By Marsha Shuler
Cost of living increases appear to be on the horizon for some 100,000 state employee, teacher, school employee and state police retirees.
The proposed 1.5 percent increases — the first in six years for some — cleared the Senate Retirement Committee on Monday.
The raise must be approved by a two-thirds vote of the Legislature and the governor before it can be implemented.
Money to fund the cost of living adjustment comes from special “experience accounts” of each of the four statewide retirement systems. The accounts are funded from excess investment earnings of each of the pension systems.
State Sen. Elbert Guillory, R-Opelousas, linked the fate of the four system COLAs together. Under the change, if one group’s COLA does not garner sufficient votes, no one would get a COLA.
“We are all in the same canoe and we want these COLAs to be above any political games that may be played through the system,” Guillory said.
Guillory said pensions have been “eroded by time and inflation” for retirees. He said the COLA is “far from a giant step,” but one made possible through pension systems’ prudent investments and good market returns.
The COLA would mean about a $29 a month increase in the pension checks of some 35,000 retirees of the Louisiana State Employees Retirement System. Retirees must be at least age 60 and retired for a year. It will take $105 million of the $196 million in LASERS experience account to cover the cost. The COLA is in Senate Bill 18.
The Association of Retired State Employee executive director Frank Joubert said there has been a 13 percent increase in the consumer price index since 2008 — the last time retirees got a pension increase. “The cumulative effect for six years is very devastating,” said Jobert, noting the rising cost of food, medicine and gasoline.
Some 64,000 retirees of the Teachers Retirement System of Louisiana would also be eligible for a $29 per month pension check increase via Senate Bill 21. The increase will cost $203 million and is funded through an experience account that has a $219 million in it.
About 11,000 Louisiana School Employees Retirement System retirees would get an average $14 a month increase through SB19. The system’s experience account contains $31 million and $15.9 million will be used to fund the increase.
Senate Bill 16 funds the same 1.5 percent increase for retired State Police.
The four bills now move to the Senate floor for debate.