|HR 21 by Rep. Lance Harris requests the state retirement systems to provide information to the legislature regarding permanent benefit increases for retirees.|
|SR 15 by Senator Ed Price urges and requests the state retirement systems to provide information to the legislature regarding permanent benefit increases for retirees.|
|HCR 9 by Rep. Mike Johnson memorializes Congress to support the Social Security Fairness Act.|
|SCR 34 by Senator Beth Mizell memorializes Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security benefit reductions.|
SCR 34 by Senator Beth Mizell memorializes Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security benefit reductions.
Act 90 by Representative Kevin Pearson made a minor correction to a statute related to the vesting period for LSERS members.
Act Bill 78 by Senator Gerald Long Provides clearer legal authority for LSERS to move DROP/IBRP LA (participated on or after 1/1/2004) funds during the investment period from a liquid money market to a Self-Directed Plan (SDP), to be managed by a third-party administrator.
Act 45 by Representative Kevin Pearson provides for state and statewide retirement systems with investments in international markets, requires the systems to allocate a part of their investments to a terror-free fund, rather than a terror-free INDEX fund.
Act 113 by Representative Paul Hollis changes the date used in the calculation of a retirement benefit increase to the end of the fiscal year preceding the payment of the benefit increase, instead of June 30 of the initial year of such an increase.
Act 225 by Senator Barrow Peacock retains present law and updates certain provisions related to creditable service in public retirement systems to comply with present federal law, including the Uniformed Services Employment and Reemployment Rights Act (USERRA); and also updates provisions of present law related to the time periods used to compute average compensation.
Act 397 by Senator Barrow Peacock restricts the use of actuaries’ services for Louisiana retirement systems to only performance of practice of actuarial science or ministerial duties, and prohibits exercise of supervision or discretionary control over the administration or management of a system.
Act 399 by Senator Barrow Peacock redefines PRSAC as the Legislature’s public pension advisor, and provides the chair shall rotate every two years between the House Speaker or his designee and Senate President or his designee.
Act 285 by Senator Peacock provides for correction of membership enrollment errors. The correction process must be started within 30 days of discovery. If the contribution amount transferred is insufficient, the employer must pay the deficiency.
Act 366 by Representative Pearson addresses legislative staff attending executive sessions of state and statewide retirement system board meetings. The final version contains a provision for election or appointments on or after July 1, 2017. A person who has been found in violation of the Code of Governmental Ethics in a matter involving the misuse of public funds shall be ineligible to serve as a retirement system trustee.
Senate Concurrent Resolution 22 by Senator Mizell requests to Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Governmental Pension Offset (GPO) Social Security benefit reductions.
Senate Resolution 123 by Senator Milkovich requests each retirement system to provide on its website the information that the system provides in its quarterly investment reports on performance and costs to the Legislature.
Act 319 removes the requirement to transfer certain ex-member’s balances to the Pension Accumulation Fund in the event the system does not receive a response from the notice of rights submitted to the member. Elimination of this practice will result in more accurate pricing of liabilities.
Act 320 removes the requirement that a member shall be an “active, contributing” member in order to be eligible to purchase service credit. The bill also removes the requirement of purchasing a minimum of 90 days of service.
Act 321 removes the word “systematic” relative to DROP disbursement requirements in order to allow the board to consider additional options to our retirees for withdrawing their funds.
We began this session with a large “Pension Reform” package filed by Rep. Ivey including resolutions and companion bills which would remove the guarantee of certain retirement benefits as well as establish hybrid benefit plans and tiered plans for new hires. The board voted to Oppose these bills and not one of them made it out of the House Committee on Retirement.
HCR 130 requests LSERS and Louisiana School Boards Association to jointly develop and implement an appeals process for audits of privatized positions.
ACT 23 sweeps the remaining balance from the experience account after payment of the 1.5% COLA and applies it to system debt.
ACT 103 provides a COLA of 1.5% to be paid from the experience account to eligible retirees and beneficiaries.
