Louisiana House Bill HB40

Louisiana 2026 Regular Session

• Introduced: 1/23/26
• Refer: 1/23/26
• Refer: 3/9/26

Caption

RETIREMENT/MUNICIPAL POL: Provides relative to the payment of unfunded accrued liability by employers of the Municipal Police Employees' Retirement System (OR SEE ACTUARIAL NOTE FC)

Summary

HB 40 amends the laws governing the Municipal Police Employees’ Retirement System (MPERS) to address how an employer’s unfunded accrued liability (UAL) is handled when employees are transferred between participating police departments. Under current law, a participating employer that is deemed to have partially dissolved its police department must pay a pro rata share of MPERS’s UAL, based on the reduction in payroll and with interest. The bill keeps that framework in place but adds a new rule for situations where the apparent partial dissolution occurs because employees moved from one MPERS-participating police department to another. If the system determines that the employer would not have partially dissolved absent the transfer, and the transferred employees remain in MPERS, the employer would not owe the UAL payment otherwise triggered by partial dissolution. If the partial dissolution would have happened anyway, the employer would still owe the payment, but the calculation would exclude the transferred employees. In effect, the bill is designed to prevent a transfer of officers between participating departments from automatically creating a retirement liability for the sending employer when the transfer itself did not cause the reduction in force.

Impact

The bill would add R.S. 11:2225.4(A)(2)(d) to the Louisiana Revised Statutes and would narrow the circumstances under which a municipal police employer must pay MPERS unfunded accrued liability after a partial dissolution. Its practical effect is to protect certain municipalities or police departments from being charged a retirement debt solely because officers were reassigned to another participating employer, while preserving liability where a true partial dissolution would have occurred regardless of the transfer. The affected parties are MPERS, participating municipal police employers, and transferred employees who remain members of the system.

Sentiment

Based on the bill text and available context, the bill appears to be a technical retirement measure rather than a broadly controversial policy change. The caption and digest suggest it is intended to clarify or refine how MPERS calculates employer liability in transfer situations, which typically indicates a targeted administrative fix. There are no recorded committee transcripts or votes in the provided material, so there is no direct evidence of opposition or support beyond the bill’s pending status in House Retirement.

Contention

The main point of potential contention is whether an employer should be relieved of UAL responsibility when employee transfers contribute to, or coincide with, a partial dissolution finding. Supporters would likely argue that employers should not be penalized for transfers that do not reflect an actual reduction in police staffing, while critics could be concerned that the bill reduces retirement-system funding obligations or creates an exception that may be difficult to administer. The key interpretive issue is the system’s determination of whether a partial dissolution would have occurred without the transfer, which places significant weight on actuarial and factual analysis by MPERS.