House panel adopts substitute to soften municipal police retirement penalties, change pay rules

The House Retirement Committee adopted a substitute to House Bill 49 and an amendment package affecting the Municipal Police Employees Retirement System, moving the overhaul forward from committee on April 9.

The substitute and related amendments change how earnable compensation is defined (excluding some retention and one‑time bonuses beginning Jan. 1, 2026), create mechanisms for purchasing out‑of‑state service credit, adjust COLA prefunding and accrual rates, add an affidavit requirement for employees choosing to opt out of MPERS, and revise how partial dissolutions of police departments trigger payments. Representative Bakala, the package sponsor, said the changes came from months of negotiations with the Louisiana Municipal Association and MPERS.

Why it matters: Mayor Helena Moreno of New Orleans told the committee the city lost more than 50 officers during COVID and has accrued more than $38 million in partial‑dissolution penalties. She and other city officials supported the substitute, which backstops municipalities and, according to committee discussion, will save New Orleans roughly $41 million across the bills as written.

Committee discussion focused on balancing two goals: not penalizing small jurisdictions that lose officers temporarily while preserving liability when a department is completely abolished. The substitute removes the municipal police partial dissolution provision in its current form and replaces it with a simpler year‑to‑year proportional adjustment; full dissolution liabilities remain. Representative Bakala said the intent is to avoid penalizing a town that cannot quickly rehire while ensuring that a department that truly shuts down remains responsible for its share of the unfunded liability.

Opt‑out and documentation: The substitute requires a notarized affidavit signed by either the chief of police or the mayor certifying that an employee’s decision to opt out is voluntary and appropriate under Social Security rules. Committee members and municipal representatives said the additional certification is an administrative safeguard to limit improper opt‑outs.

Survivor benefits and retroactive relief: The bill would create a limited retroactive window to make officers killed in the line of duty (between 07/01/2010 and 03/01/2026) eligible for survivor benefits even if they were not timely enrolled, a change supporters said will help families that received no benefits due to administrative timing.

Fiscal mechanics and COLA: The amendment package also authorizes a funding‑deposit account approach so the system can prefund modest COLAs in years when employer contribution rates decline. The package trims a proposed increase in the non‑hazardous accrual rate from 3 1/3% to 3% as part of compromise negotiations.

Support and process: Richard Williams of the Louisiana Municipal Association, Jason DeMarco of MPERS, and Mayor Moreno spoke in favor. Laura Gail Sullivan of the Municipal Police Employees Retirement System said the stakeholders had reached consensus on many technical points. Representative Freeman moved to report the substitute bill and the motion passed without objection.

What’s next: The committee reported the substitute HB 49 (as amended) favorably. The bill will be placed on the House calendar and proceed to the floor where any further amendments or fiscal review will occur.