2006 Louisiana Laws - RS 11:883.1 — Employee experience account

§883.1.  Employee Experience Account

A.(1)  Effective July 1, 2004, the balance in the Employee Experience Account shall be zero.

(2)  The Employee Experience Account shall be credited as follows:

(a)  To the extent permitted by Paragraph (3) of this Subsection, an amount not to exceed fifty percent of the prior year's net investment experience gain as determined by the system's actuary.

(b)  To the extent permitted by Paragraph (3) of this Subsection, an amount not to exceed that portion of the system's net investment income attributable to the balance in the Employee Experience Account during the prior year.

(3)  In no event shall the amount in the Employee Experience Account exceed the reserve necessary to grant two cost-of-living adjustments as provided in Subsection C of this Section.

B.  The Employee Experience Account shall be debited as follows:

(1)  An amount equal to that portion of the system's net investment loss attributable to the balance in the Employee Experience Account during the prior year.

(2)  An amount sufficient to fund a cost-of-living adjustment granted pursuant to Subsection C of this Section.

(3)  In no event shall the amount in the Employee Experience Account fall below zero.

C.(1)  In accordance with the provisions of this Section, the board of trustees may recommend to the president of the Senate and the speaker of the House of Representatives that the system be permitted to grant a cost-of-living increase to retirees and beneficiaries whenever the balance in the Employee Experience Account is sufficient to fund such benefit fully on an actuarial basis, as determined by the system's actuary.  If the legislative actuary disagrees with the determination of the system's actuary, a cost-of-living increase shall not be granted.  The board of trustees shall not grant a cost-of-living increase unless such cost-of-living increase has been approved by the legislature by concurrent resolution adopted by a favorable vote of a majority of the elected members of each house.  Any increase granted shall begin on the July first following legislative approval, shall be payable annually, and shall equal an amount not to exceed the lesser of:

(a)  Three percent.

(b)  An amount as determined in Paragraph (2) of this Subsection.

(2)  If the increase in the consumer price index, U.S. city average for all urban consumers (CPI-U), as prepared by the U.S. Department of Labor, Bureau of Labor Statistics, for the calendar year immediately preceding the cost-of-living increase is less than three percent, then the cost-of-living increase shall be a sum equal to the CPI-U increase for that prior calendar year, if any.

(3)  The percentage of each recipient's cost-of-living increase shall be based on the benefit being paid to the recipient on the effective date of the increase.

(4)(a)  Except as provided in Subparagraph (c) of this Paragraph, in order to be eligible for the cost-of-living increase, there must be the funds available in the respective experience account to pay for such an increase, and a retiree:

(i)  Shall have received a benefit for at least one year; and

(ii)  Shall have attained at least age fifty-five.

(b)  Except as provided in Subparagraph (c) of this Paragraph, a nonretiree beneficiary will be eligible for the cost-of-living increase:

(i)  If benefits had been paid to the retiree or the beneficiary, or both combined, for at least one year; and

(ii)  In no event before the retiree would have attained age fifty-five.

(c)(i)  The provisions of Items (a)(ii) and (b)(ii) of this Paragraph shall not apply to any person who receives disability benefits from this system, or who receives benefits based on the death of a disability retiree of this system.

(ii)  The actuarial cost of implementing the provisions of Acts 2001, No. 1162, shall be paid by debiting the employee experience account which must have the funds available in the respective experience account to pay for such an increase.

(5)(a)  On December 1, 2001, the board of trustees shall grant a one-time cost-of-living adjustment to:

(i)  Each retiree who had twenty-five years of service credit, exclusive of unused leave, or a disability retiree regardless of the number of years of service credit, and had been receiving a benefit for at least fifteen years on December 1, 2001; and

(ii)  Each nonretiree beneficiary receiving a benefit on December 1, 2001, if the deceased member had twenty-five years of service credit exclusive of unused leave, or was a disability retiree regardless of the number of years of service credit, and the retiree and nonretiree beneficiary, or both combined, had received a benefit for at least fifteen years.

(b)  The one-time adjustment payable to each recipient shall equal an amount up to but not exceeding two hundred dollars a month, but the total monthly benefit of any such recipient resulting from this adjustment shall not exceed one thousand dollars.

D.(1)  The authority to credit and debit the employee experience account as set forth in Subsections A and B of this Section shall permanently terminate at the end of any fiscal year in which the accumulated balance of assets held in the employee experience account equals or exceeds the total reserve required to permanently fund the cost-of-living increase described in Subsection C of this Section, as determined by the Louisiana Public Retirement Systems' Actuarial Committee, and the cost-of-living increase described in Subsection C of this Section shall be paid annually thereafter.

(2)  The asset reserve that is required to permanently fund the cost-of-living increase described in Subsection C of this Section shall be an amount equal to the present value of future normal costs, plus the increase in the accrued liability resulting from all prospective benefits covered in Subsection C of this Section for all current members, retirees and nonretiree beneficiaries of the retirement system.

E.  The first normal cost-of-living increase shall be effective July 1, 1999.

F.(1)(a)  Notwithstanding any other provisions of this Section to the contrary, any cost-of-living increase shall be calculated only on the first seventy thousand dollars of the retiree's retirement benefit.

(b)  The seventy-thousand dollar limit provided for in Subparagraph (a) of this Paragraph shall be increased each year in an amount equal to any increase in the consumer price index, U.S. city average for all urban consumers (CPI-U) for the preceding year, if any.

(2)  The cost-of-living increase which is authorized by Subsection C of this Section shall be limited to the lesser of either two percent or an amount as determined in Paragraph (C)(2) of this Section in or for any year in which the system does not earn at least eight and one-quarter percent interest on the investment of the system's assets.

Acts 1992, No. 1031, §1, eff. July 1, 1992; Acts 1999, No. 402, §1, eff. July 1, 1999; Acts 2001, No. 1162, §1, eff. July 1, 2001; Acts 2001, No. 1172, §1, eff. July 1, 2001, and July 1, 2002, for Subparagraph (C)(1)(a); Acts 2004, No. 588, §1, eff. June 30, 2004.

NOTE:  See Acts 2001, No. 1172, §4 relative to effective date.

NOTE:  See Acts 2001, No. 1172, §2 (2nd) relative to funding and accountability and see Acts 2001, No. 1172, §3 relative to nonseverability.

NOTE:  See Acts 2004, No. 588, §2, relative to balances in the Employee Experience Accou t of the Teachers' Retirement System of La. on June 30, 2004.