Transcript GFOA Lasers 2011 - Louisiana Government Finance Officers

2011 LEGISLATIVE SESSION
Update on LASERS Issues
prepared for the
Government Finance Officers Association
October 6, 2011
Maris E. LeBlanc
Deputy Director
[email protected]
What Didn’t Happen
• Increase to Employee Contribution Rate
HB 479, failed
• New Tier of Retirement Benefits
SB 12, pulled by Senator Gautreaux
• Changes to Final Average Compensation and
increased employee contribution
HB 530, failed
• Retroactive & Future Benefits for Probation &
Parole Officers
HB 478, vetoed
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Payments to the UAL
HB 384 (Act 422) & HB 435 (Act 357)
Constitutional Amendment #2 on the October
22 ballot, if passed, will require that a minimum of
nonrecurring revenue be applied toward reducing
the balance of the unfunded accrued liability (UAL)
of the LASERS and TRSL retirement systems.
For fiscal years 13-14 and 14-15, a minimum of 5%
should be applied, with a minimum of 10% applied
for future years.
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Clean-up to Act 992
HB 571 (Act 368) effective 7/1/2011
Makes changes to Act 992 of the 2010 Regular
Session, including these requested by LASERS:
• Clarifies that survivor benefits for handicapped or
mentally disabled children do not cease when the
child reaches 18
• Provides that a person who has participated in
DROP or is a rehired retiree under Option 1 or 3
from another LASERS plan is not eligible for the
HAZ PLAN
• Provides that a HAZ PLAN member who does not
meet eligibility under that plan may retire with 5
years at age 60 with rank-and-file benefits at the
2.5% accrual rate
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Clean-up to Act 992,
HB 571 (Act 368) effective 7/1/2011
cont’d
• Provides that HAZ PLAN members may retire with
an IBO and select the self-funded COLA
• Provides that a member who joins the HAZ PLAN
but does not transfer prior service must pay any
actuarial cost resulting to the system
• Clarifies that an employee who was in a hazardous
duty service plan prior to 12/31/2010, who earns
service in a hazardous duty position after
1/1/2011 may consider the service earned as
covered by that plan
Clarifies that a member with a 60 month FAC must
work 60 months after DROP to earn a new FAC for
post-DROP supplement.
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Purchase of Federal Time
HB 404 (Act 355), effective 7/1/2011
A LASERS member who was a contributing
member of a retirement plan for federal
employees may purchase that service credit.
• Must have at least 1 year in LASERS
• Must pay greater of actuarial cost or
employee/employer contributions +
interest in a lump sum
• Must forfeit federal service
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Accrual Rate for Legislators
HB 377 (Act 377), effective 6/30/2011
• Any legislator who is eligible for LASERS
who is elected after July 1, 2011, will
receive a 2% accrual rate for service
earned after that date.
• Change will not apply to anyone serving in
the legislature on June 30, 2011.
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Air Time for Eligibility
SB 9 (Act 322), effective 7/1/2011
• Members of LASERS with at least 5 years
of service credit may purchase up to 5
years, in one year increments
• Members who previously purchased credit
for computation purposes may pay to
upgrade that credit for eligibility
• Five years is the total amount of air time
which may be purchased
• Sample calculations are posted on the
LASERS website.
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Impact of Air Time on OGB
Premium
• A member who uses air time to retire
earlier than he would otherwise be eligible
must pay any resulting increase in
employer’s health insurance premium
• A member eligible* for 20 year actuarially
reduced retirement who has actually
worked 20 years is not retiring early and
would have no premium increase
• Rate schedules for increase are posted at
www.groupbenefits.org
*Officers in the Corrections Secondary Plan & Certain Wildlife &
Fisheries Agents are not eligible for 20 year retirement.
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Air Time Actuarial Calculations
For each type of “Air Time” purchase,
members must submit an actuary fee of
$150.00 payable to LASERS
• For Benefit Computation Purposes Only,
actuary will provide cost to purchase 1, 2, 3,
4, and 5 years for $150.00
• For Benefit Computation and Retirement
Eligibility, actuary will provide two costs for
$150.00
• For Upgrade of Air Time service originally
purchased for Benefit Computation Only, the
actuary will provide two costs for $150.00
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Resolutions of Interest
• HR 80 (Pearson) Requires House bills and joint
resolutions relative to retirement to be prefiled
not later than 5:00 p.m. on the 45th calendar day
prior to the first day of the regular session.
• HR 149 (Montoucet) Directs the state and
statewide retirement systems to study the nature
of irrevocable decisions and to provide the
legislature with solutions for allowing members
and retirees to revoke certain elections under
certain circumstances.
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Resolutions of Interest, cont’d
• HCR 135 (Robideaux) Four state retirement
systems are directed to report to the House and
Senate Committees on Retirement and the
Division of Administration, prior to the convening
of the 2012 Regular Session of the Legislature,
the administrative and investment costs incurred
by each system and to jointly submit a report on
the feasibility of combining the administrative
and investment.
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