Louisiana House Bill HB33

Louisiana 2016 Regular Session

• Introduced: 1/26/16
• Refer: 1/26/16
• Refer: 3/14/16

Caption

Provides for payment of cost-of-living adjustments (COLAs) to retirees and beneficiaries of state retirement systems without legislative approval in certain circumstances (OR INCREASE APV)

Impact

Currently, the law stipulates that COLAs can only be granted with legislative approval, and the approval process can complicate timely adjustments. Under HB 33, if the necessary actuarial conditions are met, COLAs will be automatically granted based on a specific template established by the law. The proposed changes will result in a more efficient process, ultimately leading to reductions in actuarial costs as adjustments will be controlled by the retirement boards rather than dictated by the legislature. However, it also means that the level of adjustments might be overall lower compared to what could have been legislated.

Summary

House Bill 33 aims to modify the procedure for granting cost-of-living adjustments (COLAs) to retirees and beneficiaries in state retirement systems by eliminating the requirement for legislative approval in certain cases. The bill allows the board of trustees of each retirement system to autonomously grant COLAs based on predetermined conditions, providing a mechanism to implement these adjustments without the need for a two-thirds majority vote from the legislature. This change is intended to streamline the process and ensure that beneficiaries can receive timely adjustments to their benefits.

Sentiment

The sentiment surrounding HB 33 appears to be cautious. Supporters view the bill as a positive step toward simplifying the COLA approval process and ensuring that affected retirees do not face delays due to political maneuvering. Conversely, some critics express concern that the removal of legislative oversight could lead to inconsistencies or lower overall benefits, with the potential long-term effects on retirees' welfare being a notable point of discussion.

Contention

A critical point of contention involves the balance of control between state entities and the legislature. Proponents argue that empowering retirement boards with more authority allows for quicker responses to inflation and living costs affecting retirees. However, opponents fear that this may erode necessary checks on the discretion of the trustees and could lead to less favorable conditions for retirees if boards prioritize budgetary concerns over equitable adjustments. The debate ultimately centers on ensuring fair benefits while managing the fiscal responsibilities of the state.