Official response from Governor's Office regarding legislative audit report

Official response from Governor's Office regarding legislative audit report




Opponents to reform threaten lots of lawsuits. Every time the status quo knows reform is on the horizon, they sue or threaten a lawsuit.  The report is filled with errors and bases their conclusions on cases from other states which are completely unrelated to Louisiana case law.

The reforms are constitutional. The Legislature has a constitutional mandate to maintain a sustainable retirement system – an obligation which exists both to protect the retirement system and taxpayers.  The reality is that state retirement costs have quadrupled over the last two decades and our pension system is on an unsustainable path. Louisiana taxpayers are spending nearly $2 billion just this year on state retirement and the growth of state pension costs is crowding out critical investments in priority areas. We must act now in order to keep our promise to workers, protect critical services like higher education and healthcare and protect future generations from more debt and higher taxes.

Errors:

·         The report relied on a vague conceptual understanding of the proposals, without an actual analysis of the bill text.
·         The FAC proposal clearly includes a floor which does not retroactively change benefits.
·         The 3% employee contribution bill clearly calls for PRSAC to adopt a revised valuation and employer contribution rate for the coming year, following the passage of the bill. There is nothing in the bill which directs employee contributions to the general fund. The employee contributions would go, as always, to the retirement system.
·         The 3% employee contribution bill is not a tax and is clearly not revenue-raising. The employee contributions remain the employee’s own money; the employee receives the contributions back either in the form of retirement benefits or as a refund of contributions upon termination of employment. In contrast, no one can ever get a refund of the Social Security payroll tax.



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