The House Retirement Committee today (May 20th) narrowly defeated a bill to make permanent a requirement that the four statewide retirement systems be required to make 10 percent of their investment trades through Louisiana broker-dealers. Currently, the 10% requirement is contained in a pilot program which is set to expire in 2010.
House Speaker Jim Tucker told lawmakers “I believe that the systems need to support Louisiana businesses, at least 10% ought to be done with Louisiana firms.” Lafayette broker-dealer David Bordes asked the committee to support the measure saying “investing in Louisiana enhances state employment levels and contributes to our tax base.”
Leaders from the Louisiana State Employees’ Retirement System (LASERS), the Teachers’ Retirement System of Louisiana, the Louisiana School Employees’ Retirement System (LSERS), and the State Police Pension and Retirement System opposed the bill, arguing that costs for Louisiana directed trades are more expensive and pointing out that only one other state, Wisconsin, has a mandated in-state trade requirement, one that has not been proven to be cost-effective.
LASERS Executive Director Cindy Rougeou testified that the LASERS Board of Trustees opposes the measure “because it costs LASERS money. If it was good for LASERS, we’d support it. 10 percent is unnecessary because when it makes good sense to deal with local brokers, we will do it.”
Ruston Representative Hollis Downs opposed the measure, saying “The systems’ shouldn’t have to subsidize broker-dealers who don’t do the best job.” The bill was defeated in a 6-5 vote.
Higher Education Furlough/Service Credit Bill Approved
Denham Springs Representative Rogers Pope received unanimous support for his bill to allow higher education employees who may be furloughed through budget cuts to continue to accrue their retirement service credit. The provision would apply to workers who are voluntarily furloughed. University of Louisiana System President Randy Moffett told legislators that of the $67 million dollars in cuts currently facing the system, $9.7 million will be made up by furloughs. Without that option, Moffett said, more employees will face layoffs. The proposal was approved without objection and now goes to the full house.
Consolidation Bill Delayed
A bill to merge the boards and administrations of Louisiana four statewide retirement systems was deferred at the request of author and House Speaker Jim Tucker. Representative Tucker told House Retirement Committee members that he may bring the plan back next week with proposed changes. He added that he’s also considering turning the idea into a study resolution for the coming fiscal year.