The House Retirement Committee today (May 13th) sent several bills affecting state retirement benefits on to the full house for debate.
Slidell Representative Kevin Pearson received a favorable vote for HB 96, a measure that would allow state and statewide systems a retirement option with guaranteed annual 2.5 percent cost-of-living adjustments (COLAs). “This is simply an option,” Pearson told the panel, “Something that has zero fiscal impact.” A retirement system member would receive an actuarially reduced benefit to fund the COLAs. Additionally, any COLAs granted by the system would be paid to the retiree. The option would be available to new retirees. A member would have to be 55 or older to receive the COLA.
An Early Retirement Plan that’s been on and off the books since 2001 was approved at the urging of Thibodeaux Representative Dee Richard. It provides for early retirement for members of the Louisiana State Employees’ Retirement System (LASERS) with an actuarial reduction of benefits and requires abolition of positions vacated under early retirement. Members would be allowed to retire at age 50 with at least 10 years of service credit.
Minden Representative Jean Doerge won the backing of the panel for a proposal that would grant a minimum benefit increase to certain retirees, beneficiaries, and survivors who receive a monthly benefit of less than $1200 a month. As of June 30, 2008, statistics show that 13,376 members of the Teachers Retirement System of Louisiana and 5,137 LASERS retirees receiving a benefit below the federal poverty line. Other requirements for the benefit increase include 30 or more years of service credit, excluding unused leave; retired for 15 or more years; at least 60 years of age and did not participated in the Deferred Retirement Option Plan (DROP) or Initial Benefit Option (IBO). The proposal was backed by several state retirement groups, including LASERS.
The committee narrowly approved a HB 290 by Representative Doerge which allows a reemployed retiree to select his current spouse as beneficiary for the purpose of any supplemental retirement benefit if a former spouse was selected as a beneficiary upon his initial retirement.
Cindy Rougeou, Executive Director of the Louisiana State Employees’ Retirement System opposed the change, pointing out that the decision to select a beneficiary is irrevocable because “that is the basis for the financial soundness of the system. This puts a crack in the door to start allowing people to change their beneficiaries.” Rougeou added it would be “changing rules in the middle of the game.” The LASERS Board of Trustees opposes the legislation.