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Regular Session News #22: Passage of PBI funding bill a highlight of 2023

Jun 9, 2023

The 2023 Regular Session, which began April 10 and ended yesterday, marked a big win for retirees and beneficiaries of the four state retirement systems for teachers, state employees, school employees, and state police. Landmark legislation that creates a new, more predictable model for funding future permanent benefit increases (PBIs) passed with overwhelming support.
 
Overall, four bills impacting TRSL received final legislative passage and are now awaiting the governor’s signature or a statewide vote in October. Here’s a look at what they do:
 
Permanent Benefit Increase (PBI) funding
Senate Bill 18 (Sen. Price and co-sponsored by Senate President Page Cortez) establishes a new model for providing PBIs to retirees and beneficiaries of TRSL, LASERS, LSERS, and LSPRS.
 
Future PBIs will be funded directly through TRSL-participating employer contributions, starting in 2024. The portion of employer contributions earmarked for PBIs will be deposited into a new PBI funding account. Those deposits will equal one-half of the decrease in the total employer contribution rate, growing over time until PBI deposits reach, but do not exceed, 2.5% of payroll. 
 
PBIs will be limited to 2% of the first $60,000 of the retirement benefit. When the first PBI is paid from the new PBI funding account, the eligibility criteria to receive a PBI will change as follows:
 
  • Regular retiree: Must have been receiving a benefit for two years and be at least age 62;
  • Disability retiree: Must have been receiving a benefit for 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 been receiving 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.
 
More information about SB 18 is available on our Protecting Purchasing Power webpage.
 
Payments toward UAL
Act 107 [House Bill 47] (Rep. Nelson), a proposed constitutional amendment, requires a minimum of 25% of nonrecurring state revenue to be appropriated to the unfunded accrued liabilities (UALs) of the four state retirement systems for teachers, state employees, school employees, and state police, beginning FY 2024-25. Act 107 will become effective if a majority of voters supports the amendment in a statewide election on October 14, 2023.
 
House Bill 560 (Rep. Zeringue) makes a supplemental appropriation of $49.3 million to the TRSL initial unfunded accrued liability (IUAL) from a portion of the FY 2021-22 surplus funds in the state treasury. An additional $1.4 million from the Unfunded Accrued Liability Fund was also appropriated to TRSL’s IUAL through HB 560.
 
Public meetings
Senate Bill 201 (Sen. Hewitt) requires the adoption of rules and procedures by certain public bodies to allow for the electronic participation in meetings (or for alternative access) to members of the public with a disability recognized by the Americans with Disabilities Act or a designated caregiver, if requested. SB 201 also requires rules and procedures to be adopted that would allow a member of the public body to participate in meetings and vote electronically. Additionally, it allows certain public bodies to conduct a limited number of public meetings via electronic means.
 
Four resolutions were also passed by the Legislature and enrolled with the Secretary of State:
 
Social Security offsets
House Concurrent Resolution 67 (Rep. M. Johnson) urges and requests Congress to review the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) Social Security benefit reductions and to eliminate or reduce them by supporting H.R. 82 and S. 597 of the 118th Congress and all similar legislation.
 
NOTE: Changes to Social Security offsets must come at the federal level. For more information about current federal legislation related to WEP and GPO, contact your U.S. representative and/or senator.
 
House Concurrent Resolution 69 (Rep. M. Johnson) requests the House and Senate Retirement Committees study and make recommendations regarding benefit options for future state employees to avoid penalties associated with the GPO and WEP Social Security benefit reductions. TRSL will be asked to provide information for the study.
 
Environment, Social, and Governance (ESG)
House Concurrent Resolution 70 (Rep. Beaullieu) requests the State Treasurer and the directors of the state and statewide retirement systems report on investments, investment funds, investment advisors, and other companies used by the treasurer or systems that meet certain criteria.
 
House Concurrent Resolution 110 (Rep. Miguez) urges and requests state and statewide retirement systems to avoid the influence of environmental, social, and governance policies when making investment decisions. 

 
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