ACT 226 requires those individuals whose first employment made them eligible for membership in LSERS on or after July 1, 2015 a minimum requirement to start drawing a benefit at age 62 with 5 years of service.
ACT 399 (COLA Reform) provides for a new schedule to determine when a COLA may be granted and the percentage cap of any such COLA.
ACT 478 provides for the consolidation and reamortization of outstanding schedules.
ACT 680 provides for 36-month limit on collections as a result of administrative error and technical corrections.
ACT 365 allows transfers and reverse transfers of service credit between systems while in service as well as an opportunity for the member to purchase an upgrade to the higher accrual rate of the receiving system if applicable.
ACT 297 provides a COLA of 3.15% to be paid from the Experience Account to LSERS retirees who retired or entered DROP before July 1, 2001.
ACT 113 adds the Commissioner of Administration, or his designee, to the Board of Trustees for LSERS and other retirement systems. The Commissioner of Administration is appointed by the Governor.
ACT 224 authorizes the representatives of the Chairman of the House and Senate Retirement Committees to attend “executive sessions” of the Board of Trustees for Retirement Systems. The two Chairmen are ex-officio members of the Board of Trustees and generally send the attorneys for the committees to represent them at retirement board meetings. The attorneys do not vote and are not official designees of the chairmen, but this act will mandate that they be permitted to attend the executive sessions.
ACT 868 and ACT 479 amends the State Constitution to permit a judge to order forfeiture of retirement contributions made by the employer on behalf of an employee if that employee is convicted of a felony in connection with his public employment.
HB 38 requires a prospective employee to list all Louisiana public retirement systems from which he is receiving a benefit, the employing agency is required to notify the system that the member is a reemployed retiree. By this system the member will not be “over paid” and required to repay the retirement system. Vetoed
ACT 483 creates a “Cash Balance Plan” for members of a state retirement system hired after July 1, 2013. For members of LSERS whose first employment making them eligible for membership in the system occurs after July 1, 2013, MAY, within 60 days of employment, make an irrevocable decision to join the cash balance plan. The employee will contribute 8% of his salary, and receive a 4% credit from the employer which will be invested by the retirement system. The employee will get the actuarial interest earned by the system, less 1% for expenses, but the principal is protected and can never have a negative return. At age 60, or later, whatever is in the employee’s account can be annuitized to provide a lifetime retirement benefit for the member.
ACT 718 provides for additional required education for members of the Board of Trustees in the fields of Actuarial Science, Laws and Regulations, and Ethics and Fiduciary Responsibility.
ACT 354 by Representative Mickey Guillory amends LSERS benefits to comply with the HEART ACT(federal legislation dealing with members who are killed while in active duty in the military) and authorizes the Board to comply with future changes in the IRS code using the Administrative Procedures Act without Louisiana legislative act.
ACT 368 by Representative Robideaux eliminates discrepancies between employees hired between July 1, 2010 and December 31, 2010, and employees hired on or after January 1, 2011. All members hired after July 1, 2010, are subject to the same benefits.
HCR 135 by Representative Robideaux directs the four state retirement systems (LASERS, TRSL, LSPRS, and LSERS) to prepare recommendations and report to the House and Senate Committees on Retirement on the feasibility of merging their administration and investments. The report is to be submitted prior to the beginning of the next session of the legislature.
As required by the Constitution the Legislature completed its work for the 2007 Regular Session on June 28, 2007. Following are some of the Acts and Resolutions affecting1 the Louisiana School Employees’ Retirement System (LSERS):
ACT 232 by Rep. Jim Morris One Time Lump Sum COLA This Act, as amended by Rep. Schneider, allows the Board of Trustees to grant a “one-time, lump sum” cost-of-living adjustment (COLA) for retirees and beneficiaries payable from excess interest earnings. The COLA shall not exceed 3% of the member’s annual benefit and the minimum benefit paid shall be $300.00. The Board voted to grant this COLA assuming that actuarial earnings are sufficient. The actuarial report is due October 30, 2007. If earnings are sufficient retirees shall receive a one-time benefit with their December checks. To receive the COLA, the member must have retired by July 1, 2006.
