Louisiana House Bill HB84

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14

Caption

Provides a supplemental benefit to qualifying retirees and beneficiaries of the La. State Employees' Retirement System (OR +$181,964,968 APV)

Impact

The enactment of HB 84 is estimated to result in an increase of $181,964,968 in the actuarial present value of future benefits for LASERS. This significant financial impact stems from the larger benefit distributions that will begin in the fiscal year following enactment. Importantly, current law requires that any benefit changes having an actuarial cost be legislatively approved, which aligns with the provisions of this bill. However, the adjustments in the LASERS Experience Account will be managed without modifying employer contributions, which could mitigate concerns regarding funding.

Summary

House Bill 84 aims to provide a supplemental benefit to qualifying retirees and beneficiaries of the Louisiana State Employees' Retirement System (LASERS). The bill proposes that the full balance of the Experience Account on July 1, 2014, be utilized for these supplemental benefits, potentially resulting in a permanent benefit increase estimated at 2.8% of current benefits. This increase would specifically apply to benefits payable on the first $96,931, allowing eligible retirees to receive an additional annual benefit that could reach up to $2,714.08.

Sentiment

The overall sentiment regarding HB 84 appears to be cautious yet supportive among many lawmakers, particularly those advocating for retiree benefits. Proponents argue that the bill addresses the need for sustained benefit increases amid rising living costs for retirees. However, concerns may be raised by legislators who prioritize fiscal responsibility and the long-term sustainability of state retirement funds, thus indicating a division in perspectives, though no major opposition has been explicitly noted.

Contention

One notable point of contention surrounding HB 84 relates to the implications of withdrawing substantial funds from the Experience Account for the proposed benefit increases. Critics may argue that while immediate benefits to retirees are essential, ensuring the long-term viability of the retirement system is equally critical. Additionally, the requirement for legislative approval for any benefit alterations adds a layer of complexity to future amendments and funding changes, raising questions about balance between retrospective benefits and ongoing fiscal responsibility.