Louisiana House Bill HB53

Louisiana 2016 Regular Session

• Introduced: 1/29/16
• Refer: 3/22/16
• Report Pass: 4/14/16
• Engrossed: 4/25/16
• Refer: 4/26/16
• Report Pass: 5/23/16
• Enrolled: 6/1/16
• Chaptered: 6/9/16
• Passed: 6/9/16

Caption

Provides relative to Deferred Retirement Option Plan accounts in the Parochial Employees' Retirement System and interest on such accounts (EN NO IMPACT APV)

Impact

HB 53 impacts state retirement statutes by redefining the management and investment of funds within the DROP accounts. The amendments intend to provide parochial employees with greater control over their retirement savings, including the option to transfer their balances into a self-directed subaccount for further investment. This not only increases the immediacy and relevance of the accounts for employees approaching retirement but also aligns them with federally compliant self-directed investment options, empowering members over their financial decisions.

Summary

House Bill 53 aims to amend the provisions regarding the Deferred Retirement Option Plan (DROP) accounts for members of the Parochial Employees' Retirement System in Louisiana. The main focus of the bill is to enhance the investment flexibility for these accounts, allowing funds to be invested in liquid asset money market investments as determined by the board of trustees. This change facilitates an annual crediting of interest based on actual returns from these investments, thereby potentially increasing the financial benefits for participating employees once they have exited the program but remain eligible for membership in the system.

Sentiment

The overall sentiment surrounding HB 53 appeared to be positive, with legislative discussions highlighting its potential perks for parochial employees. Supporters emphasized that the bill could offer an enhanced framework for managing retirement funds, empowering employees to make informed decisions regarding their investments. The sentiment also reflects a growing trend towards providing diverse financial options in retirement planning, marking a progressive shift in the management of public pension assets.

Contention

While the sentiment overall was favorable, there may have been underlying concerns related to the automatic waiving of state obligations concerning the benefits of the self-directed subaccount. This provision could raise questions about the risks employees assume by self-managing their investments, including any violations that could arise under IRS regulations. The debate appears to focus on ensuring that participants are adequately informed about their responsibilities and the implications of the self-directed investment choices they make.