Allen Reynolds, president of the Retired State Employees Association of Louisiana, asked members of the local chapter Tuesday to help defeat a legislative attempt to change the retirement system for new employees.
Reynolds told the retired state employees that proposed legislation to convert the present defined benefits plan to a defined contribution plan, would be a disaster for the individual retiree as well as for the state retirement systems.
Reynolds said the defined contributions plan transfers all of the risk of the system from the state to each employee.
One of the issues the Legislature is concerned about is the unfunded accrued liability that exists within the retirement system, Reynolds said.
“But frankly, this legislation will do absolutely nothing to address the unfunded accrued liability and, at worst, may increase costs of retirement to the state of Louisiana.
If an employee guesses wrong about how long they are going to live after they retire — say you figure you retire at 60, you’re going to live to 85 — oops, you happen to live to 90 and you planned your retirement for that 25 years, you’ve got a problem,” he said. “You’re going to be awfully poor for five years.”
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