Thursday, May 6, 2010

Retirement Issues in Spotlight Next Week at the Capitol – by Robyn Ekings

Several key bills affecting Louisiana public retirement systems are set for committee hearings next week. On Monday afternoon, May 10th, the Senate Retirement Committee is scheduled to meet to review proposals that include bills calling for forfeiture or garnishment of retirement benefits of public employees or elected officials convicted of a felony act associated with his/her office. The Louisiana State Employees’ Retirement System (LASERS) Board of Trustees supports one of these measures, SB 13 by Senate Retirement Committee Chairman Senator Butch Gautreaux. The LASERS Board opposes bills calling for forfeiture of benefits due to federal constitutional concerns.

As written, SB 13 includes a provision that the pension or retirement benefit of an elected official may be garnished or seized to pay any fine or restitution imposed as a penalty for conviction of a felony associated with his office. The bill would retain the present law that provides for protection of a spouse’s community property interest in the public retirement or pension benefit of a member or retiree of a state or statewide retirement system.

The panel is also set to hear SB 632 by Senator Gautreaux which seeks to provide permanent increases in retiree benefits for the four state retirement systems, LASERS, the Teachers’ Retirement System of Louisiana (TRSL), the Louisiana school Employees’ Retirement System (LSERS) and the State Police Pension and Retirement System. The proposal currently calls for increases for members of those systems who are retired as of June 30, 2010, generally providing for a 2% benefit increase for eligible retirees in every odd-numbered year beginning in 2017. The LASERS Board of Trustees voted to work with Senator Gautreaux on this plan.

On the House side, several high profile bills affecting the four state retirement systems will be heard in the House Retirement Committee on Thursday morning, May 13th. House Speaker Jim Tucker is backing HBs 930 and 931, a bill and a proposed constitutional amendment to shift new employees of the four state systems into a 401(k) styled defined contribution plan, instead of the current defined benefit plans. The LASERS Board of Trustees strongly opposes this change. Lafayette Representative Joel Robideaux is backing a lengthy bill that would make a long list of changes to the systems for employees hired after January 1, 2011. HB 1337 includes changes to employee contributions, final average compensation, and retirement eligibility. The LASERS Board of Trustees supports this bill.

And, Speaker Tucker is also the author of HB 1229, set for hearing on Thursday. It would consolidate the investment operations of the four systems, and create a new state commission to manage the systems’ money. The LASERS Board of Trustees opposes this measure.

Other bills to be considered by the House Retirement Committee include HB 189 by Representative Dee Richard which would allow retirement with 10 years at age 50 with an actuarially reduced benefit, HB 958 by Representative Ligi which would implement a 10 year period to calculate final average compensation, a number of forfeiture bills.

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