On April 14, 2014, the Board of Trustees of LSERS met and took the following positions on the prefiled bills affecting LSERS that will be debated during the 2014 Regular Legislative Session:
SB 3 by Senator Guillory authorizes the superintendent of state police to levy a transaction assessment not to exceed 3 cents on each game authorized pursuant to the Louisiana Gaming Control Law. Specifies that the assessment shall cease on the June 30th following adoption by the Public Retirement Systems' Actuarial Committee of valuations for the four state systems determining the systems are at least 90% funded. Dedicates the proceeds of the authorized assessment to liquidating the unfunded accrued liabilities (80%) and to funding benefit increases for retirees (20%) of the four state retirement systems. Support.
SB 14 by Senator Guillory provides for all outstanding amortization bases of LSERS to be consolidated and reamortized over a 30-year period with level dollar payments. Support.
by Senator Guillory provides a permanent benefit increase of 1.5% to eligible retirees and beneficiaries of the system paid from available funds in the Experience Account.
Eligible retirees include:
Regular retirees who retired on or before 6/30/2013 and have attained the age of 60.
Disability retirees who retired on or before 6/30/2013 regardless of age.
Beneficiaries of retirees who would have met the applicable criteria to receive the increase if they had survived.
Non-retiree beneficiaries who began receiving benefits on or before 6/30/2013 and whose benefits are derived from service of deceased members who would have attained the age of 60. Support.
SB 22 by Senator Guillory dedicates 5% of revenue generated by taxes, fees, and assessments related to the legalization of marijuana to the four state retirement systems. Neutral.
SB 25 by Senator Guillory authorizes LSERS to recover overpayments paid during the 36-month period immediately preceding the date of notice of an administrative error is sent to the member, except in the case of fraud. In the case of fraud, the right to collect the overpayment extends to the full amount. Under current law there is no disability benefit for LSERS members whose first employment making them eligible for membership occurred between June 30, 3006 and June 30, 2010. This bill places these members in a situation similar to that of members whose membership in the system began on or after July 1, 2006, with eligibility after 10 years of service credit and a benefit equal to 3% of his average compensation multiplied by his years of service. Support.
SB 26 by Senator Guillory provides for the assessment of employer contributions to fund projected noninvestment related administrative expenses for each fiscal year as a component in the determination of the annual required employer contributions for each of the four state public retirement systems. Neutral.
SB 673 by Senator Guillory repeals provisions for the cash balance plan enacted by Act 483 of the 2012 Regular Session which was ruled unconstitutional by the Supreme Court.Support.
SCR 5 by Senator Guillory memorializes Congress to reduce or eliminate the reductions in federal law applicable to social security benefits, commonly referred to as the GPO and WEP, for those receiving public retirement system benefits.Support.
HB 26 by Rep. Sam Jones is a constitutional amendment requiring at least 2.5% of funds recognized as nonrecurring revenue be applied toward the payment of the balance of the oldest outstanding unfunded accrued liabilities of LSERS and STPOL in proportion to the balance of such UAL of each system. Upon complete liquidation of the oldest outstanding debt of the system, any remaining funds from an appropriation shall be applied to the next oldest outstanding debt of the system until all such funds are exhausted. Support.
HB 33 by Rep. Sam Jones grants a permanent benefit increase of 1.5% to all eligible retirees in accordance with statutory procedure. Support.
HB 35 by Rep. Sam Jones provides a supplemental benefit increase of an amount "to be determined" to those eligible for a permanent benefit increase. Neutral.
HB 38 by Rep. Pearson increases regular retirement age eligibility requirement to age 62 for new hires/members of the system hired after July 1, 2014. Support.
HB 42 by Rep. Pearson provides that the liabilities for the years 2001 through 2003 which are currently on increasing payment schedules be consolidated and applies the remaining funds in the LSERS experience account after the system grants a permanent benefit increase to eligible retirees and beneficiaries effective July 1, 2014, to the consolidated base and reamortizes these liabilities as level dollar payments over a period of 25 years. Neutral.
HB 63 by Rep. Leger revises terminology referring to persons with disabilities. Support.
