Provides for actuarial determinations and application of funds. (6/30/16)
Impact
If enacted, SB20 will have significant implications for the state’s retirement systems by tightening regulations on how funds can be handled, specifically with respect to employer contributions and retirement benefits. The bill aims to ensure the systems can meet their liabilities while adhering to actuarial standards. It introduces a more stringent oversight on the allocation of excess returns from investments, which will directly affect how quickly retirement benefits can be improved or distributed among beneficiaries.
Summary
Senate Bill 20, introduced by Senator Peacock, seeks to provide for actuarial determinations and the application of funds within Louisiana's retirement systems. The bill outlines adjustments to the way excess returns on investment earnings are allocated and stresses the maintenance of a balance in the experience account. It sets forth protocols for prioritizing allocations to ensure that the systems remain adequately funded without permitting benefit improvements unless certain preconditions are met.
Sentiment
Discussions surrounding SB 20 reveal a generally positive sentiment among proponents who believe the bill will enhance the financial stability of the retirement systems. Supporters argue that by clearly outlining conditions under which benefits can be adjusted, the bill helps ensure that systems remain solvent and trustworthy. However, there is criticism from some factions who view the restrictions on benefit enhancements as overly cautious, potentially hindering necessary increases in retirement benefits for retirees.
Contention
Notable points of contention include debates on the limitations imposed by the bill concerning when and how benefits can be increased. Opponents argue that strict adherence to funding ratios and actuarial advisories may prevent timely assistance for retirees facing rising living costs. The complexity of the bill's stipulations regarding investment returns also raises concerns about the transparency and accessibility of information regarding beneficiaries' rights and the health of their retirement accounts, making it a contentious topic in legislative discussions.
Provides for application of a portion of state retirement system investment returns to system debt and increases the threshold that must be met prior to funding state retirement system experience accounts (OR DECREASE APV)
Provides for benefit increases for retirees, beneficiaries, and survivors of state retirement systems and the funding therefor. (2/3-CA10s(29)(F)) (gov sig) (EN INCREASE FC SG RE)