BATON ROUGE, La. (AP) - Amid opposition from Gov. John Bel Edwards, Louisiana’s state worker retirement system is shelving its bid to create a new pension plan for future rank-and-file employees that would incorporate a 401(k)-style investment account.
Maris LeBlanc, deputy director and chief operating officer for the Louisiana State Employees’ Retirement System, said Monday that the system known as LASERS won’t continue to push the legislation , which awaits debate on the Senate floor after advancing through two Senate committees.
“We will not pursue (the bill),” she said.
Efforts to pass the measure seemed futile. Edwards spokesman Richard Carbo said the Democratic governor opposes the proposal, along with unions that say it would give workers a lower benefit at a higher cost.
Current employees pay into a retirement system that promises them a monthly check upon retirement based on salary and years of employment, if they reach certain eligibility benchmarks.
The proposal created by LASERS is sponsored by Senate Retirement Chairman Barrow Peacock, a Shreveport Republican. It would create a hybrid pension, shrinking the monthly check, adding the investment account and raising the retirement age for rank-and-file state workers hired starting in 2020. Eligibility to receive that monthly check would be pushed back to age 65, rather than the current ages of 60 or 62.
Supporters said the change would reduce pension debt buildup while giving a more portable pension benefit to state workers who often leave before they reach retirement eligibility. They touted a provision that built cost-of-living adjustments into the new hybrid plan.
Cindy Rougeou, LASERS executive director, called it “a new retirement plan for a new generation.”
Treasurer John Schroder, a Republican former lawmaker, criticized Edwards’ opposition and lamented the shelving of the proposal.
“The bill would have created a better structure and long-term outcomes for state employees and the retirement system as a whole. This is why the public doesn’t trust government,” Schroder said in a statement.
Opponents disagreed with shrinking the financial value of retirement benefits offered to state workers, who aren’t in the federal Social Security system, and shifting more of the cost risks to employees. They also raised concerns about the measure’s upfront costs to the state, about $10 million over the first five years.
The switch to the new pension plan wouldn’t apply to law enforcement or other workers deemed to be in hazardous duty positions, judges, teachers or public school employees.
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Senate Bill 14: www.legis.la.gov
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