LEGISLATIVE HISTORY

Countless pieces of legislation over the past seven decades have significantly impacted LASERS. In the early days, rules and regulations were put in place regarding eligibility for the retirement plan and benefit calculations. Over time, modifications were made and additional plans were added for LASERS members.

Currently, LASERS administers over 20 different retirement plans. In 1987, Louisiana became one of a handful of states to constitutionally require the actuarial soundness of its state retirement plans. This move was apparently prompted by the sizeable debt, (initial unfunded accrued liability or IUAL), the state incurred by failing, for forty years, to pay its necessary employer contributions to the systems. Thereafter, several legislative steps were taken to reduce employer costs and improve funding of the System. Of particular note, Louisiana was at the forefront of pension reform in adopting Act 75 of 2005. For new hires, the Act required increased employee contributions, delayed retirement eligibility, and an increase in the final average compensation calculation period from three to five years, among other things.

Pension reforms since 2010 have already resulted in over a half a billion dollars from additional investment earnings being applied to reduce the state’s debt, (unfunded accrued liability or UAL), to LASERS. An expected $3 billion is expected in cost savings for the System.

Senate Resolution 15

Commends the Louisiana State Employees’ Retirement System on the occasion of its 75th anniversary.

View the Resolution

CLICK ON A TAB TO VIEW INFORMATION FROM THAT DECADE.

1940s

1946

Act 126 created the Louisiana State Employees Retirement System, effective July 1, 1947.

Applied to officers and employees in State Service and their beneficiaries.
Retirement eligibility was 10 years of service at age 60.
Disability retirement was provided.
Four retirement options were established.
Average compensation was defined as the highest five consecutive years of earnings.
Employee contribution rate was 5%.
Service credit was allowed for service rendered prior to the creation of the System.
Military service credit was allowed.
The annuity upon retirement was based on the actuarial equivalent of accumulated contributions and an employer’s annuity of ¾ of 1% of average compensation for each year up to 35 years plus $150 and an employer’s annuity of 1.5% of average compensation of prior service up to 35 years.
Mandatory retirement was set at age 65. The member and his employer could apply for an extension for periods of one year up to age 70 if the continued employment would be advantageous to the State because of expert knowledge and qualifications. The Board had authority to grant the extension.
Investments were allowed in bonds and the Treasurer was custodian of the System funds.

1948

Act 20 added retirement eligibility of 30 years at age 55.

1950s

1960s

1970s

1970

Act 39 changed the definition of average compensation to the highest three years of successive employment.

1971

Act 165 changed retirement eligibility provisions to:

30 years at any age
25 years at age 55
10 years at age 60
15 years at age 60, if state service terminated before age 60

1972

Act 135 recognized “Laser & Co” as a shortened name for the system, and:

Set out rules for conversion of annual and sick leave to service credit.
Established survivor benefits for beneficiaries of members who died while in State Service.
Affirmed mandatory retirement age as 65, but allowed appointing authority (rather than Board of Trustees) to extend employment if superior skills and knowledge would make continued employment advantageous to the State.
Benefit accrual rate set as 2% of average compensation plus $300.
Established cost-of-living adjustments (COLAs).

1973

Act 4 established a 2.5 percent accrual rate for retirement benefits.

1975

Act 373 established 20 years at any age retirement eligibility for correctional officers, with an 8.5% employee contribution rate for those officers and an 8% employee contribution rate for wildlife agents.

Act 648 applied a 7% employee contribution rate for rank-and-file employees.

1976

Act 240 allowed purchase of service credit and imposed restrictions on rehired retirees.

Act 518 established the judicial retirement plan.

1978

Act 67 modified the 10 years at age 60 retirement eligibility so that it applied if the member was in or out of service.

Act 727 made disability retirement provisions uniform across state and statewide retirement systems.

1980s

1982

Act 190 changed final average compensation definition to the highest 36 months of consecutive employment.

Act 399 allowed pop-up to the maximum benefit if the beneficiary predeceased the member.

Act 642 provided that the earnings of a rehired retiree could not exceed 50 percent of their retirement benefit, subject to a cost of living adjustment.

