Yesterday, the Senate voted 35-0 to suspend implementation of the
current Cash Balance Plan (CBP) which was passed during the 2012 Legislative
Session. The CBP was to go into effect July 1, but with the unanimous passage
of HCR 2
(Harrison), it will be delayed until July 1, 2014. The LASERS Board of Trustees
supported suspension of the plan until the Internal Revenue Service can make a
determination on the equivalency of the plan to Social Security.
Thursday, May 23, 2013
Legislative Update on Cash Balance Plan Bills
New pension plan delayed
Marsha Shuler
Capitol News Bureau
The Louisiana Senate gave final approval Wednesday to a year’s delay in Gov. Bobby Jindal’s new pension plan for future state employees.
The Senate voted 35-0 for a House-passed resolution suspending the law scheduled to go into effect July 1.
House Concurrent Resolution 2 sponsored by state Rep. Joe Harrison, R-Napoleonville, won overwhelming support through the legislative process.
The Jindal administration originally opposed the delay, but reversed course with the filing of the special resolution that can suspend a law without the governor’s approval.
The administration has filed what it calls a “clean up” bill to fix flaws.
“It resets the clock. There are a lot of issues to work out and we need some more time,” said state Sen. Fred Mills, R-St. Martinville.
Jindal’s 401(k)-type “cash balance” retirement plan was approved during the 2012 Legislature.
“Cash balance” is being challenged in court over claims it is unconstitutional. A state district judge sided with the Retired State Employees of Louisiana Association that the measure required a two-thirds vote for passage which it did not get. The case is pending before the Louisiana Supreme Court.
Also pending is an Internal Revenue Service determination on whether the pension plan provides a benefit that is equivalent to that of Social Security. An adverse determination would require the new state employees to be enrolled in Social Security, thereby adding to costs of both employees and government agencies.
The Louisiana State Employees Retirement System opposed the adoption of the plan, noting that it would not provide financial security for state employees who do not have Social Security as a safety net.
Under the “cash balance” plan employees would contribute 8 percent of their pay toward retirement and the state as employer 4 percent.
Interest earned from investments would be credited to the employee’s retirement account with 1 percent withheld to guard against investment losses. As written there would be a 10 percent cap on investment earnings.
The employee could never lose money because of the reserve fund that would make up the difference.
Original report here.
Capitol News Bureau
The Louisiana Senate gave final approval Wednesday to a year’s delay in Gov. Bobby Jindal’s new pension plan for future state employees.
The Senate voted 35-0 for a House-passed resolution suspending the law scheduled to go into effect July 1.
House Concurrent Resolution 2 sponsored by state Rep. Joe Harrison, R-Napoleonville, won overwhelming support through the legislative process.
The Jindal administration originally opposed the delay, but reversed course with the filing of the special resolution that can suspend a law without the governor’s approval.
The administration has filed what it calls a “clean up” bill to fix flaws.
“It resets the clock. There are a lot of issues to work out and we need some more time,” said state Sen. Fred Mills, R-St. Martinville.
Jindal’s 401(k)-type “cash balance” retirement plan was approved during the 2012 Legislature.
“Cash balance” is being challenged in court over claims it is unconstitutional. A state district judge sided with the Retired State Employees of Louisiana Association that the measure required a two-thirds vote for passage which it did not get. The case is pending before the Louisiana Supreme Court.
Also pending is an Internal Revenue Service determination on whether the pension plan provides a benefit that is equivalent to that of Social Security. An adverse determination would require the new state employees to be enrolled in Social Security, thereby adding to costs of both employees and government agencies.
The Louisiana State Employees Retirement System opposed the adoption of the plan, noting that it would not provide financial security for state employees who do not have Social Security as a safety net.
Under the “cash balance” plan employees would contribute 8 percent of their pay toward retirement and the state as employer 4 percent.
Interest earned from investments would be credited to the employee’s retirement account with 1 percent withheld to guard against investment losses. As written there would be a 10 percent cap on investment earnings.
The employee could never lose money because of the reserve fund that would make up the difference.
Original report here.
Monday, May 20, 2013
Latest Study Reveals LASERS Impact on Louisiana’s Economy
The recent release of the Louisiana State Employees’ Retirement System (LASERS) 2012 Economic Impact Study reveals positive information for the State of Louisiana. Key findings show LASERS paid $1 billion to LASERS retirees and beneficiaries in fiscal year 2012, which in turn supported $1.2 billion in economic activity or output in the state. Over 90 percent of LASERS retirees live in Louisiana.
LASERS retirement benefits create economic security for tens of thousands of retired public servants. Louisiana state employees do not participate in Social Security and LASERS provides a modest guaranteed benefit. The average LASERS benefit paid to rank-and-file retirees is $22,236 per year.
“LASERS creates a huge economic footprint in the state,” said LASERS Executive Director Cindy Rougeou. “With over 40,000 retirees and beneficiaries depending on LASERS for their pensions, we are undoubtedly one of the largest ‘employers’ in Louisiana.”
In addition, LASERS has over $90 million invested in Louisiana companies via publicly traded securities and private investments. These investments help support thousands of jobs in Louisiana, providing additional fuel for the economy. One-third of LASERS investments are managed internally, saving millions of dollars per year in professional management fees. LASERS has been recognized as one of the top 10 pension plans in the United States based on a 10-year analysis of investment performance. LASERS realized a 14.3 percent market return for calendar year 2012.
For additional details on how LASERS gives back to Louisiana, read the 2012 Economic Impact Study onthe LASERS website.
