The Louisiana Senate passed Senate Bill No. 21, the bill to provide a 1.5% Permanent Benefit Increase to eligible TRSL retirees and their beneficiaries, by a vote of 37 yeas and 0 nays, yesterday. During deliberations on Senate Bill No. 21, the Senate adopted an amendment, without any objection, that makes the implementation of the PBI on July 1, 2014 contingent upon the enactment of House Bill No. 1225 into law. The other three similar bills to provide PBIs to retired state employees, retired school employees and retired state troopers on July 1, 2014 were all amended to include the language about House Bill No. 1225. All four bills now move to the House of Representatives for further consideration. Their first stop will be the House Retirement Committee. A description of House Bill No. 1225 is provided below. House Bill No. 1225 by Representative Joel Robideaux This bill alters the current funding mechanism for the Experience Accounts held at the four state retirement systems. The bill also alters the payment mechanism and frequency of future PBIs. The bill requires that the state retirement systems increase amounts of excess investment income to payments on the outstanding debts of the retirement systems and restricts the creation of additional system liabilities by limiting the frequency of benefit increases to be provided from the Experience Accounts. Future allocations of excess investment income to the payment of retirement system debt will be indexed each year by the percentage increase in the actuarial value of the assets of the system. The proposed legislation allows for the funding of future PBIs in the following manner: A benefit increase funded by the account is limited to the lesser of the following: 1. The CPI-U for the twelve month period ending on the systems valuation date. 2. a. If the system is 85% funded or greater, 3%. 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%. 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%. 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%. e. If the system is less than 55% funded, no benefit increase shall be granted. No benefit increase may be granted in any year the retirement system is not at least 80% funded and the system does not meet it actuarially assumed rate of return of 8.0%. Benefit increases granted after July 1, 2015 shall be calculated on the first $60,000 of a retirees annual benefit. Eligible retirees will have to be age 60 and retired for at least one year before the increase is paid, and beneficiaries will be eligible for the increase if the deceased retiree would have met these eligibility requirements. A link to the article about the passage of the PBI legislation published in todays issue of The Advocate is provided here. theadvocate/home/8800639-125/senate-puts-conditions-on-retiree
Posted on: Thu, 03 Apr 2014 14:46:59 +0000
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