Regular Session News #1: 2024 Regular Session starts Monday; five bills affect TRSL
Mar 7, 2024
The 2024 Regular Legislative Session begins at noon on Monday, March 11 and ends at 6 p.m., June 3. This year, the legislature will hold a general session, which means legislators can introduce an unlimited number of bills on any matter except those dealing with taxation or revenue. After session begins, legislators can introduce five additional bills.Retirement-related bills have specific requirements and deadlines, including the pre-filing of certain bills at least 45 calendar days prior to the first day of the session.
While there may be additional bills affecting TRSL filed after the session begins, TRSL is closely monitoring the following five bills that could impact the retirement system and its members.
TRSL Investments
Senate Bill 5 (Sen. Miguez) proposes to put in place broad and far-reaching requirements for all fiduciaries of Louisiana’s public retirement systems when they are making investment decisions or exercising voting rights on behalf of system members. The bill’s definition of fiduciaries includes investment managers and advisors hired by each system’s board of trustees. The bill also prohibits retirement systems from entrusting assets to a fiduciary unless the fiduciary complies with certain requirements. As currently written, SB 5:
- Requires fiduciaries to make investment decisions based solely on financial factors as defined in the bill, and not factors that might further any social, political, or ideological interests;
- Provides a list of social, political and ideological topics to be used in determining if a fiduciary has considered non-financial factors. The bill specifically identifies the following topics as non-financial factors, but states application of the proposed law would not be limited to these topics:
- eliminating, reducing, offsetting, or disclosing greenhouse gas emissions;
- board and employment composition, compensation or disclosure that incorporates characteristics protected in this state;
- divesting from or limiting investments in a company for failing or not committing to meet environmental standards or disclosures;
- access to abortion, sex or gender change or transgender surgery; and
- divesting from or limiting investments in a company that undertakes multiple activities related to firearms or ammunition.
- Identifies specific actions—irrespective of their connection to or impact on retirement system investments—whereby a fiduciary would be determined to have considered a non-financial factor to advance social, political, or ideological interests. The bill’s list of actions includes, but is not limited to the following:
- advertising; statements; explanations; reports; letters to client;
- communications with portfolio companies;
- statements of principles or commitments; and
- participation in, affiliation with, or status as a signatory to any coalition, initiative, joint statement of principles or agreement.
- Prohibits public retirement systems from entrusting assets to a fiduciary unless that fiduciary has a practice of and commits in writing to match the requirements imposed on the public retirement systems by the bill when engaging with portfolio companies and voting shares. This provision does not differentiate between the fiduciary’s practice and policy regarding public retirement system assets and assets of other clients that the fiduciary may have.
- Imposes restrictions on the proxy voting authority of retirement systems;
- Requires retirement systems to compile an annual proxy voting report with certain information included, and make the report available on the system’s website;
- Gives the state attorney general the authority to investigate and enforce the provisions of the proposed law;
- Imposes damages payable to the retirement system by fiduciaries found in violation of the proposed law in an amount equal to three times all monies paid to the person or company by the retirement system.
Optional Retirement Plan (ORP)
Return to Work
House Bill 17 (Rep. Owen) would temporarily allow most TRSL retirees to be reemployed through a contract or corporate contract without the typical one-year waiting period or suspension of retirement benefit.
House Bill 35 (Rep. Riser) would allow retirees who retired after June 30, 2020, to return to work in critical shortage positions, without a one-year waiting period or suspension of retirement benefit, if there are no other properly certified non-retiree candidates to fill the vacancy. As currently written, the proposed change would not apply to disability retirees or retirees employed by higher education institutions.
Service Credit Transfers
Senate Bill 1 (Sen. Price) would add clarifying language in the law related to employer contributions eligible for transfer to another Louisiana public retirement system when a member requests to transfer their service credit to another system, fund, or plan in which they become eligible for membership.
Additional Information
Retirement bills are typically heard first in either the House or Senate retirement committee. The chair of the Senate Retirement Committee is Sen. Edward J. “Ed” Price, and the chair of the House Retirement Committee is Rep. Tony Bacala.
TRSL will keep you informed about the status of bills being monitored throughout the session. Stay tuned for future updates.