When the Louisiana Legislature convenes in April, it will be tackling an old, familiar topic: retirement.
Of the 90 bills that have been pre-filed in the House and Senate, 40 of them deal with that very subject—many of them aimed at getting a handle on spiraling costs. Rep. Kevin Pearson, R-Slidell, who chairs the House Retirement Committee, is authoring a handful, including one that would require employees of the four state retirement systems to begin contributing an additional 1% in 2015 and another 1% in 2017 to help pay off a portion of the unfunded accrued liability.
That same bill proposes that pension benefits for all teachers and state employees be determined based on the five highest years of compensation, rather than three years as currently. Pearson notes some statewide pension plans have already made that move in an effort to keep rising employer contributions in check. He says it could help avoid further cuts to state jobs.
“I know it’s not going to be popular,” Pearson says. “I could easily sit back and do nothing. People say, ‘Oh, you’re going to get sued.’ I welcome the lawsuit. Please bring it. That’s the way I feel. I want to know; I think they don’t. I think they’re afraid and they want to kill it at any chance. Other systems have already done this; why can’t we as the state?”
Another of Pearson’s bills would require that any school systems that decide to privatize their operations or pension plans continue paying their portion of the unfunded accrued liability to the Teachers’ Retirement System of Louisiana. Other systems already have such requirements so that remaining participants aren’t saddled with the bill, but TRSL does not.
“The UAL is something that people have referred to as something that’s going to just take us down, and I’m determined to do something to make sure that it doesn’t somehow,” Pearson says. “I don’t have a problem with privatization. But you can’t leave your liabilities behind for someone else to pay.”
Sen. Elbert Guillory, D-Opelousas, who chairs the Senate Retirement Committee, has a few bills of his own, including one requiring that 2% of any state revenue collections in excess of fiscal year 2011-2012 levels be dedicated to liquidating the UAL and funding benefit increases for state retirees.
Republican Rep. Kirk Talbot of River Ridge has filed a bill that would suspend pension benefits for certain retirees in any Louisiana public pension system re-employed by a participating employer. The proposed law would also prohibit the accrual of additional retirement benefits during re-employment.
There are also a few bills proposing cost-of-living raises for retirees, and one that tweaks the cash balance program legislators passed in the last session that is currently the subject of a lawsuit. Read a recent Business Report cover story on the cost of state pensions here.
