Thursday, August 16, 2012

RSEA Files Lawsuit Challenging Constitutionality of Cash Balance Plan

Attorneys representing the Retired State Employees Association (RSEA) filed a lawsuit Thursday, August 16 in the 19th Judicial District Court in Baton Rouge challenging the constitutionality of House Bill 61, which became Act 483 of the 2012 Louisiana Legislative Session. The act, known as the Cash Balance Plan, affects future non-hazardous duty state employees of LASERS, post-secondary education members of the Teachers' Retirement System, and is optional for certain Louisiana School Employees' Retirement System members. The plan would not take effect for these new hires until July 1, 2013.
RSEA and their attorneys, Robert "Bob" Tarcza of New Orleans and Robert "Bob" Klausner of Plantation, Florida, reached the conclusion that Act 483 required a two-thirds vote for passage, rather than a simple majority. The Louisiana Constitution, Article X - Section 29(F), mandates a two-thirds vote when an actuarial cost is associated with enactment of benefit provisions for members of a public retirement system. The Legislative Actuary had determined that the Cash Balance Plan would have an actuarial cost. The bill passed in the Louisiana House of Representatives by a simple majority, but lacked the required 70 votes of the elected members.

The lawsuit is entitled The Retired State Employees Association, Frank L. Jobert, Jr., et al vs. State of Louisiana, Honorable Governor Bobby Jindal and Honorable John Neely Kennedy, State Treasurer.

LASERS will share more information as it becomes available.

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