HB 1237 — RETIREMENT/STATEWIDE SYS: Provides relative to the Municipal Police Employees Retirement System and the Firefighters' Retirement System (EN SEE ACTUARIAL NOTE FC)

Payments Any payments for withdrawals that occur on or after July 1, 2021, shall be payable beginning the first of July of the second fiscal year following the determination by the actuary and if such determination occurs prior to June 30, 2024, or beginning PageJuly 4first of 9the CODING:third fiscal year following the determination by the actuary if such determination occurs on or after June 30, 2024.

Wordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored are additions.

HLS 26RS-3471 REENGROSSED HB NO.

1237 July first of the third fiscal year following the determination by the actuary if such determination occurs on or after June 30, 2024.

(2)(a) Ifthenumberofparticipatingemployeesparticipatingemployeecount of an employer subject to Paragraph (A)(2) of this Section returns to at least the numbernumberof ofparticipatingemployees participatingemployeesasofthethirtiethasofthethirtieth ofJuneimmediatelypreceding thePage withdrawal,5 base employee count for the fiscal year of partial7 dissolution,CODING: the payments required by this Section shall cease on the first of July following the determinationbytheactuarythatasufficientincreaseinparticipatingemployeeshas occurred,andnofurtherpaymentsshallbeduewithrespecttothewithdrawal.partial dissolution.

AnyWordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored paymentsare madeadditions. pursuant to this Section that partial dissolution shall be creditedas an offset of anyamounts due bythe employer attributable to any subsequent withdrawal that occurs partial dissolution occurring after the fiscal year of the sufficient increase in participating employees but within fifteen years of the payments.

HB NO.

1237 ENROLLED the withdrawal, base employee count for the fiscal year of partial dissolution, the payments required by this Section shall cease on the first of July following the determinationbytheactuarythatasufficientincreaseinparticipatingemployeeshas occurred,andnofurtherpaymentsshallbeduewithrespecttothewithdrawal.partial dissolution.

Any payments made pursuant to this Section that partial dissolution shall be credited as an offset of anyamounts due bythe employer attributable to any subsequent withdrawal that occurs partial dissolution occurring after the fiscal year of the sufficient increase in participating employees but within fifteen years of the payments.

Forthepurposesofthis Section,Section,the the following terms shall mean have the following meanings:

* * * Page(3) 5"Participating employee count" for an employer for a fiscal year shall mean the number of 9participating CODING:employees as of June thirtieth of that fiscal year.

Wordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored are additions.

HLS 26RS-3471 REENGROSSED HB NO.

1237 (3) "Participating employee count" for an employer for a fiscal year shall mean the number of participating employees as of June thirtieth of that fiscal year.

E.Page 6 of 7 CODING:

Wordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored are additions.

HB NO.

1237 ENROLLED E.

This Act shall become effectiveeffectiveupon upon signature bythe governor or, if not signedbythegovernor,uponexpirationofthetimeforbillstobecomelawwithoutsignature by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana.

If vetoed bythe governorandgovernor and subsequentlyapprovedbythe legislature, this Act shall become effective on the dayfollowing such approval.

DIGESTSPEAKER ThedigestprintedbelowwaspreparedbyHouseLegislativeOF Services.THE HOUSE OF REPRESENTATIVES PRESIDENT OF THE SENATE GOVERNOR OF THE STATE OF LOUISIANA APPROVED:

ItPage constitutes7 nopart of the7 legislativeCODING: instrument.

The keyword, one-liner, abstract, and digest do not constitute part of the law or proof or indicia of legislative intent.

[R.S.

1:13(B) and 24:177(E)] HB 1237 Reengrossed 2026 Regular Session Bacala Abstract:

Provides relative to dissolution of a police or fire department byan employer in the Municipal Police Employees' Retirement System or Firefighters' Retirement System and to membership in the systems.

Opt-out Provision Present law, applicable to Municipal Police Employees' Retirement System (MPERS) and the Firefighters' Retirement System (FRS), generally requires a person who meets the definition of "employee" contained in present law to become a system member as a condition of employment.

Proposed law retains present law.

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Wordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored are additions.

HLS 26RS-3471 REENGROSSED HB NO.

1237 Presentlaw,applicabletoMPERSandFRS,allowsanemployeewhoseemployercoversits police officers or firefighters under Social Security to elect not to become a member of the system.

Provides requirementsand proceduresformakingthe election including execution of an affidavit.

Proposedlawretainspresentlawandrequiresthepolicechieforthemayoroftheemploying municipality to sign and notarize the affidavit for a police officer electing to not participate in MPERS.

