2015 Louisiana Laws
Revised Statutes
TITLE 11 - Consolidated Public Retirement
RS 11:102.1 - Consolidation of amortization payment schedules; Louisiana State Employees' Retirement System

§102.1. Consolidation of amortization payment schedules; Louisiana State Employees' Retirement System

A.(1) For the Louisiana State Employees' Retirement System, effective for the June 30, 2009 system valuation and with payments beginning July 1, 2010, all amortization bases existing on July 1, 2008, shall be consolidated as provided in this Section.

(2) There shall be two consolidated amortization bases calculated and amortized as provided in this Section. Any existing amortization base not included in a consolidated base pursuant to this Section shall remain separate and continue to be amortized and funded as otherwise provided by law.

(3) Beginning with Fiscal Year 2008-2009 and for each fiscal year thereafter, that year's changes, gains, and losses shall be calculated and payments therefor determined as provided in R.S. 11:102, except as otherwise specified in this Section.

B. Original amortization base.

(1) The remaining balances of outstanding amortization bases in excess of twenty years for the years 1993 through 1995, 1997 and 1998, and 2005 through 2007, excluding the amortization base for liability created by Act No. 414 of the 2007 Regular Session of the Legislature, as specified in the June 30, 2008, system valuation adopted by the Public Retirement Systems' Actuarial Committee on February 5, 2009, shall be consolidated into a single amortization base effective for the June 30, 2009, system valuation with payments beginning on July 1, 2010.

(2)(a) To this base shall be applied any monies in the separate fund known alternatively as the "Texaco Account" or the "Initial Unfunded Accrued Liability Account" on June 30, 2010, and any appropriation provided in the 2009 Regular Session of the Legislature.

(b) The balance in this account as of June 30, 2008, exclusive of any subaccount balance, shall be credited with interest at the system's actuarially-assumed interest rate until the funds in the account are applied as provided in this Subsection.

(3)(a) This consolidated amortization base shall be known as the "original amortization base" and shall be amortized with annual payments calculated as follows:

(i) For Fiscal Year 2010-2011, the projected payment shall be the amount specified in the June 30, 2009 system valuation adopted by the Public Retirement Systems' Actuarial Committee pursuant to R.S. 11:127. The actuarially-required contribution shall be determined in accordance with the provisions of R.S. 11:102 in the June 30, 2010 system valuation adopted by the committee.

(ii) Payments thereafter shall form an annuity increasing at six and one-half percent for one year, at five and one-half percent annually for the following four years, and at five percent annually for the following two years.

(iii) Beginning in Fiscal Year 2018-2019, the payments shall be amortized over the remaining period with payments forming an annuity increasing at two percent annually.

(b) The first payment after this consolidation shall be made in Fiscal Year 2010-2011 and the final payment shall be made no later than Fiscal Year 2028-2029.

(4)(a) Except as provided in Paragraph (6) of this Subsection, in any year in which the system exceeds its actuarially-assumed rate of return, the excess returns, up to the first fifty million for the June 30, 2015, valuation, shall be applied to the remaining balance of the original amortization base established in this Subsection. The maximum amount of excess returns to be applied in any subsequent year pursuant to the provisions of this Subparagraph shall equal the prior year's maximum amount increased by the percentage increase in the system's actuarial value of assets for the preceding year, if any.

(b) For any payment made pursuant to the provisions of this Paragraph, if the system is eighty-five percent funded or greater prior to the application of the funds, the net remaining liability shall be reamortized over the remaining amortization period with annual payments calculated as provided in this Subsection or as otherwise provided by law; if the system is less than eighty-five percent funded prior to application of the funds, the net remaining liability shall not be reamortized after such application.

(5) Notwithstanding the provisions of R.S. 11:102(B)(3)(c) and (5) or any other provision of law to the contrary, in any year through Fiscal Year 2016-2017 in which the system receives an overpayment of employer contributions as determined pursuant to R.S. 11:102(B)(2) and in any year through Fiscal Year 2016-2017 in which the system receives additional contributions pursuant to R.S. 11:102(B)(5), the amount of such overpayment or additional contribution shall be applied to the remaining balance of the original amortization base established pursuant to this Subsection. For any payment made pursuant to the provisions of this Paragraph, if the system is eighty-five percent funded or greater prior to the application of the funds, the net remaining liability shall be reamortized over the remaining amortization period with annual payments calculated as provided in this Subsection or as otherwise provided by law; if the system is less than eighty-five percent funded prior to application of the funds, the net remaining liability shall not be reamortized after such application.

