The Louisiana House has kept alive the potential of a cost-of-living increase in pension checks for more than 100,000 retired state employees and teachers.
The House voted 64-25 to direct its Retirement Committee to send legislation granting a 1.5 percent increase to the full House for debate. The 1.5 percent amounts to less than an average $30 a month for the retirees. The measure, sponsored by state Rep. Sam Jones, has 73 House co-sponsors. But House Bill 42 could not get a majority vote to get it out of the Retirement Committee. The panel deadlocked 6-6.
Jones asked the House to force the committee to report the bill by May 14, and his colleagues complied. “Everyone here deserves to hear the full debate,” the Franklin Democrat said.
Jones encountered opposition from some Retirement Committee members who argued that the cost-of-living adjustment, or COLA, runs counter to a law passed in 2014 designed to strengthen the finances of the retirement plans.
Under the law, more of the retirement systems’ excess investment earnings will go toward reduction of long-term debts before dollars are put into the special accounts from which COLAs are granted. The changes limited both the frequency and amount of future retiree benefit hikes until systems hit certain unfunded accrued liability levels. Retired state employees, teachers, school employees and State Police got a cost-of-living increase last year but under the new law were not to get one in the coming year.
The COLA accounts of the pension systems have the $350 million in them necessary to cover the pension check raise.
Jones said the financial condition of retirees — many already living on limited fixed incomes — has changed for the worse because of increased health insurance premiums and copays. “They can’t pay for medicine,” he said, adding that he thought the double-digit increases in retirees’ state Group Benefits insurance plans caused by administration was “mismanagement.”
Retirement Committee Chairman Kevin Pearson said the teachers retirement system and the state employees system are far short of having the dollars to cover their long-term liabilities. Teachers is 57 percent funded and state employees, 59 percent, the Slidell Republican said. He also said the systems’ investment earnings are down for the current fiscal year.
“We are on target, have a trajectory” to improve those numbers, Pearson said, as he urged the House to reject Jones’ motion.
“We have to think about the full pension payment for our future retirees,” said state Rep. Greg Miller, R-Norco.
Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog.