Tuesday, October 20, 2009

Lawmakers look to change state pension plans

Louisiana lawmakers are considering a sweeping change in the retirement plans given to state government workers and teachers, a shift that would strip the guarantee of a benefit tied to salary and years of service.

State employees and teachers participate in plans the government guarantees to provide lifelong benefits based on years of service and salary, called defined-benefit plans.

The state House and Senate retirement committees heard from the systems and other national groups about defined-contribution plans, which are similar to 401(k)s and require employees to manage their own investments. Employees retire with what they and their employer contribute to the system, along with investment earnings or losses.

Current employees and retirees would not be affected by any plan changes.

Experts from both sides of the issue disagreed Monday on whether a defined-contribution plan would save money, if its portability is a good thing, and if current benefits are too generous.

House Retirement Committee Chairman Joel Robideaux, No Party-Lafayette, said he will have staff research both sides and try to bring hard numbers to a meeting next month, when the joint committee will revisit the issue.

1 comment:

Frank said...

It seems to me that retired, active and future state employees all have a lot to lose it the retirement system is changed. What surprises me is that there are no comments to any of the "change the retirement system" articles.