ACT 213 by Sen. Cain and others. This Act, sponsored by the Louisiana School Boards Association, allows retired bus drivers to return to work as full time bus drivers and not be subject to the earnings limit ordinarily imposed on rehired retirees (R.S. 11:1006 imposes an earnings limit of one-half of the retiree’s final average compensation). Act 213 creates an exception for bus drivers who were retired on or before June 1, 2007. After being retired for at least 12 months a retiree who retired as a bus driver and returns to work as a bus driver in a “full-time position” is not subject to the 50% limit and may earn a full salary and receive full retirement benefits. The employer and employeepay contributions into the system, but the driver receives no additional benefits. When the driver terminates employment the system returns the contributions paid by the employee without interest. The employer must agree to pay any actuarial cost to the system as a result of hiring a retiree.
ACT 333 by Rep. Kennard and Sen. Nevers. This Act creates an experience account for the system. The system shall deposit one-half of excess earnings each year into the experience account. When the account has sufficient funds the Board may recommend to the Legislature that a COLA be granted to retirees. The COLA would be limited to 3% of the member’s annual benefit or the amount of the increase in the Consumer Price Index for the previous calendar year, whichever is less, and payable to retirees who are at least age 60 and who have been retired and receiving benefits for at least one year. The earliest a COLA could be granted from the experience account would be July 2009 and only if there are sufficient excess earnings.
ACT 352 by Rep. Schneider. This Act modifies the “Prudent Man Rule”, which is the standard of care that governs the investment decisions made by the Board and allows divestment of ownership in any company doing business in Iran, North Korea, Sudan, or Syria. If the Board decides not to divest then it is required to form “strategic alliances” with other public retirement systems to collectively urge companies to stop doing business in the offending nations. LSERS shall report its progress to the House and Senate Retirement Committees. Within 180 days the system must allocate a portion of its international investments to a “terror-free index fund”. This fund shall be created using money from public retirement systems and shall be screened and certified so that companies in the fund do not do business in or with offending nations.
ACT 367 by Sen. Ellington. This Act was originally a provision to allow out-of-state troopers to buy time in the State Police Retirement System, but was amended on the House floor by Rep. Arnold. The amendment extends to 2010 a program whereby LSERS must direct 10% of the commissions on certain domestic equity trades and 10% of commissions on certain fixed income trades to certain Louisiana broker-dealers. This is an economic development program to support Louisiana domiciled broker-dealers and LSERS must report its compliance with this requirement to the House and Senate Retirement Committees.
HR 127 by Rep. Schneider. This Resolution urges the retirement systems to disseminate to current and potential members regularly updated information that explains and apprises members of their rights and obligations under the various options for retirement. It also stresses the importance for members to know that some of their choices are irrevocable and have long-term consequences, some of which are not anticipated nor intended. The legislature is often faced with bills that would allow members to reverse irrevocable decisions concerning the Deferred Retirement Option Plan (DROP) and care should be taken by members before entering this program.
Act 9 allows the board to divest itself of any investment in a foreign corporation doing business with the following terrorist-sponsoring nations: Iran, Libya, North Korea, Sudan, and Syria. It is not a breach of fiduciary duty should the board divest itself of any companies doing business with these nations. A report is now being prepared to discover any such companies. Act 9 also requires that any financial consultant to the board disclose any business relationship that does business with the system. Segal Consultant, which is the financial consultant for LSERS, has no such conflicts.
Act 427 requires that 10% of all domestic equity trades and bond transactions be traded through Louisiana domiciled brokers. This act replaces the “pilot program” instituted by the legislature three years ago. That program required 10% of the trades go through brokers incorporated in Louisiana, AND 10% of the trades go through brokers doing business in the state. 2004 Louisiana Legislation Impacting LSERS.
