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Regular Session News #18: House passes trio of bills necessary for July 1 COLA

Apr 1, 2016

The House yesterday unanimously passed three Senate bills that, taken together, allow payment of a 1.5% permanent benefit increase (also known as a COLA), on the first $60,000 of the retirement benefit to eligible TRSL retirees and beneficiaries on July 1. All three bills are sponsored by Sen. Barrow Peacock, chair of the Senate retirement committee. They are as follows:
  • Senate Bill 2 authorizes payment of the 1.5% COLA and was contingent upon passage of Senate Bill 5 and Senate Bill 18.
  • Senate Bill 5 requires non‐investment related administrative expenses to be funded directly through employer contributions beginning the first fiscal year in which this change will not increase the projected employer contribution rate.
  • Senate Bill 18 clarifies provisions created in Act 399 of 2014 regarding excess investment earnings, employer contributions, and cost-of-living adjustments (COLAs). SB 18 also addresses the System’s amortization period for changes, gains, losses and allocations to the experience account, and authorizes reamortization at certain times.
SB 2 and SB 18, having been amended in the House, must now go back to the Senate for concurrence. SB 5 now goes to the Senate president and House speaker for signatures and then to the governor.

The House also passed Senate Bill 4 (Peacock) which gives the TRSL Board limited flexibility in determining its meeting schedule.

Also yesterday: The House civil law committee favorably reported House Bill 603 (Leger). The legislation proposes that a constitutional amendment be placed before voters on the November ballot to establish the Revenue Stabilization Trust Fund and to provide for the allocation of mineral revenues.
A portion of the mineral revenues allocated in the proposed constitutional amendment would be dedicated to the unfunded accrued liability (UAL) after certain thresholds are reached. House Bill 696 (Leger) is companion legislation to HB 603.

Upcoming meeting 
The House retirement committee is scheduled to meet at 9 a.m., Thursday, May 12. One bill and a House concurrent resolution impacting TRSL and its members are on the agenda for consideration. 

HB 62 (Ivey) would set a minimum employer contribution rate of 20% of payroll for any state retirement system that is less than 100% funded, or if the system was 100% funded but later dropped below 90%; it would also create an account for each system into which excess employer contributions would be deposited under certain conditions for the purpose of reducing the unfunded accrued liability (UAL) or paying employer contributions.

HCR 12 (Franklin) memorializes Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security reductions. 

A complete list of legislation impacting TRSL, including the position taken by the TRSL Board of Trustees on each bill, is available on the Legislation page of our website.
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