LRTA Legislative Update: SB 18 is a SUCCESS!

SB 18 Passes House and Heads to the Governor’s Office for Signature.

The LRTA is pleased to announce that SB 18 passed the final hurdle in the House with a vote of 99-0!

This bill heads to the Governor’s Office for signature and will go into effect July 1, 2023. Next year deposits will be made into the new COLA account as the employer rate decreases. The first new COLA will begin around 2029 and it’s anticipated that retirees will receive cost of living adjustments every two to three years, pending legislative approval.

This landmark legislation represents the first time in state history that retired educators will receive cost of living adjustments every two to three years, therefore, preserving the buying power of our basic benefits for future and current retirees.

Thanks to all LRTA members who participated in our statewide advocacy efforts!

Join LRTA today to receive our Legislative Edition Newsletter with a rundown of how we were able to pass SB 18 with bipartisan support, as well as a rundown of other important retirement bills tracked by the Louisiana Retired Teachers Association.

BILL SUMMARY

Direct Funding of Permanent Benefit Increases (PBIs)/Cost of Living Adjustments (COLAs)

Senate Bill No. 18 by Senator Ed Price

This bill provides for direct payment of additional employer contributions to be credited to a newly established PBI/COLA account designed for accumulation of funds to pay PBIs/COLAs (the PBI/COLA account). The bill also provides for an additional component of the required employer contribution rate called the PBI/COLA account funding contribution, or AFC rate. In a year when the employer rate is scheduled to drop, half of the decrease will be added to the maximum possible AFC rate until that maximum equals 2.5%. The bill would phase out and terminate the Experience Account and of the diversion of the investment earnings into the account. In approximately 2029, the Experience Account will be phased out and any remaining balance would be transferred to the new COLA funding account.

Although this bill will not guarantee PBI/COLAs, the intent of this legislation is to garner direct funding to eventually award a 2% supplemental benefit increase every two to three years to retirees beginning in 2029 when the initial unfunded accrued liability (IUAL) is paid off.