Act 207 was filed to improve the standards under which the boards of trustees of the various public retirement systems conduct their business. Trustees are now required to receive more educational training prior to being allowed to vote or receive per diem for attendance at board meetings. Education is required in the fields of investments, actuarial science, fiduciary duty, ethics, and other legal issues affecting the systems.
Act 275 and Act 802 were designed to provide the legislature a closer view of the budgets of the public retirement systems. LSERS must now present its budget to the Joint Legislative Committee on the Budget for review and approval in October of each year.
House Bill No. 1215 was designed to prevent any suspect dealings involving the trustees or staffs of the public retirement systems. Those seeking contracts or other business relationships with public retirement systems must report expenditures on board members or retirement system staff to the board of ethics, or face penalties for failure to make such reports.
Act 588 restructures the amortization of the unfunded accrued liability for LSERS, LASERS, and TRSL. This change causes the gains and losses in the earnings on the investments to be amortized over a thirty-year period as opposed to the fifteen-year period that they had been amortized over in the past. This restructuring will affect the ability of LSERS to meet its target ratio. This ratio is the comparison between the funded level of the system and the remaining time prior to the date for the required full funding of the system. This directly affects the system’s ability to grant COLAs. Therefore, it could be several years before a COLA could again be granted.
Act 642 Restrict Conversion of Sick and Annual Leave – This Act provides that in order to convert unused sick or unused annual leave to retirement credit for use in calculation of retirement benefits, the amount converted must equal at least ten percent of a year.
Act 651 Restrict Re-enrollment by DROP Participant – This Act requires a DROP participant to re-enroll in LSERS after DROP participation ends only if the member is continuing employment for 30 days or more.
Act 764 Purchase of Out of State Service Credit – This Act authorizes the purchase of service credit as an “employee,” as defined in this system, for service in a public or private school, in state or out of state, by payment of the actuarial cost to this system, provided no service credit for this time period was held in any other retirement system. The system in which the service is claimed must certify the dates of employment and that the former member no longer maintains credit in the system.
Act 825 Purchase of Service – This Act allows members to purchase credit for service as an employee of the school board for which credit is not maintained in any other publicly supported retirement system. The member must have at least 90 days of eligible service as an employee to purchase, and must purchase at least 90 days of service credit in order to avail himself of the provision of the Act. The member must pay the actuarial cost of the service.
Act 897 of 2001
This act increased the accrual rate for computation of benefits for all members retiring on or after July 1, 2001. This change provides that all years of service earned on or after July 1, 2001 will accrue at 3 1/3% for each year. This change is also retroactive for all prior service credit earned by employees who were LSERS members on or before July 1, 2001 and had not retired or joined the DROP program before July, 2001.
For most members this act will increase the retirement benefits; however, if you already have enough years to give you a 100% accrual rate, this act will not increase your benefit.
For members who joined the DROP program before July 1, 2001 your DROP benefit will not be recalculated. However, if you retire on or after July 1, 2001 the service credit you earn after your DROP participation has ended will be calculated using the new accrual rate, limited to a 100% total accrual rate.
This act also increased the employee contribution rate from 6.35% to 7.5%.
Act 264 of 2001
Added an additional retiree to LSERS’ Board of Trustees, providing for staggered terms of the retiree members. The Board of Trustees will adopt rules and regulations on the terms of office and election process.
Act 266 of 2001
Renamed the Initial Benefit Option (Option 5) as the Initial Benefit Retirement Plan (IBRP). This clarifies this as a separate plan rather than a benefit option under a plan. IBRP is only available to members who meet eligibility for the Deferred Retirement Option Plan (DROP).
Act 307 of 2001
Clarified eligibility for disability retirement by providing that a member may not use credit for periods while earning workers’ compensation, while on extended leave, special leave, or advanced leave, in order to meet the five-year eligibility requirement for disability retirement.
Act 265 of 2001
Clarified reemployment limitations for Early Retirement. A person retiring under the early retirement provisions may not be reemployed by the agency from which they retired, LSERS, any public school system, or any special education district, for a period of five years from the date of retirement.