2008 Session Highlights
By: Lauren Bailey
2008 1st EXTRAORDINARY
The major legislative instruments of the 1st Extraordinary Session
in the public retirement arena generally focused on forfeiture of benefits upon
conviction of certain felonies and urging the U.S. Congress to reduce or
eliminate the Social Security reductions known as the Windfall Elimination
Provision and the Government Pension Offset.
FORFEITURE OF BENEFITS
Several bills were filed seeking to require forfeiture of public retirement
or pension benefits upon conviction of certain felonies. These bills include
Senate Bill 15, Senate Bill 16, and Senate Bill 17 by Senator Scalise and Senate
Bill 74 by Senator Riser as well as House Bill 19 by Representative
Champagne and House Bill 35 by Representative Henry, House Bill 46 by
Representative Ligi, and House Bill 48 by Representative Greene. However,
none of these bills was able to make it out of its house of origin.
WEP & GPO
Senate Concurrent Resolution 3 by Senator Alario (filed with the Sec of
State) and House Concurrent Resolution 7 by Representative Hoffman (filed
with the Sec of State), both sought to have the Congress of the United
States review and consider eliminating provisions of federal law which reduce
Social Security benefits for those receiving pension benefits from federal,
state, or local government retirement or pension systems, plans or funds.
These resolutions were specifically aimed at the two different offsets which
can reduce a public employee's Social Security benefits, called the Government
Pension Offset (GPO) and the Windfall Elimination Provision (WEP) which were
enacted by the federal government in the late 1970s and early 1980s.
2008 2nd EXTRAORDINARY
Two bills were filed during the 2nd Extraordinary Session which
sought to provide additional funding for the unfunded accrued liability (UAL) of
the public retirement systems. House Bill 46 by Representative Fannin (Act 7)
provides an additional twenty million dollars to accelerate payoff of the
UAL of the LASERS system and an additional forty million dollars to accelerate
payoff of the UAL of the Teachers' system. House Bill 36 by Representative
St. Germain (subject to call - pending House final passage) also
sought to provide supplemental appropriations for payments against the UAL.
However, it failed to make it through the entirety of the legislative process.
The major legislative instruments of the 2008 Regular Session in the public
retirement arena generally focused on granting of cost-of-living adjustments,
forfeiture and/or garnishment of benefits, providing a comprehensive benefit
plan for employees whose service involves hazardous duty, creating back-DROP
programs for certain systems and establishing options for investment of interest
in ceratin DROP accounts.
COST OF LIVING ADJUSTMENTS (COLAs)
For the second year in a row, the balance in the experience account of the
Teachers' Retirement System of Louisiana (Teachers') was sufficient to fund a
COLA for the retired teachers. For the third year in a row, the balance in the
Louisiana State Employees' Retirement System (LASERS') employee experience
account was sufficient to fund a cost-of-living adjustment (COLA).
The amount of a COLA paid from an experience account is statutorily limited
to the lesser of 3% or the consumer price index (CPI). For the 2007 calendar
year, the CPI was 4.1%. The experience account laws require legislative approval
through concurrent resolution before a COLA can be granted from the funds of the
Senate Concurrent Resolution 1 by Senator Butch Gautreaux (filed with the
Secretary of State) grants approval to the Teachers' board of trustees to
pay the 3% COLA. House Concurrent Resolution 2 by Representative Robideaux
(filed with the Secretary of State) grants similar approval to the LASERS
board. House Bill 1014 by Representative Morris (Act 113) allows the
Boards of Trustees of the Assessors' Retirement Fund, Municipal Employees'
Retirement System of Louisiana, and Municipal Police Employees' Retirement
System to authorize one permanent benefit increase (COLA) of up to 3%.
DIMINISHMENT OF BENEFITS
As in the 1st Extraordinary Session, several bills were filed which sought to
provide for forfeiture of public retirement benefits by certain persons upon
conviction of felony acts associated with their positions. These bills include
Senate Bills 310 and 639 by Senator Amedee, and House Bills 740, 1022
and 1263 by Representative Ligi, House Bills 783 and 1013 by
Representative Connick, and House Bill 1237 by Representative Robideaux.
Senate Bill 27 by Senator Butch Gautreaux (pending Senate Final passage)
sought to allow garnishment of public retirement benefits of elected officials
to pay fines or restitution imposed for a felony associated with his office. All
of these bills faced tough opposition from various interest groups as well as
the systems, and at the end of the day none of the bills was able to make it out
of its house of origin.
HAZARDOUS DUTY PLANS
House Bills 1084 by Representative Robideaux (pending in conference
committee) would have established the Hazardous Duty Service Plan which was
to be a comprehensive retirement plan for new employees hired on or after
January 1, 2009, within LASERS, whose service to the state required them to
carry weapons and routinely be put in harm's way. This plan would have provided
a single and consistent plan of benefits to recognize the dangerous and
unpredictable nature of their responsibilities, however the conferees were
unable to agree on the terms of the bill and in turn the bill died in conference
committee. House Bill 1077 by Representative Robideaux (Vetoed) would
have provided for transfers of service for members of existing hazardous duty
plans to the newly established Hazardous Duty Service Plan.
Senate Bill 120 by Senator Butch Gautreaux (Act 398) creates a
back-deferred retirement option program (Back-DROP) for members of the
Assessors' Retirement Fund. House Bill 1033 by Representative Geymann (Act
835) creates a back-deferred retirement option program (Back-DROP)
applicable to current and former DROP participants of the District Attorneys'
DROP INTEREST INVESTMENT OPTIONS
House Bill 89 by Representative Doerge (Act 714) allows members of
the Louisiana State Employees' Retirement System and the Teachers' Retirement
System of Louisiana who are DROP participants and began DROP on or after January
1, 2004, to participate in the Deferred Retirement Option Plan (DROP) and
irrevocably waive their constitutional rights protecting accrued benefits as it
relates to interest earned by their DROP account, so as to earn the system's
investment portfolio return rather than have the money invested in the money
market. A similar bill, House Bill 710 by Representative Green (Act 827)
allows certain members of Municipal Police Employees' Retirement System to
participate in the Deferred Retirement Option Plan (DROP) and irrevocably waive
their constitutional rights protecting accrued benefits as it relates to
interest earned by their DROP account, so as to earn the system's investment