PAR releases analysis of Jindal's cash-balance retirement proposal
The Public Affairs Research Council of Louisiana has released an analysis of the governor's proposed cash-balance retirement plan for new hires in state government service. In it, PAR recommends the state seek opportunities to lower taxpayer risks in the long run by considering new types of retirement plans for a new generation of state workers. Although a new plan would not remedy the state's existing unfunded accrued liability, it could provide a new retirement platform with less risk of repeating prior mistakes, PAR says. "A new retirement plan should be less volatile and more pragmatic from the taxpayer point of view while also being fair and offering greater flexibility to new employees," says PAR President Robert Travis Scott. Gov. Bobby Jindal's cash-balance proposal is being presented as a candidate to fulfill this role. If passed, it would over time replace the existing defined benefit plan as the primary retirement program for most state workers. It would be unique among public sector plans, as few other state or local governments have adopted cash-balance plans, and Jindal's appears to be the first to base employee interest credits on a rate of return tied to market performance, PAR says. See the complete 12-page report from PAR here.
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