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