1983

Act 22 allowed members to repay a refund of contributions.

1984

Act 867 established standards as to investments, such as the “prudent man” rule.

1985

Act 472 added the ability of a rehired retiree to repay benefits and regain membership in the System.

1986

Act 367 defined final average compensation using the highest 36 months of earnings and a 25 percent anti-spiking rule.

Act 414 provided the tenth of a year conversion table for unused annual and sick leave.

Act 608 added the sum of $300 per year to the retirement benefit of those persons who became members prior to July 1, 1986.

1987

*Act 947 resulted in a Constitutional Amendment requiring actuarial soundness of the System and that the unfunded accrued liability existing as of June 30, 1988 (IUAL) must be paid by the year 2029.

1988

*Act 81 increased the rank-and-file employee contribution rate from 7% to 7.5%.

1990s

1990

Act 14 created the Deferred Retirement Option Program, known as DROP.

Act 575 provided that the Legislature must determine if employees of newly created agencies are eligible for membership.

1991

Act 863 authorized the use of “LASERS” as a shortened name for the system.

1992

Act 572 created the Experience Account to fund cost-of-living adjustments (COLAs) with System investment earnings.

1995

Act 132 created a ten years of service retroactive eligibility for retirement as a method to avoid application of the Windfall Elimination Provision (WEP), a federal offset reducing Social Security benefits.

Acts 305 & 570 established a 20 year at any age actuarially reduced retirement.

Act 610 established additional options for rehired retirees.

Act 864 created special disability and survivor benefits for hazardous duty positions.

Act 1017 established a standard formula for granting COLAs.

Act 1110 created the Initial Benefit Option (IBO) and established a new DROP.

1996

Act 99 (First Extraordinary Session) resulted in a Constitutional Amendment that prohibited the participation of part-time officials, including legislators, in LASERS.

1999

Act 21 required that future retirees receive their benefits through electronic funds transfer, rather than paper checks, unless a hardship would result.

Act 1320 created the Optional Retirement Plan (a defined contribution plan) for certain unclassified employees. (The plan was closed to new employees as of December 7, 2007.)

2000s

2001

Act 1016 modified the COLA formula.

2003

Act 703 created a new retirement plan for Wildlife & Fisheries agents.

Act 818 created the self-directed plan for DROP.

2004

Acts 275 & 802 required that the operating budget of the System be submitted to the Joint Legislative Committee on the Budget for review and approval.

Act 340 allowed the purchase of up to five years of “air time” for retirement eligibility and/or computation of benefits.

Act 588 modified payments to the unfunded accrued liability and adjusted the funding of COLAs.

Act 923 allowed members of the Optional Retirement Plan to return to the defined benefit plan.

2005

*Act 75 created a new retirement plan for members hired after July 1, 2006. Characteristics of the plan for rank-and-file members included:

Increased employee contribution rates from 7.5% to 8%.
Final average compensation period increased from the highest 36 months to the highest 60 months of employment with a 15% anti-spiking rule.
Changed “air time” purchases so that only service credit for computation, not eligibility, could be purchased.
Changed retirement eligibility to 10 years at age 60.

2006

Act 835 created a retirement plan for peace officers employed by the Department of Public Safety and Corrections.

2007

Act 353 created a retirement plan for alcohol, tobacco, and control officers employed by the Department of Revenue.

*Act 484 resulted in the passage of a Constitutional Amendment requiring the legislature to identify a funding source for any change to retirement law having an actuarial cost.

2008

Act 714 amended provisions relative to the self-directed DROP accounts for members eligible to participate in DROP on or after January 1, 2004, requiring members to agree that the value of their DROP accounts could be reduced due to market losses.

2009

Act 270 allowed members to choose an actuarially reduced retirement benefit in order to self-fund a guaranteed COLA.

Act 299 provided enhanced benefits to certain probation and parole officers.

*Act 497 changed the amortization schedules for payment of the unfunded accrued liability and changed the methodology for funding COLAs.

2010s

2010

*Act 992 created three new retirement plans for members hired on or after January 1, 2011. New plans were for:

Elected judges,
Rank-and-file, and
Hazardous duty personnel.