(6) For the June 30, 2014, valuation, if the system exceeds its actuarially-assumed rate of return, the excess returns, up to the first twenty-five million dollars, shall be applied to the remaining balance of the original amortization base established in this Subsection, without reamortization of such base.

C. Experience account amortization base.

(1) The remaining balances of outstanding amortization bases for the years 1996, 1999 through 2004, and 2008, as specified in the system valuation adopted by the Public Retirement Systems' Actuarial Committee on February 5, 2009, shall be consolidated into a single amortization base, effective for the June 30, 2009, system valuation with payments beginning on July 1, 2010.

(2) To this shall be applied the balance in the experience account or the balance in the subaccount of the Texaco Account created pursuant to R.S. 11:542(A)(1)(b)(iii).

(3) This consolidated amortization base shall be known as the "experience account amortization base" and shall be amortized with annual payments over a thirty-year period beginning in Fiscal Year 2010-2011 as follows:

(a) For Fiscal Year 2010-2011, the projected payment shall be the amount specified in the June 30, 2009, system valuation adopted by the Public Retirement Systems' Actuarial Committee pursuant to R.S. 11:127. The actuarially-required contribution shall be determined in accordance with the provisions of R.S. 11:102 in the June 30, 2010 system valuation adopted by the committee.

(b) Payments thereafter shall form an annuity increasing at six and one-half percent for one year, five and one-half percent for the following four years, and five percent for the following two years.

(c) Beginning in Fiscal Year 2018-2019, the outstanding balance shall be amortized over the remaining period with annual level dollar payments.

(4)(a) Except as provided in Paragraph (6) of this Subsection, in any year in which the excess returns of the system exceed the amount applied to the Original Amortization Base pursuant to Subparagraph (B)(4)(a) of this Section, the remaining excess returns, up to the next fifty million dollars for the June 30, 2015, valuation, shall be applied to the experience account amortization base established in this Subsection. The maximum amount of excess returns to be applied in any subsequent year pursuant to the provisions of this Subparagraph shall equal the prior year's maximum amount increased by the percentage increase in the system's actuarial value of assets for the preceding year, if any.

(b) For any payment made pursuant to the provisions of this Paragraph, if the system is eighty-five percent funded or greater prior to the application of the funds, the net remaining liability shall be reamortized over the remaining amortization period with annual payments calculated as provided in this Subsection or as otherwise provided by law; if the system is less than eighty-five percent funded prior to application of the funds, the net remaining liability shall not be reamortized after such application.

(5) Notwithstanding the provisions of R.S. 11:102(B)(3)(c) and (5) or any other provision of law to the contrary, in any year from Fiscal Year 2017-2018 through Fiscal Year 2039-2040 in which the system receives an overpayment of employer contributions as determined pursuant to R.S. 11:102(B)(2) and in any year from Fiscal Year 2017-2018 through Fiscal Year 2039-2040 in which the system receives additional contributions pursuant to R.S. 11:102(B)(5), the amount of such overpayment or additional contribution shall be applied to the remaining balance of the experience account amortization base established pursuant to this Subsection. For any payment made pursuant to the provisions of this Paragraph, if the system is eighty-five percent funded or greater prior to the application of the funds, the net remaining liability shall be reamortized over the remaining amortization period with annual payments calculated as provided in this Subsection or as otherwise provided by law; if the system is less than eighty-five percent funded prior to application of the funds, the net remaining liability shall not be reamortized after such application.

(6) For the June 30, 2014, valuation, if the excess returns of the system exceed the amount applied to the original amortization base pursuant to Subparagraph (B)(6) of this Section, the remaining excess returns, up to the next twenty-five million dollars, shall be applied to the remaining balance of the experience account amortization base established in this Subsection, without reamortization of such base.

Acts 2009, No. 497, §1, eff. June 30, 2009; Acts 2014, No. 399, §1, eff. June 30, 2014.

NOTE: See Acts 2009, No. 497, §2, eff. June 30, 2009, relative to conflicts with previous Acts and §4 relative to affect on contribution rates.