Regular Session News #7: Bills proposing changes to retiree reemployment laws and the Optional Retirement Plan advance
Apr 12, 2024
The House retirement committee met yesterday and considered several bills, including return-to-work (RTW) and Optional Retirement Plan (ORP) legislation. The committee favorably reported three bills and one resolution affecting TRSL or its members.A substitute bill for House Bill 35 (Rep. Riser), was proposed by the bill’s author and favorably reported. The substitute bill, which now heads to the full House for consideration, proposes to do the following:
- For retirees who retired before July 1, 2020: Would be eligible to return to work part-time after a 12-month waiting period in certain critical shortage positions without a suspension or reduction in retirement benefits. Under current law, retirees reemployed in these critical shortage positions must work full-time to avoid impacting their benefits.
- For retirees who retired on or after July 1, 2020: Would add a critical shortage provision to the law that, after a 12-month waiting period, allows these retirees to return to work in certain critical shortage positions (same as referenced above) in a part-time (or full-time) capacity without a suspension or reduction in retirement benefits if they are directly reemployed by a TRSL-reporting employer. (Those reemployed by contract or corporate contract, such as a staffing agency, will continue to have their benefits suspended for the duration of their reemployment.)
House Bill 31 (Rep. Freiberg) was favorably reported with amendments and will go to the full House for consideration. As amended, HB 31 proposes the following:
For active, contributing ORP participants as of June 30, 2024, whose first ORP-eligible employment began on or before July 31, 2020:
- Would be eligible to make a one-time choice to join the TRSL defined benefit plan by submitting the necessary paperwork to TRSL no later than June 30, 2025.
- Individuals making this request by December 31, 2024, would cease contributing to their ORP accounts on January 31, 2025, and on February 1, 2025 would start contributing to and accruing service credit in the TRSL defined benefit plan as a member first eligible for membership in a state system on that date.
- All others in this group that make the one-time choice to join the TRSL defined benefit plan, would do so as a new member effective the first day of the month following the month in which TRSL receives the request. (e.g., If request is received in March 2025, membership in the TRSL defined benefit plan would be effective May 1, 2025.)
- Would be eligible to make a one-time choice to join the TRSL defined benefit plan at any time within five years of the individual’s first ORP-eligible employment.
- ORP participants who choose this option would join the TRSL defined benefit plan as a new member effective the first day of the month following the month in which TRSL receives the request.
Additionally, HB 31 provides that ORP participants that elect to join the TRSL defined benefit plan would retain their ORP accounts and receive eventual distributions from those accounts as provided in existing law; and that the ORP administrative fee would be paid by participants and employers.
Senate Bill 1 (Sen. Price) was reported favorably. The bill 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 in which they become eligible for membership.
The committee also favorable reported House Concurrent Resolution 20 (Rep. M. Johnson), which asks Congress to review the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) Social Security benefit reductions and to eliminate or reduce them by supporting H.R. 82 and S. 597 of the 118th Congress and all similar purposed legislation.
SB 1 and HCR 20 now head to the full House for consideration.
House Bill 17 and House Bill 902 were originally scheduled for consideration, but were removed from the agenda prior to the meeting.
TRSL will keep you informed about the status of bills being monitored throughout the session. You can view all meeting schedules and agendas on the Louisiana State Legislature website. Visit the Legislation page of this website, to see all legislation impacting the retirement system.
Stay tuned for future updates.