The Advocate Opinion Page blasts special retirement legislation

The Advocate Opinion page speaks out against unearned, unpaid-for retirement benefits for select, politically-connected groups of state employees.

Of the 400 or so bills from this legislative session landing on Gov.
Kathleen Blanco's desk, one involving retirement benefits
for probation and parole officers makes you wonder.
How could such a bad idea get so far?


A little background:

Years ago, state probation and
parole officers were given a choice of two
retirement plans.
One provides for a lower rate of growth in benefits in
exchange for an earlier retirement than allowed by another
plan.

In some cases, officers began to realize that
the second plan was a better deal, or the officers decided they
wanted to work longer for the state, so they paid the difference to upgrade their former years of service into the second plan

A bit more than 400 officers remain in the first plan with the lower
benefits-of their own choosing-but they've persuaded the Legislature to require
the state's retirement system to upgrade them to the second plan at no cost to
the beneficiaries.

This is blatantly unfair to their more numerous colleagues, but it also set a terrible precedent for future raids on the retirement systems.

The state already has a huge debt owed to pay for future retirement costs of employees.

House Bill 845 adds to the burden. The governor ought to veto this bill.

And if we were Blanco, we'd call up a couple of committee chairmen and floor leaders and ask them how such a bill got all the way to her desk, forcing her to be a back stop for basic financial good judgement.


The LASERS Board of Trustees has submitted a formal request to Governor Blanco that she veto House Bill 845. The text of the letter, accompanied by documentation of LASERS attempts to educate lawmakers about the dangers posed by HB 845, can be viewed here.

Governor receives request to veto retirement bill

The Louisiana State Employees’ Retirement System Board of Trustees Wednesday asked Gov. Kathleen Blanco to veto a bill that would give a group of 450 probation and parole officers’ retirement benefits they didn’t pay to receive according to this article from Thursday’s Legislative Briefs section of The Advocate.

Lawmakers approved the bill over the objections of the board of the Louisiana State Employees' Retirement System, which sent the letter to Blanco asking her to reject the legislation.

To pay for the benefits, people on probation and parole would have to pay a new $65 fee after July 1, under House Bill 845 by Rep. Sydnie Mae Durand, D-St. Martinsville.

The measure would apply to Department of Public Safety and Corrections officers who chose not to upgrade to a more lucrative retirement plan in 2002. Durand's bill would allow them to get into the plan retroactively, with the cost of the increased benefits financed by the fee. Durand said that would create fairness by treating all corrections officers equally.

LASERS officials said the bill was unfair to officers who paid their own money to upgrade to the newer plan, so lawmakers decided to let those employees get reimbursed for the payments.

But Louis Quinn, with the LASERS board, said that only worsened the bill and threatened to add million of dollars in debt to the retirement system because the probation and parole fee wouldn't cover all the costs of the increased benefits.

LASERS Board opposes House Bill 845

With the passage of House Bill 845, the Louisiana senate voted to place an enormous and completely unjustifiable financial burden on the LASERS trust fund, says Louis Quinn, Legislative Committee Chair of the LASERS Board of Trustees.

HB 845, by Rep. Sydnie Mae Durand, won approval Monday night on the floor of the senate. When debate on HB 845 began, the measure would have granted special retirement benefits to a select group of LASERS members at no cost to the recipients. It made 450 Adult Probation & Parole officers eligible for free service upgrades which would allow them to retire with larger pensions at an earlier age. Hundreds of their correctional officer colleagues had previously paid tens of thousands of dollars each for similar benefits under the two-tiered retirement plan available to many corrections personnel.

“HB 845 was a bad bill when it went to the full senate,” Quinn says. “But the version that won final passage is a train wreck. The select few can continue to enrich themselves, and the retirement system is left to pick up the tab.”

Under an amendment offered by State Sen. Walter Boasso, HB 845 now provides that:

“Any member who is a probation and parole officer in the office of adult services of the Department of Public Safety and Corrections, who is employed before January 1, 2002, who elected to transfer from the primary component to the secondary component and who upgraded his service credit as permitted pursuant to Subparagraph (B)(2)(b) of this Section, may elect to be reimbursed and to have his benefit calculated as provided in R.S. 11:444(A)(2)(c) for all creditable service in the system earned before the date the member transferred to the secondary component."

According to LASERS actuary Charles Hall, this means that LASERS, in addition to bearing the cost of providing unpaid-for retirement benefits to a select group of probation & parole officers, will also have to reimburse this special, select group of Adult Probation & Parole officers who paid to upgrade prior service in a similar fashion.

“The bottom line,” Quinn says, “is that a privileged group will receive free, unearned service credit from LASERS, and the cost will be subsidized by every other hard-working member of LASERS.”

HB 845

UPDATED BELOW

A meeting of the Senate Committee on Retirement is scheduled for the evening of Thursday, June 21, 2007.

NOTICE OF MEETING
June 21, 2007
Upon Adjournment
Senate Committee Room A

LEGISLATION TO BE CONSIDERED

HB 845 DURAND RETIREMENT/STATE EMPS Provides for a higher benefit accrual rate for certain adult probation and parole officers and for actuarial funding for such benefit

UPDATE

The meeting of the Senate Committee on Retirement previously scheduled for Thursday, June 21 was re-scheduled. The meeting is now set to take place at 12:45 p.m. on Friday, June 22. As of this writing, the agenda is unchanged.

Legislative Update

The House Committee on Retirement approved legislation {SB 116, Sen. Theunissen} which authorizes the boards of trustees of LASERS and TRSL to grant a supplemental COLA of 0.5 percent, beginning July 1, 2007, from their respective experience accounts for a maximum of 3.0 percent, which would otherwise be limited to 2.5 percent.

In other action, the committee took no position and recommitted to the House Appropriation Committee {HB 845, Rep Durand}, which would increase the benefit accrual rate for certain adult probation and parole officers to 3.33 percent. The measure provides for a fee on probation and parole cases to offset any actuarial cost to LASERS.

Legislative Update

The House Committee on Retirement approved legislation {SB 116, Sen. Theunissen} which authorizes the boards of trustees of LASERS and TRSL to grant a supplemental COLA of 0.5 percent, beginning July 1, 2007, from their respective experience accounts for a maximum of 3.0 percent, which would otherwise be limited to 2.5 percent.

In other action, the committee took no position and recommitted to the House Appropriation Committee {HB 845, Rep Durand}, which would increase the benefit accrual rate for certain adult probation and parole officers to 3.33 percent. The measure provides for a fee on probation and parole cases to offset any actuarial cost to LASERS.

Legislative Update

The House Committee on Retirement approved legislation {SB 116, Sen. Theunissen} which authorizes the boards of trustees of LASERS and TRSL to grant a supplemental COLA of 0.5 percent, beginning July 1, 2007, from their respective experience accounts for a maximum of 3.0 percent, which would otherwise be limited to 2.5 percent.

In other action, the committee took no position and recommitted to the House Appropriation Committee {HB 845, Rep Durand}, which would increase the benefit accrual rate for certain adult probation and parole officers to 3.33 percent. The measure provides for a fee on probation and parole cases to offset any actuarial cost to LASERS.