HB 1237

ENROLLED
 2026 Regular Session
  ACT No. 922
 HOUSE BILL NO. 1237  (Substitute for House Bill No. 49 by Representative Bacala)
 BY REPRESENTATIVES BACALA AND FREEMAN
1AN ACT
2 To amend and reenact R.S. 11:157(C)(1), 2225.4(B), (C)(2), and (D), 2227(D)(2), and
32262.1(A), (B), and (D)(introductory paragraph), to enact R.S. 11:2262.1(D)(3) and
4(4) and (E), and to repeal R.S. 11:2225.4(A)(2), relative to the Municipal Police
5Employees' Retirement System and the Firefighters' Retirement System; to provide
6relative to membership in the systems; to provide for recovery of delinquent
7payments; to provide relative to partial dissolution of a police department or a fire
8department; to provide relative to the payment of unfunded accrued liability by
9employers; to provide for certain determinations; to provide for timing of payments;
10to provide for definitions; to provide relative to employer contributions; to provide
11for effectiveness; and to provide for related matters.
12Notice of intention to introduce this Act has been published
13as provided by Article X, Section 29(C) of the Constitution
14of Louisiana.
15 Be it enacted by the Legislature of Louisiana:
16Section 1.    R.S. 11:157(C)(1), 2225.4(B), (C)(2), and (D), 2227(D)(2), and
17 2262.1(A), (B), and (D)(introductory paragraph) are hereby amended and reenacted and R.S.
18 11:2262.1(D)(3) and (4) and (E) are hereby enacted to read as follows:
19§157. Firefighters' Retirement System; Municipal Police Employees' Retirement
20System; optional membership; refund of employee contributions; irrevocable
21election; reenrollment; membership verification information
22*       *  *
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1C.(1) Any employee who elects not to become a member of the applicable
2retirement system set forth in Subsection A of this Section shall, before such election
3can become valid, execute and file with the retirement system an affidavit stating
4that his election not to be a member is of his own free will and is his own voluntary
5act and deed. For an employee as defined in R.S. 11:2213, the affidavit shall be
6signed and notarized by the chief of police or mayor of the employing municipality.
7*       *  *
8§2225.4. Unfunded accrued liability; payment by employer
9*       *  *
10B.(1) Any amount due pursuant to Subsection A of this Section shall be
11determined by the actuary employed by the system and shall be amortized over
12fifteen years in equal monthly payments with interest at the system's valuation
13interest rate. Such payments shall be payable to the system electronically beginning
14July first of the second fiscal year following the determination by the actuary and in
15the same manner as regular payroll payments to the system. Beginning July first of
16the fiscal year following the withdrawal dissolution, interest shall accrue at the
17system's actuarial valuation rate, compounded annually.
18(2) If the number of participating employees of an employer subject to
19Paragraph (A)(2) of this Section returns to at least the number of participating
20employees as of the June thirtieth immediately preceding the withdrawal, the
21payments required by this Section shall cease on the July first following the
22determination by the actuary that a sufficient increase in participating employees has
23occurred, and no further payments shall be due with respect to the withdrawal. Any
24payments made pursuant to this Section shall be credited as an offset of any amounts
25due by the employer attributable to any subsequent withdrawal that occurs within
26fifteen years of the payments.
27C.
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1(2) Notwithstanding any other provision of law to the contrary, the board of
2trustees shall not collect any payments due from an employer for any partial
3dissolution that occurred prior to July 1, 2018. July 1, 2025.
4D. For the purposes of this Section, the following terms shall have the
5following meanings:
6(1) "Participating employee" shall mean an active member or participant in
7the Deferred Retirement Option Plan.
8(2) "Withdrawal" shall mean the dissolution or partial dissolution of a police
9department as described in Subsection A of this Section. For the purposes of this
10Section, the unfunded accrued liability shall be determined using the level percentage
11of payroll entry age normal actuarial accrued liability.
12*       *  *
13§2227. Method of financing
14*       *  *
15D. Pension accumulation fund:
16The pension accumulation fund shall be the fund in which shall be
17accumulated all reserves for the payment of all pension and benefits payable from
18contributions made by employers. Contributions to and payments from the pension
19accumulation fund shall be made as follows:
20*       *  *
21(2) Delinquent payments due under R.S. 11:2227(B)(1) and 2227(D)(1) may
22be recovered through either of the following actions:
23(a) Upon certification to the state treasurer and written notice to the
24municipality by the director that a municipality's monthly report and payment of
25contributions is delinquent, the state treasurer shall deduct the amount of the
26delinquent contributions from any monies then available for distribution to or for the
27benefit of that municipality and shall transmit said amount directly to the board of
28trustees of the retirement system. Upon making such a deduction, the state treasurer
29shall immediately notify the municipality that the deduction has been made and that
30the funds available for distribution to it are reduced accordingly. In like manner, the
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1director of the system, upon receipt of said funds, shall credit such funds to the
2proper account affected thereby and shall notify the municipality thereof; or
3(b) Through an action initiated in a court of competent jurisdiction against
4the political subdivision or instrumentality liable therefor together with interest
5charged at the legal rate computed from the date the payment became delinquent.
