Thursday, March 11, 2010

Pension proposal called a "disaster"

Proposed changes to the retirement system for state employees could be "a disaster," a top official with the Retired State Employees Association told a group of retirees on Wednesday.

RSEA Executive director Allen Reynolds spoke out against efforts to change from a defined benefit to a defined contribution system for state employees. The change would not affect any current retirees, but could affect benefits for future generations, Reynolds said.

"Such a plan would be a disaster for our retirement system in the long run," Reynolds said. "We don't think that's going to be good for the state, the retirement system or you as a retiree."

Under a defined contribution system, employees would pay into a retirement account, similar to the way many people pay into a 401(k). They would be responsible for planning and managing their account, and would be guaranteed benefits after retirement only until their account balance runs out.

"Creating generations of impoverished seniors seems to me to be a questionable public policy, especially when it's not going to save the state any money," said Louisiana State Employees Retirement System executive director Cindy Rougeou.

The proposed change will be introduced by Rep. Jim Tucker, R-Terrytown, speaker of the House of Representatives, Reynolds said. The bill has not been formally filed, but Reynolds and Rougeou urged members of the Acadiana RSEA chapter to rally against it.

"Your benefits are safe and secure, but we need to preserve the integrity of this plan going forward so it remains that way," Rougeou said. Your involvement in the upcoming legislative session is essential."

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