§103. Employer contributions; determination; statewide systems

A. The provisions of this Section are applicable with respect to the statewide public retirement systems, whose benefits are not guaranteed by Article X, Section 29(A) and (B) of the Louisiana Constitution.

B.(1) Except as provided in Subsection C of this Section, for each fiscal year beginning with Fiscal Year 1989-1990, for each statewide retirement system, the employer contribution rate shall equal the actuarially required employer contribution as determined under Paragraph (3) of this Subsection, divided by the total projected payroll of all active members of the particular system for the fiscal year. Active member payroll shall include participants in the Deferred Retirement Option Plan, but only if direct employer contributions are made based on salaries for such participants.

(2) At the end of each fiscal year, the difference between the actuarially required employer contribution for the fiscal year, as determined under Paragraph (3) of this Subsection by the most recent actuarial valuation, and the amount of employer contributions actually received for the fiscal year, excluding any amounts received for the extraordinary purchase of additional benefits or service, shall be determined to be that fiscal year's short fall amount.

(3) The actuarially required employer contribution for each fiscal year shall be that dollar amount equal to the sum of:

(a) The employer's normal cost for that fiscal year, computed as of the first of the fiscal year using the system's actuarial funding method as specified in R.S. 11:22 and taking into account the value of employee contributions, including interest thereon, such employer's normal cost projected to the middle of the fiscal year at the assumed actuarial interest rate.

(b) The projected noninvestment related administrative expenses for the fiscal year.

(c) That fiscal year's payment, computed at the first of that fiscal year and projected to the middle of that fiscal year, at the actuarially assumed interest rate necessary to amortize previous years' shortfall amounts, if any, in the same manner as provided in Subsection (B)(3)(e)(i) of this Section if an immediate gain funding method is used; otherwise, amortized over the future working lifetime of current participants.

(d) That fiscal year's payment, computed as of the first of that fiscal year using that system's amortization method specified in R.S. 11:42, necessary to amortize the unfunded accrued liability as of the end of Fiscal Year 1988-1989, such unfunded accrued liability computed using the system's actuarial funding method as specified in R.S. 11:22, such payment projected to the middle of that fiscal year at the actuarially assumed interest rate.

(e) That fiscal year's payment, calculated as of the first of that fiscal year and projected to the middle of that fiscal year at the actuarially assumed interest rate, necessary to amortize changes in actuarial liability due to:

(i)(aa) Except as otherwise provided by this Item, actuarial gains and losses, if appropriate for the funding method used by the system as specified in R.S. 11:22, for each fiscal year such payments to be calculated as level dollar amounts over a period of fifteen years from the fiscal year of occurrence of each such actuarial gain or loss, such gains and losses to include any increases in actuarial liability due to governing authority granted cost-of-living increases.

(bb) Repealed by Acts 2014, No. 402, §2, eff. June 4, 2014.

(cc) With regard to the Firefighters' Retirement System, for each fiscal year commencing July 1, 2009, or thereafter, the payments required by this Subparagraph are to be calculated as level dollar amounts over a period of twenty years from the fiscal year of occurrence of each such actuarial gain or loss. For actuarial gains and losses accruing on or after July 1, 2010, the amortization period shall decrease by one numerical year each fiscal year thereafter until attaining a fifteen year amortization period. Such gains and losses shall include any increases in actuarial liability resulting from the governing authority granting any cost-of-living increases.

(ii) Changes in actuarial assumptions or the method of valuing of assets, such payments to be computed as level dollar amounts over a period of fifteen years from the year of occurrence of the change.

(iii) Changes in actuarial funding methods, excluding changes in methods of valuing of assets, such payments to be computed as level dollar amounts over a period of thirty years from the year of occurrence of the change.

(iv) Changes in actuarial accrued liability, computed using the actuarial funding method as specified in R.S. 11:22, due to legislation changing plan provisions, such payments to be computed in the manner and over the time period specified in the legislation creating the change or, if not specified in such legislation, as level dollar amounts over a period of fifteen years from the year of occurrence of the change.

(4) At the end of the fiscal year during which the assets, excluding the outstanding balance due to Subparagraph (B)(3)(c) of this Section, exceed the actuarial accrued liability, the amortization schedules contained in Subparagraphs (B)(3)(d) and (e) of this Section shall be fully liquidated and assets in excess of the actuarial accrued liability shall be amortized as a credit in accordance with the provisions of Subparagraph (B)(3)(e) of this Section.

C. The net direct actuarially required employer contribution for each fiscal year, beginning with Fiscal Year 1996-1997, shall be that dollar amount equal to the contribution rate specified in Subparagraph (2)(b) of this Subsection, if any, increased by the cost itemized in Paragraph (1) of this Subsection, reduced by the contributions itemized in Paragraph (2) of this Subsection, rounded to the nearest one-quarter percent:

(1) The gross required employer contribution as provided in Paragraph (B)(1) of this Section.

(2) Elements of the gross employer contributions:

(a) Dedicated ad valorem taxes and revenue sharing funds.

(b) Targeted portion of the net direct employer's contributions, which shall be treated as a fixed rate unless a higher or lower rate results from application of the provisions of this Section in its entirety:

(i) Firefighters' Retirement System -- 9%

(ii) Municipal Police Employees' Retirement System -- 9%

(iii) Sheriffs' Pension and Relief Fund -- 7%

(c) Dedicated assessments against insurers. Such amounts, excluding amounts paid for funding of mergers, to be the lesser of available funds or cost stated in Paragraph (1) of this Subsection reduced by contributions stated in Subparagraphs (a) and (b) of this Paragraph but in no event shall be less than zero.

D. For the Firefighters' Retirement System of Louisiana, effective with the June 30, 2002, valuation, all outstanding amortization bases in existence on June 30, 2002, exclusive of merger bases, shall be combined, offset, and reamortized over the period ending June 30, 2029, with level dollar payments. This Subsection shall not apply to amortization bases established after June 30, 2002.

E. For the Municipal Police Employees' Retirement System, for the fiscal year commencing July 1, 2014, all amortization credit and charge bases existing as of June 30, 2014, shall be combined, offset, and reamortized over a twenty-year period with level payments commencing July 1, 2014.

Acts 1988, No. 81, §2, eff. July 1, 1989; Acts 1990, No. 470, §1, eff. July 1, 1990; Acts 1991, No. 397, §1, eff. July 1, 1991; Acts 1993, No. 734, §1, eff. July 1, 1993; Acts 1995, No. 1117, §1, eff. June 30, 1995; Acts 1997, No. 792, §1, eff. July 1, 1997; Acts 1997, No. 1293, §1, eff. July 15, 1997; Acts 2001, No. 911, §1, eff. July 1, 2001; Acts 2003, No. 620, §1, eff. June 27, 2003; Acts 2003, No. 1079, §1, eff. July 2, 2003; Acts 2005, No. 448, §1, eff. July 1, 2005; Acts 2009, No. 422, §1, eff. July 1, 2009; Acts 2010, No. 861, §4; Acts 2014, No. 402, §§1 and 2, eff. June 4, 2014.