Louisiana Senate Bill SB12

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12
• Report Pass: 4/30/12
• Engrossed: 5/2/12
• Refer: 5/3/12
• Report Pass: 5/21/12
• Enrolled: 6/1/12
• Chaptered: 6/5/12
• Passed: 6/5/12

Caption

Provides for a 60-month average compensation for active employees. (7/1/12) (EN -$2,770,000 APV)

Impact

The implementation of SB12 is expected to affect the retirement benefits of thousands of state employees, particularly those hired after the specified cutoff date. By extending the average compensation period for newer employees, the bill introduces a level of alignment with broader financial strategies regarding state pension obligations. This change may lead to diminished immediate costs for the state but could affect long-term financial commitments as it adjusts how retirement benefits are calculated. The transition provisions detailed in the bill ensure that those nearing retirement are not negatively impacted by these changes, maintaining a level of stability for current employees.

Summary

Senate Bill 12, known as SB12, focuses on amending the provisions related to the calculation of average compensation for members of the Registrars of Voters Employees' Retirement System. The bill seeks to establish a clear distinction in how average compensation is computed for members based on their employment start dates, specifying a 60-month average for those employed after July 1, 2006, compared to a 36-month average for those who began employment before that date. This distinction aims to modernize the retirement plan framework and adapt to changing economic conditions and fiscal responsibilities.

Sentiment

Sentiment surrounding SB12 has been mixed among stakeholders. Proponents, including some legislators, consider the bill a necessary step toward fiscal responsibility and sustainability of the retirement system. They argue that by updating the compensation calculation methods, the bill addresses potential future shortfalls and ensures the longevity of the system. Conversely, critics express concerns about the implications for employees who may face reduced benefits under the new calculation methodology, arguing that such changes could hinder recruiting and retaining quality public sector workers.

Contention

Key points of contention regarding SB12 revolve around the potential impact on the retirement benefits of state employees, particularly those whose employment commenced before the cutoff date. While the bill includes transitional provisions aimed at mitigating disparities in benefits, opponents worry that establishing two separate calculation periods could create disparities and dissatisfaction among employees. There are apprehensions that this reform may set a precedent for future adjustments to public employee retirement benefits, igniting broader debates on pension reform.