Regular Session News #9: Return-to-work bill passes Senate
May 29, 2020
On Wednesday, May 27, the full Senate passed return-to-work bill, House Bill 8 (Rep. Bourriaque) with additional floor amendments. While HB 8 was substantively amended last week by the Senate Retirement Committee, the full Senate amendments largely restated committee amendments and made several additional changes.
In its current posture, HB 8 now does the following:
- Provides that the current return-to-work law will only apply to retirees who have returned to work with an employer covered by TRSL on or before June 30, 2020, and to retirees in the original grandfathered group (members who were retired on or before June 30, 2010).
- Provides that a retiree who returns to work with an employer covered by TRSL on or after July 1, 2020, will choose one of the following two options, depending on whether the retiree is re-employed in a full-time position:
- Option 1: Have earnings limited to 25% (per fiscal year) of the retiree’s final average compensation (FAC) with a reduction in the benefit if the cap is exceeded, or
- Option 2: (Only available to retirees re-employed in full-time positions):
- Have benefits suspended for the duration of re-employment.
- Become an active member of the system and accrue a supplemental benefit, which will be calculated with the same formula used to determine the original benefit. If re-employed for at least 36 months, the supplemental benefit will be calculated based on the higher of the retiree’s original FAC or the FAC since re-employment. If re-employed less than 36 months, the supplemental benefit will be calculated based on the retiree’s original FAC.
- Provides that a retiree returning to work under Option 1 can convert to Option 2 any time prior to or after reaching the allowable 25% earnings limitation (per fiscal year) of the retiree’s FAC.
- Provides any retiree who returns to active service after July 1, 2020 within 12-months after retirement shall have his retirement benefits suspended for the duration of such active service or the lapse of 12 months from the effective date of his retirement, whichever occurs first.
- Provides that a retiree covered by the current return-to-work law can elect to be covered by the provisions of proposed law.
- Provides that any retiree who returns to active service shall have his benefit suspended if such re-employment is based on a contract or corporate contract.
- Provides that disability retirees cannot return to work under any of the proposed provisions.
- Provides that employer return-to-work reporting requirements, including penalties for failure to report, will be the same as under current law.
Other legislative news
Two bills that would make a supplemental appropriation to the TRSL initial unfunded accrued liability (IUAL) from a portion of the FY 2018-19 surplus funds in the state treasury – Senate Bill 189 (Sen. White) and House Bill 307 (Rep. Zeringue) – both advanced. SB 189 received final passage in the full House, and HB 307 is scheduled for final passage by the full Senate on Friday, May 29.
Both of the concurrent resolutions that ask Congress to consider eliminating the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security benefit reductions are moving forward. House Concurrent Resolution 9 (Rep. M. Johnson) passed the Senate and has been signed by the Speaker of the House and the Senate President. Senate Concurrent Resolution 34 (Sen. Mizell) is scheduled to be considered by the full House on Friday, May 29.
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.