LASERS Recipient of Seven Hermes Awards
The Louisiana State Employees’ Retirement System (LASERS) Public Information Division is an award recipient in the Hermes Creative Awards 2013 competition. LASERS submitted seven entries in the competition and were awarded for each. Hermes Creative Awards is an international competition for creative professionals involved in the concept, writing, and design of traditional and emerging media.LASERS won a platinum award for its design of a new employee intranet and four gold awards in the categories of photography, government website, publications, and e-newsletter. LASERS received two honorable mentions in the categories of email communication and government video. There were approximately 5,600 entries from throughout the United States and several other countries in the 2013 competition.
“We are proud of LASERS outstanding achievement in the Hermes competition this year,” said LASERS Executive Director Cindy Rougeou. “This recognition confirms that we are meeting our goal of providing exceptional customer service to LASERS members through our communications efforts.”
Hermes Creative Awards is administered by the Association of Marketing and Communication Professionals and consists of several thousand marketing, communication, advertising, public relations, digital media production, and free-lance professionals. Judges are industry professionals who look for companies and individuals whose talents exceed a high standard of excellence and whose work serves as a benchmark for the industry.
La. Retirement Systems Losing Members
By Marsha Shuler
Capitol news bureau
May 19, 2013
Louisiana’s two largest pension systems continue to lose thousands of active, contributing members, retirement officials said Friday.
So far, this fiscal year, 3,500 people have left the teachers’ system, with more departures on the horizon, said Maureen Westgard, executive director of the Teachers Retirement System of Louisiana.
She said the reductions continue an upward trend since 2010 and could eclipse the 3,700 who left last fiscal year.
The system covers public school teachers as well as college and university professors and other employees.
The Louisiana State Employees Retirement System is going to lose about 7,000 members with the privatization of LSU’s hospitals, LASERS Executive Director Cindy Rougeou said.
Westgard and Rougeou reported their pension systems’ status as the Joint Legislative Committee on the Budget reviewed, then approved their operating budgets for the coming fiscal year.
State Rep. Patricia Smith, D-Baton Rouge, asked about what impact the departures were having on the teachers’ system.
“It’s on a shrinking basis” as fewer people pay dollars that can be invested, Westgard said.
Teachers are leaving at a faster pace than in prior years. Parish school superintendents have said Jindal administration-pushed changes taking place in public education impacting their jobs have contributed to departures.
Westgard said 2,875 TRSL members left in 2010. Between 2011 and 2012, the number jumped from 2,994 to 3,700 — a 24.4 percent increase.
“So far this year we have had 3,501 apply for retirement or pending retirement right now. It should be close to what we had last year” when the fiscal year ends, Westgard said.
With the hospital privatization, Rougeou said LASERS is taking a proactive approach in working with those who will lose their state jobs.
Rougeou said some 7,000 LASERS members are targeted for layoff.
“We are trying to get information on who is to be laid off so we can audit their service credit to see if they are eligible” to draw pension benefits, she said.
“It is a significant issue,” she added.
Rougeou said about 2,000 will likely be eligible for full or reduced retirement benefits.
The two systems combined have about 137,000 members.
State Rep. Regina Barrow, D-Baton Rouge, said there are eight former employees of Earl K. Long Medical Center in Baton Rouge who were within five years of reaching retirement when they were laid off with the hospital closure.
She pressed Rougeou for any assistance LASERS could provide.
Barrow filed legislation trying to create a new pension benefit for those affected by hospital layoffs but it failed in the House Retirement Committee because of costs it would add to LASERS.
Capitol news bureau
May 19, 2013
Louisiana’s two largest pension systems continue to lose thousands of active, contributing members, retirement officials said Friday.
So far, this fiscal year, 3,500 people have left the teachers’ system, with more departures on the horizon, said Maureen Westgard, executive director of the Teachers Retirement System of Louisiana.
She said the reductions continue an upward trend since 2010 and could eclipse the 3,700 who left last fiscal year.
The system covers public school teachers as well as college and university professors and other employees.
The Louisiana State Employees Retirement System is going to lose about 7,000 members with the privatization of LSU’s hospitals, LASERS Executive Director Cindy Rougeou said.
Westgard and Rougeou reported their pension systems’ status as the Joint Legislative Committee on the Budget reviewed, then approved their operating budgets for the coming fiscal year.
State Rep. Patricia Smith, D-Baton Rouge, asked about what impact the departures were having on the teachers’ system.
“It’s on a shrinking basis” as fewer people pay dollars that can be invested, Westgard said.
Teachers are leaving at a faster pace than in prior years. Parish school superintendents have said Jindal administration-pushed changes taking place in public education impacting their jobs have contributed to departures.
Westgard said 2,875 TRSL members left in 2010. Between 2011 and 2012, the number jumped from 2,994 to 3,700 — a 24.4 percent increase.
“So far this year we have had 3,501 apply for retirement or pending retirement right now. It should be close to what we had last year” when the fiscal year ends, Westgard said.
With the hospital privatization, Rougeou said LASERS is taking a proactive approach in working with those who will lose their state jobs.
Rougeou said some 7,000 LASERS members are targeted for layoff.
“We are trying to get information on who is to be laid off so we can audit their service credit to see if they are eligible” to draw pension benefits, she said.
“It is a significant issue,” she added.
Rougeou said about 2,000 will likely be eligible for full or reduced retirement benefits.
The two systems combined have about 137,000 members.
State Rep. Regina Barrow, D-Baton Rouge, said there are eight former employees of Earl K. Long Medical Center in Baton Rouge who were within five years of reaching retirement when they were laid off with the hospital closure.
She pressed Rougeou for any assistance LASERS could provide.
Barrow filed legislation trying to create a new pension benefit for those affected by hospital layoffs but it failed in the House Retirement Committee because of costs it would add to LASERS.
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