Allows members of the Louisiana State Employees' Retirement System to purchase service credit for purposes of retirement eligibility. (7/1/11) (EN NO IMPACT APV)
Impact
The proposed changes would have significant implications for members of the Louisiana State Employees' Retirement System. By facilitating the purchase of service credit, SB9 aims to provide employees with increased flexibility in planning their retirement. However, the requirement for a lump sum payment could present a financial burden for some members, especially those who may not be able to afford the upfront costs. Additionally, the bill mandates the payment of increased insurance premiums for retirees who use purchased service credits to retire early, ensuring that the financial responsibility for any added risk to the retirement system is also considered.
Summary
Senate Bill 9, also known as SB9, aims to amend the Louisiana State Employees' Retirement System's regulations regarding the purchase of service credit for retirement purposes. Specifically, it allows members with at least five years of service to purchase up to five years of additional service credit in one-year increments. This purchase is contingent upon the member applying to the system and paying specified amounts that depend on actuarial calculations and member salaries. It establishes that purchased credits will only affect benefit calculations and not eligibility for retirement unless explicitly authorized.
Sentiment
Overall, the sentiment surrounding SB9 appears to be supportive among legislators, as evidenced by its approval in the Senate with a unanimous vote of 33-0. Proponents argue that the bill is a positive step toward enhancing employee benefits and providing more options for retirement planning. However, the potential financial implications, especially the upfront payment requirement and increased insurance costs, have raised concerns among retiree advocacy groups and stakeholders who worry about the affordability and accessibility of retirement benefits for all employees.
Contention
Notable points of contention primarily revolve around the financial obligation imposed on members wishing to purchase additional service credits. There are concerns that while the bill improves retirement planning options, it may disproportionately affect lower-income employees or those who lack the financial resources to make the lump sum payments. Additionally, the increase in health insurance premium costs for early retirees could deter employees from taking advantage of the new purchasing options, counterbalancing the intended benefits of the bill.
Allows members of the Louisiana State Employees' Retirement System to purchase service credit for purposes of retirement eligibility. (7/1/10) (EG1 SEE ACTUARIAL NOTE APV)
Provides relative to compliance with applicable federal tax qualification requirements for Teachers' Retirement System of Louisiana, Louisiana School Employees' Retirement System, and State Police Pension and Retirement System. (7/1/10) (EN NO IMPACT APV)
Authorizes a member of the Teachers' Retirement System of Louisiana to purchase credit for service as a teacher at an out-of-state nonpublic school (EG INCREASE APV)