§1332. Experience account
A.
(1)The experience account shall be credited as follows:
(a)To the extent permitted by Subparagraph (c) of this Paragraph and after the
allocation to the amortization bases as provided in R.S. 11:102.4, an amount not to exceed
fifty percent of the remaining balance of the prior year's net investment experience gain as
determined by the system's actuary.
(b)To the extent permitted by Subparagraph (c) of this Paragraph, an amount not to
exceed that portion of the system's net investment income attributable to the balance in the
experience account during the prior year.
(c)In no event shall a credit be made to the account that would cause the balance in
the experience account to exceed the reserve necessary to grant:
(i)Two permanent benefit increases as determ
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§1332. Experience account
A.(1) The experience account shall be credited as follows:
(a) To the extent permitted by Subparagraph (c) of this Paragraph and after the
allocation to the amortization bases as provided in R.S. 11:102.4, an amount not to exceed
fifty percent of the remaining balance of the prior year's net investment experience gain as
determined by the system's actuary.
(b) To the extent permitted by Subparagraph (c) of this Paragraph, an amount not to
exceed that portion of the system's net investment income attributable to the balance in the
experience account during the prior year.
(c) In no event shall a credit be made to the account that would cause the balance in
the experience account to exceed the reserve necessary to grant:
(i) Two permanent benefit increases as determined pursuant to this Section if the
system is at least eighty percent funded.
(ii) One permanent benefit increase as determined pursuant to this Section if the
system is less than eighty percent funded.
(d) If the system is less than eighty percent funded and the account has reserves in
excess of the amounts provided for in Item (c)(ii) of this Paragraph, no amount shall be
credited to the account.
(2) The experience account shall be debited as follows:
(a) An amount equal to that portion of the system's net investment loss attributable
to the balance in the experience account during the prior year.
(b) An amount sufficient to fund a permanent benefit increase granted pursuant to
the provisions of this Section.
(c) In no event shall the amount in the experience account fall below zero.
(3) Effective for the June 30, 2015, valuation, the system's funded percentage for
purposes of this Section shall be determined before any allocation to the experience account.
B. 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 permanent benefit increase to retirees and
beneficiaries whenever the conditions in this Section are satisfied. The board of trustees
shall not grant a permanent benefit increase unless such permanent benefit increase has been
approved by the legislature.
C.(1) No increase shall be granted if either of the following applies:
(a) The system is less than fifty-five percent funded.
(b) The system is at least fifty-five percent funded but less than eighty-five percent
funded and the legislature granted a benefit increase in the preceding fiscal year.
(2) Any increase granted pursuant to the provisions of this Section shall begin on the
July first following legislative approval, shall be payable annually, and shall be an amount
equal to the lesser of:
(a) The increase in the consumer price index, U.S. 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.
(b)(i) Three percent, if the system is at least eighty percent funded and the system
earns an actuarial rate of return of at least seven percent interest on the investment of the
system's assets.
(ii) Two and one-half percent, if all of the following apply:
(aa) The system is at least seventy-five percent funded but less than eighty percent
funded and the system earns an actuarial rate of return of at least seven percent interest on
the investment of the system's assets.
(bb) The legislature has not granted a benefit increase in the preceding fiscal year.
(iii) Two percent, if either of the following applies:
(aa) 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.
(bb) The system is at least seventy-five percent funded and the system does not earn
an actuarial rate of return of at least seven percent interest on the investment of the system's
assets.
(iv) One and one-half percent, 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.
(3) The percentage of each recipient's permanent benefit increase shall be based on
the benefit being paid to the recipient on the effective date of the increase; however, any such
permanent benefit increase granted on or before June 30, 2015, shall be limited to and shall
be payable based only on an amount not to exceed eighty-five thousand dollars of the retiree's
annual benefit. Additionally, any such permanent benefit increase granted on or after July
1, 2015, shall be limited to and shall be payable based only 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 any increase in the CPI-U for the preceding year. 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 CPI-U for the twelve-month period ending on the system's valuation
date.
(4)(a) 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 (2) of this Subsection, the board may make the recommendation provided in
Subsection B of this Section if all of the following conditions are satisfied:
(i) No benefit increase was granted in the preceding fiscal year.
(ii) The experience account balance established in the system valuation for the
preceding fiscal year reached its maximum reserve permitted pursuant to Subparagraph
(A)(1)(c) of this Section applicable to the system valuation for that valuation year.
(iii) The experience account balance established in the system valuation for the
current fiscal year is insufficient to fund the increase permitted pursuant to Paragraph (2) of
this Subsection applicable to the system valuation for the preceding fiscal year.
(iv) All of the insufficiency in the account is attributable to the following:
(aa) The growth of the cost of the increase, but only if that growth was produced
solely by either or both of these events:
(I) Changes in the pool of the eligible recipients.
(II) 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 (3) of this Subsection.
(bb) The insufficiency of credits to the account, if any, to cover the growth in the cost
of the increase.
(b) The amount of the increase shall be equal to the amount that the balance in the
experience account will fully fund rounded to the nearest lower one-tenth of one percent.
D.(1)(a) Except as provided in Subparagraph (c) of this Paragraph, in order to be
eligible for the permanent benefit increase, 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.
(ii) Shall have attained at least age sixty.
(b) Except as provided in Subparagraph (c) of this Paragraph, a nonretiree
beneficiary shall be eligible for the permanent benefit increase:
(i) If benefits had been paid to the retiree, or the beneficiary, or both combined, for
at least one year.
(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.
E. Effective July 1, 2007, the balance in the experience account shall be zero.
F. In addition to the permanent benefit increase authorized by Subsection B of this
Section, the board of trustees may grant a supplemental permanent benefit increase to all
retirees and beneficiaries who are at least age sixty-five and who retired on or before June
30, 2001. This supplemental increase shall consist of an amount equal to two percent of the
benefit being received on the date of the increase. In order to grant such supplemental
permanent benefit increase, 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 permanent benefit increase to retirees and beneficiaries whenever the
balance in the 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 permanent benefit increase shall
not be granted. The board of trustees shall not grant such supplemental permanent benefit
increase unless such supplemental permanent benefit increase has been approved by the
legislature. Any such supplemental permanent benefit increase paid on or before June 30,
2015, shall be limited to and shall be payable based only on an amount not to exceed
eighty-five thousand dollars of the retiree's annual benefit. Any such supplemental
permanent benefit increase paid on or after July 1, 2015, shall be limited to and shall be
payable based only 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
CPI-U 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
CPI-U for the twelve-month period ending on the system's valuation date, if any. Any
permanent benefit increase granted pursuant to the provisions of this Subsection shall begin
on the July first following legislative approval and shall be payable annually.
G.(1) Effective for the system valuation in which the account funding contribution
rate equals the maximum allowable pursuant to R.S. 11:102(F)(4)(b), after the experience
account is credited and debited in accordance with Subsection A of this Section, the
remaining balance in the experience account shall be allocated to the PBI account established
pursuant to R.S. 11:1332.1, and the experience account balance shall be zero.
(2) After the allocation of funds provided for in Paragraph (1) of this Subsection, the
provisions of this Section shall terminate.