Louisiana House Bill HB45

Louisiana 2015 Regular Session

• Introduced: 2/27/15
• Refer: 2/27/15
• Refer: 4/13/15
• Report Pass: 4/22/15

Caption

Provides relative to implementation of new age sixty-two retirement eligibility for new hires in state systems (EG INCREASE APV)

Impact

The bill is expected to have a significant fiscal and actuarial impact on LASERS. By increasing the number of mandatory participants in the system, it is projected that future benefits will rise, leading to an increase in the total normal cost for the system. This is due to the fact that employees aged between 60 and 62 generally incur higher associated costs compared to younger employees. Moreover, while there will be an increase in actuarial costs due to more benefits being payable, the employer contribution rates to the unamortized actuarial liabilities (UAL) will remain unchanged, since the UAL will be distributed across a larger payroll base, potentially decreasing individual amortization rates.

Summary

House Bill 45 proposes changes to the age at which state employees may opt into the Louisiana State Employees’ Retirement System (LASERS). Currently, employees aged 60 and older at the time of employment have the option to decide their participation in LASERS. The bill changes this policy, making it mandatory for new hires who are 60 years old but less than 62 years to join the retirement system and relinquish their right to opt out. This change specifically targets future employees and aims to streamline the retirement process for older workers entering state service.

Sentiment

The general sentiment around HB 45 appears to be cautiously optimistic, with supporters advocating for the bill as a means to enhance benefits for new entrants into state employment. Yet, there are concerns from certain quarters about the financial implications of mandating participation for older new hires. Discussions highlight a balance between ensuring sustainable retirement benefits and managing the fiscal health of the state retirement system. The overall perspective seems to favor the preservation of retirement income security for future employees, while activating a collaborative dialogue about fiscal prudence.

Contention

Notably, potential points of contention arise regarding the mandatory nature of the bill and its impact on senior employees' choices. Critics of HB 45 may argue that forcing older employees into LASERS without an option to decline undermines personal autonomy, especially at an age where retirement planning is critical. There may be fears that the bill could discourage senior professionals from applying for state positions, fearing mandatory participation in retirement costs they may not want or need at that stage. This discussion balances on the broader implications of state policy on employment choices for older citizens.