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Session Information

2008 Session Highlights

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Retirement

 By: Lauren Bailey
  (225) 342-0599

2008 1st EXTRAORDINARY SESSION

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 SESSION

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.

2008 REGULAR SESSION

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 account.

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.

BACK-DROP PROGRAMS

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' Retirement System.

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 portfolio return.



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