Regular Session News #19: 2016 Legislative Session - Week in review

In the House retirement committee, House Bill 62, sponsored by Rep. Barry Ivey, was voluntarily deferred by the author. HB 62 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. 

In other action of interest to TRSL members, the committee favorably reported House Concurrent Resolution 12, sponsored by Rep. A. B. Franklin. HCR 12 would ask Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security reductions. This resolution is pending passage by the full House.

 

Earlier this week, the House 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, summarized below, now go to the governor. 

• Senate Bill 2 (Peacock) authorizes payment of the 1.5% COLA and was contingent upon passage of Senate Bill 5 and Senate Bill 18.
• Senate Bill 5 (Peacock) 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 (Peacock) 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. 

 

On Monday, the full House passed Senate Bill 4 (Peacock), which gives the TRSL Board limited flexibility in determining its meeting schedule. SB 4 has been sent to the governor.

 

House Bill 13 (Pearson), which would allow TRSL members to purchase service credit for service as a teacher at an out-of-state nonpublic school, was reconsidered by the full House on Thursday, but it failed to receive the two-thirds vote necessary for passage.

 

Also, the House civil law and procedure committee favorably reported House Bill 603 (Leger), which 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. Both bills await House final passage.

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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.