A Senate panel Monday killed legislation that would have reduced the pension benefits of many current state employees, teachers and others in some state or statewide system retirement systems.
The Senate Retirement Committee voted 4-2 against passage of the legislation, which state Sen. Barrow Peacock, R-Shreveport, said he sponsored to improve the financial health of the pension plans.
“I’m doing this because I feel like we have to address our pension problems,” he said. “We have to make them sound.”
Opponents said the legislation had the same constitutional problem as pension revamp efforts Gov. Bobby Jindal failed to pass last year, changing current employees contracts with their employers.
“All this does is invite litigation,” said Robert Klausner, private attorney for the Louisiana State Employees Retirement System and the Teachers Retirement System of Louisiana. “What this bill is going to do is waste taxpayer money. ... What this bill says is we do not honor your service.”
The two major state retirement systems — the Louisiana State Employee Retirement System and the Teachers Retirement System of Louisiana — have unfunded accrued liabilities of $18 billion. Most of the debt relates to prior governors and legislators approving benefits without the dollars to pay for them.
Peacock’s Senate Bill 7 would have calculated pension benefits based on the final 60 months of employment instead of the final 36 months and would have limited excessive annual pay raises in those calculations. The changes would have effectively reduced the pension checks of the employees.
As voted on by committee, Peacock’s legislation impacted members of eight state or statewide retirement systems.
Peacock exempted the clerks of court, district attorneys, registrars of voters and municipal retirement systems, all of which have adopted the 60-month final average compensation for all their members. The committee agreed to add the sheriff’s pension plan to exempted plans, with Peacock saying it is in better fiscal shape than others.
The committee rejected an attempt to excise the State Police Retirement System and Department of Wildlife and Fisheries members of LASERS.
Pension systems have done many things to reduce future pension system costs, including adopting for new employees the 60-month final average compensation and implementing “anti-spiking” provisions limiting late career raises, retirement system executives said.
“We are doing the things we can do under the constitution,” said LASERS executive director Cindy Rougeou. “When you change in midstream ... it’s a disservice to them (employees),” said State Police Col. Mike Edmonson.
Voting FOR reducing pension: Sens. Peacock and Conrad Appel, R-Metairie.
Voting AGAINST SB7: Sens. A.G. Crowe, R-Slidell, Jonathan Perry, R-Abbeville, Gerald Long, R-Winnfield; and Page Cortez, R-Lafayette.