6*       *  *
7§2262.1. Dissolution of fire department; unfunded accrued liability; payment by
8employer
9A.(1)(a) If an employer fully dissolves its fire department, the employer shall
10remit to the system, beginning the first July immediately following the date of
11dissolution, that portion of the unfunded accrued liability existing on the thirtieth of
12June immediately prior to the date of dissolution of the fire department that is
13attributable to such employer and calculated using the allocation percentage included
14in the prior fiscal year's employer pension report produced according to requirements
15established by the Governmental Accounting Standards Board. The amount due
16pursuant to the provisions of this Paragraph shall include interest at the system's
17valuation interest rate.
18(b) For the purposes of this Section, the actuary employed by the system may
19make adjustments to the allocation percentages included in the employer pension
20report for the prior fiscal year based on additional information.
21(2)(a) If an employer partially dissolves its fire department during a fiscal
22year, the employer shall be liable for a pro rata portion of the system's unfunded
23accrued liability. The portion shall be calculated by applying the percentage
24decrease in the salaries paid to participating employees by the employer on the
25thirtieth of June and salaries paid to participating employees by the employer as of
26the thirtieth of June of the prior year to multiplying the total payment that would
27have been required pursuant to the provisions of Paragraph (1) of this Subsection if
28the employer had fully dissolved its fire department. Payments required pursuant to
29the provisions of this Paragraph shall include interest at the system's valuation
30interest rate. by the ratio of the difference between the fiscal year's base employee
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1count and the fiscal year's participating employee count to the prior fiscal year's
2participating employee count. Payments required pursuant to the provisions of this
3Paragraph shall include interest at the system's valuation interest rate.
4(b) An employer shall be deemed to have partially dissolved its fire
5department if either of the following occurs:
6(i) The number of participating employees of the employer participating
7employer count as of the thirtieth of June is less than seventy percent of the base
8employee count rounded down to the nearest whole number, and the difference
9between the base employee count and the participating employee count is at least
10three number of participating employees of the employer on the thirtieth of June of
11the prior year and either the number of participating employees decreases by at least
12three or the number of participating employees is zero.
13(ii) The number of participating employees of the employer as of the thirtieth
14of June employee count is at least fifty fewer than the number of participating
15employees of the employer as of the thirtieth of June of the prior year. base employee
16count.
17B.(1) Any amount due pursuant to Subsection A of this Section shall be
18determined by the actuary employed by the system and shall be amortized over
19fifteen years in equal payments with interest at the system's valuation rate. Payments
20Any payments for withdrawals that occur on or after July 1, 2021, shall be payable
21beginning the first of July of the second fiscal year following the determination by
22the actuary and if such determination occurs prior to June 30, 2024, or beginning
23July first of the third fiscal year following the determination by the actuary if such
24determination occurs on or after June 30, 2024. Such payments shall be payable in
25the same manner as regular payroll payments to the system. Beginning on the first
26of July of the fiscal year following withdrawal, interest shall accrue at the system's
27actuarial valuation rate, compounded annually.
28(2)(a) If the number of participating employees participating employee count
29of an employer subject to Paragraph (A)(2) of this Section returns to at least the
30number of participating employees as of the thirtieth of June immediately preceding
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1the withdrawal, base employee count for the fiscal year of partial dissolution, the
2payments required by this Section shall cease on the first of July following the
3determination by the actuary that a sufficient increase in participating employees has
4occurred, and no further payments shall be due with respect to the withdrawal. partial
5dissolution. Any payments made pursuant to this Section that partial dissolution
6shall be credited as an offset of any amounts due by the employer attributable to any
7subsequent withdrawal that occurs partial dissolution occurring after the fiscal year
8of the sufficient increase in participating employees but within fifteen years of the
9payments.
10(b) Each fiscal year, for each employer subject to Paragraph (A)(2) of this
11Section for which a payment remains due in the following fiscal year, the system's
12actuary shall review the participating employee count for the employer for the prior
13fiscal year. Beginning July first for the fiscal year following the actuary's review,
14the payments determined according to Paragraph (B)(1) of this Section shall be
15proportionately adjusted based on the participating employee count for the employer
16for the prior fiscal year. Such adjustments shall not cause the proportional payment
17to exceed the payment initially determined for the partial dissolution.
18*       *  *
19D. For the purposes of this Section, the following terms shall mean have the
20following meanings:
21*       *  *
22(3) "Participating employee count" for an employer for a fiscal year shall
23mean the number of participating employees as of June thirtieth of that fiscal year.
24(4) "Base employee count" for an employer for a fiscal year shall mean the
25number of participating employees as of June thirtieth of the prior fiscal year unless
26the employer has partially dissolved in one or more of the prior fifteen fiscal years
27and payments remain due for at least one such partial dissolution. In that case, the
28base employee count for an employer for a fiscal year shall be the lesser of the
29smallest participating employee count from such prior partial dissolution or the
30number of the participating employees as of the June thirtieth of the prior fiscal year.
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1E. For the purposes of this Section, the unfunded accrued liability shall be
2determined using the level percentage of payroll entry age normal actuarial accrued
3liability.
4Section 2. R.S. 11:2225.4(A)(2) is hereby repealed in its entirety.
5Section 3. This Act shall become effective upon signature by the governor or, if not
6 signed by the governor, upon expiration of the time for bills to become law without signature
7 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
8 vetoed by the governor and subsequently approved by the legislature, this Act shall become
9 effective on the day following such approval.
  SPEAKER OF THE HOUSE OF REPRESENTATIVES
  PRESIDENT OF THE SENATE
  GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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