Regular Session News #2: Senate Retirement Committee to consider PBI funding bill Monday
Apr 14, 2023
Regular Session News 2: Senate Retirement Committee to consider PBI funding bill Monday
The Senate Retirement Committee is scheduled to meet at 1 p.m., Monday, April 17 (agenda). The committee will consider Senate Bill 18 (Sen. Price), which would establish a new model for providing permanent benefit increases (PBIs) to retirees and beneficiaries of the four state retirement systems for teachers, state employees, school employees, and state police.
The new model changes the funding mechanism, granting criteria, and eligibility criteria for future PBIs. SB 18 is co-authored by Senate President Page Cortez and supported by the TRSL Board of Trustees.
SB 18 would fund future PBIs directly through employer contributions to the retirement system. In other words, funding for PBIs would be built into the annual employer contribution rate and be referred to as the PBI account funding contribution rate (“AFC rate”). TRSL would then deposit the AFC rate into a new PBI funding account from which PBIs would be paid starting in FY 2024-25.
The AFC rate would equal one-half of any decrease in the total employer contribution rate each year, and would grow over time until it reached 2.5% of payroll. As safeguards for employers, SB 18 would prohibit the AFC rate from exceeding 2.5% of payroll and would establish caps for the total employer contribution rate.
The proposed model is projected to allow for a 2% PBI every two to three years, calculated on the first $60,000 of a retiree’s annual benefit. The legislature would retain the authority to grant PBIs.
Additionally, under provisions of SB 18, when the first PBI is paid from the new PBI funding account, eligibility criteria to receive a PBI would change—required age and years retired would increase as follows:
TRSL will keep you informed about the status of bills being monitored throughout the session. You can view all meeting schedules and agendas on the Louisiana State Legislature website. Visit the Legislation page of this website, to see all legislation impacting the retirement system.
Stay tuned for future updates.
The Senate Retirement Committee is scheduled to meet at 1 p.m., Monday, April 17 (agenda). The committee will consider Senate Bill 18 (Sen. Price), which would establish a new model for providing permanent benefit increases (PBIs) to retirees and beneficiaries of the four state retirement systems for teachers, state employees, school employees, and state police.
The new model changes the funding mechanism, granting criteria, and eligibility criteria for future PBIs. SB 18 is co-authored by Senate President Page Cortez and supported by the TRSL Board of Trustees.
SB 18 would fund future PBIs directly through employer contributions to the retirement system. In other words, funding for PBIs would be built into the annual employer contribution rate and be referred to as the PBI account funding contribution rate (“AFC rate”). TRSL would then deposit the AFC rate into a new PBI funding account from which PBIs would be paid starting in FY 2024-25.
The AFC rate would equal one-half of any decrease in the total employer contribution rate each year, and would grow over time until it reached 2.5% of payroll. As safeguards for employers, SB 18 would prohibit the AFC rate from exceeding 2.5% of payroll and would establish caps for the total employer contribution rate.
The proposed model is projected to allow for a 2% PBI every two to three years, calculated on the first $60,000 of a retiree’s annual benefit. The legislature would retain the authority to grant PBIs.
Additionally, under provisions of SB 18, when the first PBI is paid from the new PBI funding account, eligibility criteria to receive a PBI would change—required age and years retired would increase as follows:
- Regular retiree: Must have received a benefit for two years and be at least age 62;
- Disability retiree: Must have been retired at least two years regardless of age;
- Beneficiary of retired member: Retiree would have met the above criteria, if alive;
- Survivor of non-retired member: Must have received a benefit for at least two years and the benefits must have originated from the service of a deceased member who would have been age 62 at the time the PBI is payable.
TRSL will keep you informed about the status of bills being monitored throughout the session. You can view all meeting schedules and agendas on the Louisiana State Legislature website. Visit the Legislation page of this website, to see all legislation impacting the retirement system.
Stay tuned for future updates.