Allows an optional retirement plan participant to transfer to the regular plan. (2/3 - CA10s29(F)) (6/15/14) (OR INCREASE APV)
Impact
The implications of SB 23 on existing state laws are significant, particularly regarding retirement system funding. The bill introduces potential increases in the unfunded accrued liability for TRSL, as the transfer could lead to more members opting for the defined benefit option, thereby increasing the system's liabilities without necessarily corresponding increases in contributions. The option for ORP participants will be available until June 30, 2020, indicating a time-sensitive opportunity for those affected to reconsider their retirement options and possibly secure a benefit that aligns with their long-term financial planning.
Summary
Senate Bill 23 allows participants of the Optional Retirement Plan (ORP) to revoke their previous irrevocable election and transfer their account balances to the Teachers' Retirement System of Louisiana (TRSL) defined benefit plan. This new law aims to provide greater flexibility for members who find the defined contribution nature of the ORP less beneficial over time. By enabling this transfer, SB 23 enhances benefit portability for higher education employees in Louisiana, as it allows them to align their retirement benefits with the more secure defined benefit structure provided by TRSL.
Sentiment
The sentiment from discussions surrounding SB 23 appears to be cautiously optimistic among proponents who emphasize the increased choice and potential benefits for ORP participants. Nonetheless, concerns exist regarding the fiscal ramifications of enabling these transfers, particularly the potential strain on TRSL resources. The discussions likely elicited a mix of support from constituents and concern from fiscal analysts tasked with assessing the impact on retirement system sustainability.
Contention
Key points of contention regarding SB 23 focus on the potential fiscal challenges it may impose on the TRSL. Critics might argue that while benefiting individual participants, the proposal could exacerbate financial instability within the retirement system due to unexpected surges in liabilities. The implications of this decision reverberate through state financial planning, leading to debates on the appropriate balance between individual benefits and collective fiscal responsibility within state-managed retirement systems.
Allows an optional retirement plan participant to transfer to the defined benefit plan on an actuarial basis. (2/3 - CA10s29(F))(6/15/22) (EG INCREASE APV)
Relative to the Teachers' Retirement System of La., allows a member in the optional retirement plan to make a one-time, irrevocable election to transfer to the defined benefit plan (OR COST INCREASE APV)
Provides for the definition of "regular retirement plan" for higher education employees participating in the Teachers' Retirement System of Louisiana. (2/3 - CA10s29(F)) (gov sig) (EG1 INCREASE APV)