Retirement eligibility was changed to:

5 years at age 60, or
20 years of service at any age, with an actuarially reduced benefit.

This eligibility was applied to all those hired on or after July 1, 2006.

The new judges’ plan is the same as the plan for rank-and-file members, with the addition of 1% to the accrual rate. Employee contributions for judges were increased to 13%. Court officers and other non-hazardous duty personnel were moved to the rank-and-file plan.

All hazardous duty positions were combined in a single plan for new hires and members with prior service in hazardous duty positions were allowed to transfer to the new plan. Employee contributions were set at 9.5% and the plan has a 3.33% accrual rate. Retirement eligibility was set at 12 years at age 55, 25 years at any age, or 20 years at any age, with an actuarially reduced benefit.

*Act 1048 resulted in a Constitutional Amendment which required a two-thirds vote of the Legislature to approve any retirement legislation with an actuarial cost.

2011

Act 322 reinstated the ability to purchase “air time” for retirement eligibility.

*Act 422 resulted in a Constitutional Amendment requiring certain non-recurring revenue to be applied to reduce the unfunded accrued liability.

2012

*Acts 479 & 868 resulted in a Constitutional Amendment which allowed forfeiture of retirement benefits for a felony conviction related to a member’s public position, to be applied to those hired on or after January 1, 2013.

Act 483 established a “Cash Balance Plan” for members hired on or after July 1, 2013. The Act was declared unconstitutional by the State Supreme Court in the case of Retired State Employees Association, et al. v State of Louisiana, No. 2013-CA-0499 (La. 6/28/13); 119 So.3d 568, since it was passed without the requisite two-thirds vote of the legislature.

Act 872 resulted in a Constitutional Amendment imposing certain prefiling deadlines for retirement legislation.

2014

*Act 226 established new rank-and-file and judicial retirement plans for members hired on or after July 1, 2015, with retirement eligibility being five years of service at age 62 or 20 years of service at any age with an actuarially reduced benefit.

Act 947 & 399 changed the methodology of funding COLAs.

*Act 571 changed the actuarial funding method from projected unit credit to entry age normal.

Act 648 transferred the administration of the Harbor Police Retirement Plan for the police officers at the Port of New Orleans to LASERS.

2015

*Act 56 appropriated about $2.7 million to be applied to the initial UAL of LASERS.

*Act 368 increased littering fines and distributed 50% of the fines to the retirement system of the law enforcement agency issuing the litter citation.

2016

Act 94 included noninvestment administrative expenses in calculating the employer contribution rate.

Act 95 reduced the amortization period for actuarial gains and losses from 30 years to 20 years once the system is 70% funded and provides for the reamortization of schedules of gains and losses for the 2019-2020 fiscal year and every fifth fiscal year thereafter.

Acts 639 & 679 resulted in a Constitutional Amendment which established the Revenue Stabilization Trust Fund, to be funded by certain mineral revenue and certain corporate franchise and income taxes. It may provide annual appropriations to pay the initial unfunded accrued liability.

2018

Act 59 appropriated $3,676,833 in surplus funds to LASERS to be applied to the IUAL.

2019

Act 50 appropriated $9,478,184 in surplus funds to LASERS to be applied to the UAL.

2020 - Present

2020

Act 255 appropriated $16,661,555 of surplus funds to LASERS to be applied to the Initial Unfunded Accrued Liability (IUAL), as is constitutionally required.

Act 213 provided for the executive budget to include the contributions to the state retirement systems for the Initial Unfunded Accrued Liability (IUAL) and for the itemization of the cost of the payment of the IUAL to be included in an appendix to the General Appropriation Bill.

2021

Act 120 appropriated an additional $8.4 million to LASERS to apply to the balance of the Unfunded Accrued Liability.

2022

Act 170 appropriated an additional $21.8 million to LASERS to apply to the balance of the Unfunded Accrued Liability.

2023

Act 397 appropriated $349 million in surplus funds to LASERS to be applied to the IUAL.

* Denotes pension reform legislation passed since 1987 to reduce employer costs and improve funding of the System.

LEGISLATIVE HISTORY

Senate Resolution 15

1946

1948

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