Regular Session News #6: Amended ORP bill clears another hurdle; other TRSL-affecting bills reported favorably

Both the House Appropriations and the House Civil Law and Procedure Committees met today and considered several bills affecting TRSL. Here’s what happened:

Optional Retirement Plan (ORP)

House Bill 24 (Rep. Bacala), was amended and reported favorably by the House Appropriations Committee. HB 24 would make changes to the terms of the optional retirement plan (ORP), a defined contribution plan available to unclassified faculty and staff in higher education. As currently written, HB 24 would:

• Expand ORP eligibility to technical college staff beginning July 1, 2025. Existing technical college staff would have 180 days from July 1, 2025, to opt into the ORP.
• Extend the window for ORP participants to switch back to the TRSL defined benefit plan from five years after first ORP eligibility to seven years.
• Create a window for certain ORP participants (whose first employment in Louisiana higher education occurred before August 1, 2020, but were ineligible to make an irrevocable election to transfer to TRSL last June 30) to become a member of the TRSL regular retirement plan should they return to employment in a TRSL-eligible position. These ORP participants would need to make the switch to TRSL by the later of September 2, 2025, or sixty days after the date of reemployment with a TRSL-contributing employer for the first time after July 1, 2024.
• Add the Commissioner of Higher Education or designee as an ex officio member on the TRSL Board of Trustees. 
• Create a nin-member ORP Advisory Committee comprised of both a faculty and non-faculty ORP participant from each of the state’s four higher education systems (LSU, SU, UL, and LCTCS) as well as one ORP participant not employed in higher education.
• Change the terms of the TRSL defined benefit plan to allow those who are (1) at least age 60 when first employed in a TRSL-eligible position, or (2) at least age 55 with 40 quarters in Social Security to decline membership in TRSL.
• The committee amended HB 24 to remove a proposed increase in the minimum employer contribution rate to ORP participant accounts from 6.2% of pay to 8%. The current minimum employer contribution rate of 6.2% of pay would remain in place. Other amendments were technical in nature. HB 24 now goes to the full House for consideration.

The committee amended HB 24 to remove a proposed increase in the minimum employer contribution rate to ORP participant accounts from 6.2% of pay to 8%. The current minimum employer contribution rate of 6.2% of pay would remain in place. Other amendments were technical in nature. HB 24 now goes to the full House for consideration.

Additional Payment toward Unfunded Accrued Liability (UAL) /Teacher Salaries

The House Civil Law and Procedure Committee reported proposed constitutional amendment House Bill 473 (Rep. Emerson) favorably. HB 473 would apply the balance in three educational trust funds to make a one-time payment to erase a portion of , also known as the unfunded accrued liability (UAL). In effect, the one-time payment would pay off or nearly pay off TRSL’s two oldest debt schedules, thereby, reducing the employer contribution rate for TRSL-participating employers. HB 473 now goes back to the House floor for consideration.

House Bill 466 (Rep. Carlson), a companion bill to HB 473, was amended and reported favorably by the House Appropriations Committee. If enacted through the above-mentioned constitutional amendment, HB 466 would require the savings realized from the reduced employer contribution rate for TRSL-participating employers to be used for permanent salary increases for teachers ($2,000) and school personnel ($1,000) beginning in the 2027-2028 school year. HB 466 includes provisions for state funding if the realized savings for any school district from HB 473 are insufficient to cover the raises. It also establishes specific purposes for which school systems must use any realized savings that exceed what is needed to fund the pay increases. HB 466 now heads to the full House for consideration.
 
Mineral Revenue Dedication to Initial Unfunded Accrued Liability (IUAL)

House Bill 678 (Rep. Emerson), proposed constitutional amendment, was reported favorably with amendments by the House Civil Law and Procedure Committee. HB 678 would remove several constitutional dedications of mineral revenues, including dedications to pay down TRSL’s initial unfunded accrued liability (IUAL), which is debt that was accrued before June 30, 1988. The amendments were technical in nature. HB 678 now goes back to the House floor for consideration.
 
House Bill 599 (Rep. Emerson), which is also a companion bill to HB 678, was reported by substitute by the House Appropriations Committee. The substitute bill would remove statutory provisions related to the dedication of certain mineral revenues, including dedications to pay down TRSL’s IUAL. The substitute bill will receive a number once considered by the full House.