By Marsha Shuler
Capitol News Bureau
April 19, 2012
What’s in and what’s out of legislation that would change retirement rules for some 50,000 Louisiana State Employees Retirement System members remains in question days after a state Senate panel approved a heavily rewritten measure, the pension system’s director said Wednesday.
The latest version approved by the state Senate Retirement Committee on Monday remained unavailable, with system executives waiting to get an official version so they could assess its full impact on members, said Cindy Rougeou, executive director with Louisiana State Employees Retirement System, or LASERS.
The legislation, part of Gov. Bobby Jindal’s pension revamp effort, started out raising the retirement age to 67. The committee substantially revamped the bill in committee to reflect a two-step benefit plan under which employees keep benefits accrued to date and then start a new one based on age and years of service.
Neither officials of LASERS nor the Teachers’ Retirement System of Louisiana, whose higher education members would be included, said they were consulted ahead of time on the new plan.
“They adopted a substitute (bill) then amended the substitute subject to what the will of the committee was. I don’t know what that means but it’s going to be interesting,” Rougeou said.
Rougeou was one of four speakers who participated in a League of Women Voters forum Wednesday addressing the topic of proposed pension changes. All but one of the forum speakers were critical of the Jindal administration and legislators’ actions.
The pension systems contend the proposed changes to existing employee retirement plans are unconstitutional because they break contracts.
State Rep. Kevin Pearson, the Slidell Republican who as chairman of the House Retirement Committee sponsors several of Jindal’s retirement bills, got the brunt of the questions from a largely state employee and retiree crowd.
State Senate Retirement Committee Chairman Elbert Guillory, D-Opelousas, whose committee attracted criticism, was scheduled to participate but league officials said he sent word that he got tied up in a committee meeting at the Capitol. It was Guillory’s age 67 revamp that drew the most questions.
Pearson said steps must be taken to curb escalating pension system debts that are taking more and more money away from health care and education in the state budget.
“We are working on these things. The reason why these things were adjusted and tweaked is we have listened to what others have said,” Pearson said. He said he expects more changes to come.
But Pearson said, “Many of us are concerned we cannot keep going down the road we have been going.”
“If we don’t do something, you could lose your job,” Pearson told the crowd at one point.
Pearson underscored the unfunded accrued liability — now projected at $18.9 billion — for Louisiana’s four-statewide retirement systems for employees with state government, teachers, state police and school systems. Called the UAL, unfunded accrued liability is the difference between the systems’ assets and long-term financial liabilities associated with promised benefits.
LASERS is responsible for 35 percent of the debt, Rougeou said. “Why target 35 percent when you are talking about the UAL and only a subsection of that?” Rougeou said, noting what she called the discriminatory nature of the administration’s effort. She said there should be a “comprehensive approach.”
Rougeou said the $18.9 billion figure is “a snapshot in time.” She said LASERS is getting ready to recognize “excellent (investment) gains we have had,” which will improve its UAL picture.
Former Senate Retirement Committee Chairman Butch Gautreaux criticized senators and the Governor’s Office for “a total lack of understanding on what the (revamped age 67) bill does” and senators for passing the bill on anyway. He called the action “irresponsible.”
Former Civil Service Director Allen Reynolds said he is concerned that the legislative process “has been so quick that we really don’t know what these changes are.”
“My concern, given my background, has always been the impact on the existing work force,” Reynolds said. “55,000 people are going to have to make difficult life decisions in a very short period of time.”