Louisiana House Bill HB40

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

Provides for the rate of judicial interest for delinquent payments owed to the Firefighters' Pension and Relief Fund in the city of New Orleans (OR INCREASE FC LF EX)

Impact

The implications of HB 40 are significant for the funding of the NOFF. It intends to enhance the financial health of the pension fund by enabling it to recover debts owed with interest. Although the proposed law does not change existing benefits or employer contributions—since NOFF is not an actuarially funded system—it does impact how efficiently the fund can collect owed payments, thereby potentially reducing any unfunded accrued liabilities. The periodic certification of delinquencies could streamline revenue collection for the pension fund, promoting fiscal responsibility among local government entities.

Summary

House Bill 40 seeks to address the issues surrounding the Firefighters’ Pension and Relief Fund (NOFF) in New Orleans by setting a judicial interest rate for delinquent payments owed to the fund. The bill aims to ensure that the NOFF receives timely payments from the city and related political subdivisions, which are currently funded through various revenue sources including city licenses and appropriations. By allowing NOFF to certify delinquencies to the state treasurer, the city’s delayed payments can be rectified more efficiently, ensuring that firefighters' pensions are adequately funded.

Sentiment

The general sentiment surrounding HB 40 appears to be supportive, especially from advocates of firefighters' rights and benefits who recognize the need for stable funding mechanisms for their pensions. However, concerns might arise regarding the financial strain this could impose on local governments, particularly in times of budget constraints. Stakeholders may debate the balance between ensuring adequate pension funding and the fiscal capabilities of the city of New Orleans and other political subdivisions to meet these obligations in a timely manner.

Contention

Notable points of contention include concerns from local government representatives regarding potential increases in financial obligations due to the new interest rates on delinquent payments. These local officials might argue that such legislation could inadvertently lead to budgetary challenges, as municipalities could face deductions from the state in order to cover these debts. Additionally, there may be concerns about the fairness of implementing judicial interest rates that could further burden already struggling budgets across political subdivisions.