2014 Louisiana Laws
Revised Statutes
TITLE 11 - Consolidated Public Retirement
RS 11:1332 - Employee Experience Account

§1332. Employee Experience Account

A.(1) The Employee Experience Account shall be credited as follows:

(a) To the extent permitted by Paragraph (2) of this Subsection and after the allocation as provided in R.S. 11:102(B)(3)(d)(viii)(bb), 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 (2) 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.

(2)(a) In no event shall a credit be made to the account that would cause the balance in the Employee Experience Account to exceed the reserve necessary to grant:

(i) Two cost-of-living adjustments determined pursuant to Subsection C of this Section if the system is eighty percent funded or greater.

(ii) One permanent benefit increase as determined pursuant to Subsection C of this Section if the system is less than eighty percent funded.

(b) If the system is less than eighty percent funded and has reserves in excess of the amounts provided for in Item (a)(ii) of this Paragraph, it shall not apply credits to the account pursuant to Subparagraph (1)(b) of this Subsection.

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 or F 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 adjustment to retirees and beneficiaries whenever the conditions in this Section are satisfied and the balance in the Employee Experience Account is sufficient to fully fund such benefit 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 adjustment shall not be granted. The board of trustees shall not grant a cost-of-living adjustment unless such cost-of-living adjustment has been approved by the legislature. Any such cost-of-living adjustment granted on or before June 30, 2015, shall be limited to and shall only be payable based on an amount not to exceed eighty-five thousand dollars of the retiree's annual benefit. Any such cost-of-living adjustment granted on or after July 1, 2015, shall be limited to and shall only be payable based on an amount not to exceed sixty thousand dollars of the retiree's annual benefit. Effective for years after July 1, 2007, and on or before June 30, 2015, the eighty-five thousand dollar limit shall be increased each year in an amount equal to the increase in the consumer price index (United States city average for all urban consumers (CPI-U)), as prepared by the United States Department of Labor, Bureau of Labor Statistics, for the preceding calendar year, if any. Effective on or after July 1, 2015, the sixty-thousand dollar limit 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 twelve-month period ending on the system's valuation date, if any. Any adjustment granted pursuant to the provisions of this Section shall begin on July first following legislative approval, shall be payable annually, and shall be an amount equal to the lesser of:

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

(b) The increase in the consumer price index (United States city average for all urban consumers (CPI-U)), as prepared by the United States Department of Labor, Bureau of Labor Statistics, for the twelve-month period ending on the system's valuation date, if any. If the balance in the experience account is not sufficient to fund that sum, no increase shall be granted.

(2)(a) If the system is eighty percent funded or greater, three percent.

(b) If the system is at least seventy-five percent funded but less than eighty percent funded and the legislature has not granted a benefit increase in the preceding fiscal year, two and one-half percent.

(c) If the system is at least sixty-five percent funded but less than seventy-five percent funded and the legislature has not granted a benefit increase in the preceding fiscal year, two percent.

(d) If the system is at least fifty-five percent funded but less than sixty-five percent funded and the legislature has not granted a benefit increase in the preceding fiscal year, one and one-half percent.

(e) If the system is less than fifty-five percent funded or if the system is less than eighty-five percent funded but more than fifty-five percent funded and the legislature granted a benefit increase in the preceding fiscal year, no increase shall be granted.

(3) Subject to the limitations contained in Paragraph (1) of this Subsection, the percentage of each recipient's cost-of-living adjustment 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 adjustment, there shall be the funds available in the experience account to pay for such an adjustment, and a retiree:

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

(ii) Shall have attained at least age sixty.

(b) Except as provided in Subparagraph (c) of this Paragraph, a non-retiree beneficiary shall be eligible for the cost-of-living adjustment:

(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 sixty.

(c) 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.

D. 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 determined as provided in Subsection C of this Section in or for any year in which the system does not earn an actuarial rate of return of at least seven percent interest on the investment of the system's assets.

E. Effective July 1, 2007, the balance in the Employee Experience Account shall be zero.

F. In addition to the cost-of-living adjustment authorized by Subsection C of this Section, the board of trustees may grant a supplemental cost-of-living adjustment to all retirees and beneficiaries who are at least age sixty-five, which shall consist of an amount equal to two percent of the benefit being received on the date of the adjustment. In order to grant such supplemental cost-of-living adjustment, the board of trustees shall recommend to the president of the Senate and the speaker of the House of Representatives that the system be permitted to grant such supplemental cost-of-living adjustment to retirees and beneficiaries whenever the balance in the Employee Experience Account is sufficient to fully fund such benefit on an actuarial basis, as determined by the system's actuary. If the legislative actuary disagrees with the determination of the system's actuary, such supplemental cost-of-living adjustment shall not be granted. The board of trustees shall not grant such supplemental cost-of-living adjustment unless such supplemental cost-of-living adjustment has been approved by the legislature. Any such supplemental cost-of-living adjustment paid on or before June 30, 2015, shall be limited to and shall only be payable based on an amount not to exceed eighty-five thousand dollars of the retiree's annual benefit. Any such supplemental cost-of-living adjustment paid on or after July 1, 2015, shall be limited to and shall only be payable based on an amount not to exceed sixty thousand dollars of the retiree's annual benefit. Effective on and after July 1, 2007, and on or before June 30, 2015, the eighty-five thousand dollar limit shall be increased each year in an amount equal to the increase in the consumer price index (United States city average for all urban consumers (CPI-U)), as prepared by the United States Department of Labor, Bureau of Labor Statistics, for the preceding calendar year, if any. Effective on and after July 1, 2015, the sixty-thousand dollar limit shall be increased each year in an amount equal to the increase in the consumer price index (United States city average for all urban consumers (CPI-U)), as prepared by the United States Department of Labor, Bureau of Labor Statistics, for the twelve-month period ending on the system's valuation date, if any. Any cost-of-living adjustment granted pursuant to the provisions of this Subsection shall begin on July first following legislative approval and shall be payable annually.

G.(1) Notwithstanding any provision of this Section to the contrary, in a year in which the experience account balance is insufficient to fund the amount required pursuant to Paragraph (C)(1) of this Section, the board may make the recommendation provided in Paragraph (C)(1) of this Section if all of the following conditions are satisfied:

(a) No benefit increase was granted in the preceding fiscal year.

(b) The experience account balance established in the system valuation for the preceding fiscal year reached its maximum reserve permitted pursuant to Paragraph (A)(3) of this Section applicable to the system valuation for that valuation year.

(c) The experience account balance established in the system valuation for the current fiscal year is insufficient to fund the maximum increase permitted pursuant to Paragraph (C)(2) of this Section applicable to the system valuation for the preceding fiscal year.

(d) All of the insufficiency in the account is attributable to the following:

(i) The growth of the cost of the increase, but only if that growth was produced solely by either or both of these events:

(aa) Changes in the pool of the eligible recipients.

(bb) The growth in the benefit amount to which the increase applies due to the application of the CPI-U pursuant to the provisions of Paragraph (C)(1) of this Section.

(ii) Credits to the account, if any, are insufficient to cover the growth in the cost of the increase.

(2) The amount of the increase shall be equal to the amount the balance in the experience account will fully fund rounded to the nearest lower one-tenth of one percent.

Acts 2007, No. 333, §1, eff. July 1, 2007; Acts 2014, No. 399, §1, eff. June 30, 2014.

NOTE: Acts 2014, No. 101, eff. 6/30/14 granted a PBI in accordance with the provisions of this Section.