Wednesday, December 2, 2009

Retirement Plan funding reviewed

With the state’s public retirement system debt increasing $4.8 billion during the past year, state officials said the pension program has to change.

The Louisiana House and Senate retirement committees have been meeting jointly to study whether a new system of paying retired state government workers — such as, private 401(k)like plans, called “defined contribution” plans — would be better than the current “defined benefit” plans, which guarantee lifelong benefits to state retirees. Any changes would only affect new hires.

Paul Richmond with the legislative auditor’s office said the majority of state employees and teachers fund their own pension plans through their contributions. Some plans, such as those for some law enforcement agents, are more costly, he said.

Cindy Rougeou, director of the state employees’ retirement system, said she is pushing one plan for hazardous-duty employees that will help the system control costs.

House Retirement chairman Joel Robideaux said the committees have a lot of information to digest before they start making recommendations. The committees were asked to submit a report to the Legislature before the 2010 session.

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