Louisiana House Bill HB46

Louisiana 2016 Regular Session

• Introduced: 1/29/16
• Refer: 1/29/16
• Refer: 3/14/16

Caption

(Constitutional Amendment) Requires new hires enrolled in state retirement systems to share certain retirement costs equally with their employer (OR NO IMPACT APV)

Impact

The implications of HB46 are primarily focused on state retirement systems, specifically impacting how contribution rates are determined for new employees. The expected outcome of the bill is to create a more equitable sharing of costs related to retirement benefits. Should the bill pass, it anticipates an increase in employer contribution rates, while employee rates would see a decrease. However, it is projected that these changes will have minimal financial impact during the initial five years post-enactment.

Summary

House Bill 46 (HB46) is a proposed constitutional amendment aimed at modifying the structure of retirement costs for new hires in the state retirement systems of Louisiana. Under this bill, state employees first hired on or after July 1, 2017, would be required to share the normal costs of retirement benefits equally with their employers. Furthermore, any unfunded accrued liability (UAL) associated with benefit improvements would also be evenly split between the employees and employers during the employee's active service. Notably, this bill does not pertain to cost-of-living adjustments (COLAs) granted to retirees.

Sentiment

The discussion surrounding HB46 expresses a mixed sentiment. Supporters argue that this amendment would ensure fairness by making employers and employees jointly responsible for retirement costs, thereby reducing future liabilities. Critics, however, may raise concerns about the implications for overall retirement security and the adequacy of benefits for new hires, particularly if employer contributions increase significantly. This debate reflects broader discussions on public retirement funding and equity in pension systems.

Contention

Notable points of contention include the concern that HB46 may set a precedent for how retirement liabilities are handled in the future. Opponents might argue that the sharing of costs could undermine the quality of retirement benefits, particularly for new employees entering the workforce under potentially less favorable financial conditions. The bill encourages a reevaluation of how compensation structures in public sector jobs are managed, highlighting the ongoing challenges related to public pension systems and their sustainability.