HB 80 by Rep. Miller provides specific investment authority and restrictions relative to the asset allocation of the retirement systems. Opposed.
HB 86 by Rep. Ivey increases the threshold at which excess returns are credited to the system experience account from the actuarially assumed rate of return to an actuarial rate of 10%.
Provides for application of investment returns of the system that are in excess of the system's actuarially assumed rate of return and below 10% be applied to debts of the system.
HB88 by Rep. Barrow is a Constitutional Amendment which establishes the Seniors’ Supplemental Fund into which 10% of the nonrecurring revenues which remain after satisfaction of the constitutional requirements for the Bond Security and Redemption Fund shall be deposited. Requires appropriations from the fund when the fund balance reaches an amount sufficient to provide for a supplemental payment to the eligible retirees and beneficiaries of the state retirement systems. Neutral.
HB 89 by Rep. Miller identifies and subtracts "employer retirement costs" from the state funded portion charter schools are entitled to receive per pupil. Defines "employer retirement costs" as the cost per pupil of retirement expenses paid by the school district and includes the normal cost and unfunded accrued liability costs paid by the district to TRSL and LSERS, as well as costs paid by the district to cover health insurance and health care for retired teachers and school employees. Establishes a calculation for determining the "employer retirement cost" as applicable to each charter school and retirement system involved. The sum of the calculation is the amount subtracted from the state-funded portion of the charter school monies. Neutral.
HB 90 by Rep. Barrow is enabling legislation to implement the provisions of the Constitutional Amendment of HB 88. Requires occasional supplemental payments to eligible retirees and beneficiaries of the four state retirement systems and specifies that these benefits are not retirement benefits. Requires each state system to develop an estimate of the cost of providing a minimum of $300 annually to all eligible retirees and beneficiaries for consideration by the Public Retirement System Actuarial Committee. Neutral.
HB 1225 by Rep. Robideaux generally restricts certain excess investment earnings from being deposited into the Experience Account (EA).
Provides for a new schedule to determine when a COLA may be granted and the precentage cap of any such COLA.
Establishes a hurdle of $15 million which must be paid on the oldest outstanding debt of the system before any money can be directed into the EA. This hurdle is increased each year by the percentage increase in the system's actuarial value of assets for the preceding year.
After payment of the hurdle, an amount not to exceed 50% of the excess investment earnings may be credited to the EA based upon the system's funded level. Only enough excess investment earnings to fund one COLA may be credited to the EA in any year until the system is 85% funded. Once 85% funded the cap reverts back to two as in present law.
Provides that a benefit increase funded by the EA is limited to the lesser of:
(1) The CPI-U for the twelve month period ending on the system's valuation date.
(2) (a) If the system is 85% funded or greater, 3%.
(2) (b) If the system is at least 75% funded but less than 85% funded and the legislature has not granted a benefit increase in the preceding year, 2.5%.
(2) (c) If the system is at least 65% funded but less than 75% funded and the legislature has not granted a benefit increase in the preceding year, 2%.
- (2) (d) If the system is at least 55% funded but less than 65% funded and the legislature has not granted a benefit increase in the preceding year, 1.5%.
- (2) (e) If the system is less than 55% funded, no benefit increase shall be granted.
If the system does not attain its actuarial assumed rate of return the COAL is limited to 2% or the CPI-U.
Caps the amount of the retiree's benefit on which the COLA can be granted at $60,000.00, indexed to the CPI-U.
Clarifies that a COLA must be granted by legislative act which garners 2/3rds votes for passage.
Ties the effective dates of this legislation with the 1.5% COLA (SB19).
Neutral with the caveat of the author agreeing to proposed amendments.
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The description of the affect of legislation on LSERS and its members is subject to the interpretation by the Attorney General's Office, as well as the courts. Members should contact their own attorney and seek advice before relying on legislation affecting their membership.
Questions? Contact Lauren Bailey, Executive Counsel, at 225.925.6560 (email to email@example.com) or Carolyn N. Forbes, LSERS Assistant Director, at 225.925.6490 (email at firstname.lastname@example.org) or 1.800.256.3718 (if outside the Baton Rouge area).