Provides for the payment of unfunded accrued liability by employers eliminating positions covered by the Municipal Employees' Retirement System of Louisiana (EN NO IMPACT APV)
Impact
The enactment of HB 33 has implications for state laws regarding retirement funding responsibilities. It seeks to ensure that municipalities that decide to privatize or alter employee coverage do not leave unfunded liabilities unaddressed. This policy framework encourages financial accountability for employers, ensuring that, despite changes in employment arrangements, the financial health of the retirement system is maintained. The actuarial assessment will provide a structured approach to determining these liabilities, promoting a consistent standard across participating employers.
Summary
House Bill 33 is focused on the Municipal Employees' Retirement System of Louisiana, specifically addressing the obligations of employers when they terminate participation agreements or privatize positions previously covered under the retirement system. The bill mandates that if an employer ends its coverage, they must pay the unfunded accrued liabilities associated with their participation up until the termination date. Similarly, if an employer eliminates positions by contracting out the work, they must remit unfunded liabilities related to those eliminated positions based on an actuarial calculation.
Sentiment
The sentiment around House Bill 33 appeared to be supportive, especially from stakeholders within the Municipal Employees' Retirement System who advocate for the protection of the system's funding integrity. The provisions designed to hold employers accountable were viewed positively, as they align with broader financial governance principles that seek to mitigate risks of underfunded pension liabilities. However, there may have been concerns raised regarding the potential financial implications for employers looking to privatize or restructure their workforce, as immediate payment or amortization of liabilities can present significant budgeting challenges.
Contention
While there seems to be general support for the bill, the core points of contention could revolve around the burden imposed on employers, especially smaller municipalities, who might struggle with the financial implications of sudden unfunded liability payments. The bill's requirement for a clear and predetermined financial obligation upon the termination or privatization of covered employee positions could lead to discussions about the feasibility for municipalities faced with fiscal pressures. Balancing the retirement system's solvency with the operational needs and constraints of local governments is a critical challenge stemming from this legislative change.
Provides for payment of unfunded accrued liability by an employer participating in the Municipal Police Employees' Retirement System (EN NO IMPACT APV)
Provides relative to payment of initial unfunded accrued liabilities to the Teachers' Retirement System of Louisiana by the Legislature of Louisiana (OR NO IMPACT APV)
Provides exceptions, in certain circumstances, to required employer payment of Louisiana School Employees' Retirement System unfunded accrued liability (OR NO IMPACT APV)
Provides for membership of certain new hires of the Lafayette City-Parish Consolidated Government in the Parochial Employees' Retirement System of Louisiana (EN NO IMPACT APV)
Requires employers who terminate participation in the Municipal Police Employees' Retirement System to pay the portion of the system's unfunded accrued liability attributable to the employer's participation in the system (EN NO IMPACT APV)
Provides for the Deferred Retirement Option Plan participation period for a member of the Municipal Employees' Retirement System of Louisiana (EN NO IMPACT APV)