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2011 LEGISLATIVE SESSION

2011 LEGISLATIVE SESSION. Update on LASERS Issues prepared for the Government Finance Officers Association October 6, 2011. Maris E. LeBlanc Deputy Director mleblanc@lasersonline.org. What Didn’t Happen. Increase to Employee Contribution Rate HB 479, failed

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2011 LEGISLATIVE SESSION

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  1. 2011 LEGISLATIVE SESSION Update on LASERS Issues prepared for the Government Finance Officers Association October 6, 2011 Maris E. LeBlanc Deputy Director mleblanc@lasersonline.org

  2. 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

  3. Payments to the UALHB 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.

  4. Clean-up to Act 992HB 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

  5. Clean-up to Act 992, cont’dHB 571 (Act 368) effective 7/1/2011 • 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.

  6. 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

  7. Accrual Rate for LegislatorsHB 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.

  8. Air Time for EligibilitySB 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.

  9. 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.

  10. 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

  11. 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.

  12. 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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