MPERS Dissolution Provision Present law provides that a participating employer in MPERS that partially dissolves its police department shall pay the portion of the system's unfunded accrued liability (UAL) attributable to that employer existing on the June 30 prior to the dissolution, with interest.

Present law requires that the employer's UAL portion be calculated using the allocation percentage included in the prior fiscal year's employer pension report produced according to requirements established by the Governmental Accounting Standards Bd.

Present law requires an employer to pay a pro rata portion of the UAL attributable to that employer if there is a significant reduction in the employer's participation in the system (partial dissolution).

Present law requires such payments if either of the following occurs during a one year period:

(1) A30%orgreaterdecreaseinactivemembersandDROPparticipantsandthenumber of participating employees decreases byat least two.

(2) The number of participating employees decreases byat least 50.

Present law requires that payments be amortized over 15 years in equal payments.

Present law provides that if the number of participating employees of an employer whose department was partially dissolved returns to or exceeds the number of participating employees prior to the partial dissolution, payments shall cease on the July first following the increase.

Provides that payments made will be credited as an offset of anyamounts due foranysubsequentdissolution orpartialdissolution ofthedepartmentthatoccurswithin 15 years of such payment.

Proposed law repeals present law.

Present law provides that the board of trustees shall not collect payments from an employer who was deemed to have partially dissolved its police department if the partial dissolution occurred prior to July 1, 2018.

Proposed law changes the date in present law to July 1, 2025.

Proposed law provides that the UAL is determined using the level percentage of payroll entry age normal actuarial accrued liability.

FRS Partial Dissolution Provision Present law provides generally for an employer with a sufficient reduction in employees to be deemed to have partially dissolved and requires payments to the system.

Provides for definitions and determinations related to the reduction and payments with determinations made as part of the actuarial valuation process.

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Wordsinstruckthroughtypearedeletionsfromexistinglaw;wordsunderscored are additions.

HLS 26RS-3471 REENGROSSED HB NO.

1237 Proposed law retains present law.

Present law provides that a participating employer shall be deemed to have partially dissolved its fire department if either of the following occurs:

(1) The number of participatingemployees of the employer on the valuation date is less than 70% of the number of participating employees of the employer as of June 30th of the prior fiscal year and either the number of participating employees decreases by at least a minimum number or the number of participating employees is zero.

(2) ThenumberofparticipatingemployeesoftheemployerasofJune30th isatleast50 fewer than the number of participating employees of the employer as of June 30th of the prior year.

Present law provides for a minimum decrease of at least three employees.

Proposed law provides that a participating employer shall be deemed to have partially dissolved its fire department if either of the following occurs:

(1) The number of participating employees of the employer as of June 30th is less than 70% of the base employee count and either the number of participating employees is zero or the number of participating employees decreases byat least three.

(2) ThenumberofparticipatingemployeesoftheemployerasofJune30th isatleast50 fewer than the base employee count.

Proposed law further provides that if the calculation of the percentage does not result in a whole number, the actuaryshall round to the nearest lower whole number.

Present law requires payments to begin on the first of July of the second fiscal year following the determination that a partial dissolution has occurred.

ProposedlawrequirespaymentstobeginonthefirstofJulyofthethirdfiscalyearfollowing the determination for withdrawals based on a valuation dated June 30, 2024, or later.

Proposed law provides that if an employer is delinquent on June 30th in any year, certain provisions of proposed law do not apply to the withdrawal on which the payments are delinquent and anyadditional withdrawal based on the June 30th actuarial valuation of that year.

Proposed law provides that the UAL is determined using the level percentage of payroll entry age normal actuarial accrued liability.

Effective upon signature of governor or lapse of time for gubernatorial action.

(Amends R.S.

11:157(C)(1), 2225.4(B), (C)(2), and (D),and 2262.1(A) and (B);

Adds R.S.

11:2262.1(D)(3) and (4) and (E);

Repeals R.S.

11:2225.4(A)(2)) The House Floor Amendments to the engrossed bill:

1.

Make technical changes.

2.

Specify that the requirement for the police chief or mayor of an employing municipality to sign and notarize an affidavit applies onlywhen a police officer chooses to opt-out of MPERS.

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HLS 26RS-3471 REENGROSSED HB NO.

1237 3.

Provide that no payments for partial dissolution shall be collected from an employer if a partial dissolution of a police department occurred prior to July 1, 2025.

4.

Provide that the unfunded accrued liability is determined using the level percentage of payroll entry age normal actuarial accrued liability for both MPERS and FRS when a department partially or fully dissolves.

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