LASERS, employer contributions (Agy Self-
Generated revenues) to LASERS would decrease and employer contributions to MERS would increase under proposed law
when compared with expectations under current law. However, any differences in total contributions are not expected to be
material.
III. FISCAL IMPACT ON LOCAL GOVERNMENT ENTITIES
This section of the actuarial note pertains to annual fiscal costs (savings) related to administrative expenditures and revenue impacts
incurred by local government entities other than those included in Section II.
The proposed legislation is not expected to have any additional effects on fiscal administrative costs and revenues related to local
government entities during the five-year measurement period, other than those outlined above.
IV. FISCAL IMPACT ON STATE GOVERNMENT ENTITIES
(Prepared by Legislative Fiscal Office)
This section of the actuarial note pertains to annual fiscal costs (savings) related to administrative expenditures and revenue impacts
incurred by state government entities other than those included in Section II.
Other than the impact on employer contribution rates which is already reflected in Section II above, there is no anticipated direct material
effect on governmental expenditures and revenues as a result of this measure. 2025 REGULAR SESSION
ACTUARIAL NOTE HB 8
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V. ACTUARIAL DISCLOSURES
Intended Use
This actuarial note is based on our understanding of the bill as of the date shown above. It is intended to be used by the legislature during
the current legislative session only and assumes no other legislative changes affecting the funding or benefits of the affected systems,
other than those identified, will be adopted. Other readers of this actuarial note are advised to seek professional guidance as to its content
and interpretation, and not to rely upon this communication without such guidance. The actuarial note, and any referenced documents,
should be read as a whole. Distribution of, or reliance on, only parts of this actuarial note could result in its misuse and may mislead
others. The summary of the impact of the bill included in this actuarial note is for the purposes of an actuarial analysis only, as required
by La. R.S. 24:521, and is not a legal interpretation of the provisions of the bill.
Actuarial Data, Methods and Assumptions
Unless indicated otherwise, this actuarial note was prepared using actuarial data, methods, and assumptions as disclosed in the most
recent actuarial valuation report adopted by the Public Retirement Systems’ Actuarial Committee (PRSAC). The assumptions and
methods are reasonable for the purpose of this analysis.
For certain calculations that may be presented herein, we have utilized commercially available valuation software and/or are relying on
proprietary valuation models and related software developed by our actuarial contractor. We made a reasonable attempt to understand the
intended purpose of, general operation of, major sensitivities and dependencies within, and key strengths and limitations of these models.
In our professional judgment, the models have the capability to provide results that are consistent with the purposes of the analysis and have
no material limitations or known weaknesses. Tests were performed to ensure that the model reasonably represents that which is intended
to be modeled.
To the extent that this actuarial note relies on calculations performed by the retirement systems’ actuaries, to the best of our knowledge, no
material biases exist with respect to the data, methods or assumptions used to develop the analysis other than those specifically identified.
We did not audit the information provided, but have reviewed the information for reasonableness and consistency with other information
provided by or for the affected retirement systems.
Conflict of Interest
Employees of the LLA are members of LASERS, however, there is nothing in the proposed legislation that will compromise the signing
actuary’s ability to present an unbiased statement of actuarial opinion.
Risks Associated with Measuring Costs
This actuarial note is an actuarial communication, and is required to include certain disclosures in compliance with Actuarial Standards
of Practice (ASOP) No. 51. Risk disclosures otherwise required by ASOP No. 51 do not apply to this actuarial note because the proposed
bill does not significantly change the types or levels of risks of the retirement system.
Certification
Kenneth J. Herbold is an Associate of the Society of Actuaries (ASA), a Member of the American Academy of Actuaries (MAAA), and
an Enrolled Actuary (EA) under the Employees Retirement Income Security Act of 1974. Mr. Herbold meets the US Qualification
Standards necessary to render the actuarial opinion contained herein.
VI. LEGISLATIVE PROCEDURAL ITEMS
Information Pertaining to La. Const. Art. X, §29(F)
☒ This bill contains a retirement system benefit provision having an actuarial cost.
Some members of a retirement system could receive a larger benefit with the enactment of this bill than what they would have
received without this bill.
Dual Referral Relative to Total Fiscal Costs or Total Cash Flows:
The information presented below is based on information contained in Sections II, III, and IV for the first three years following the 2025
Regular Session.
Senate House
☐ 13.5.1 Applies to Senate or House Instruments ☐ 6.8F Applies to Senate or House Instruments
If an annual fiscal cost ≥ $100,000, then bill is If an annual General Fund fiscal cost ≥ $100,000, then
dual referred to: bill is dual referred to:
Dual Referral: Senate Finance Dual Referral: Appropriations
☐ 13.5.2 Applies to Senate or House Instruments ☐ 6.8G Applies to Senate Instruments only
If an annual tax or fee change ≥ $500,000, then If a net fee decrease occurs or is an increase in annual
bill is dual referred to: fees and taxes ≥ $500,000, then bill is dual referred to:
Dual Referral: Revenue and Fiscal Affairs Dual Referral: Ways and Means