A state Senate panel advanced legislation Monday aimed at helping parish school boards struggling with school employee pension costs.
The Retirement Committee voted to alter the payment schedule set for eradication of the Louisiana School Employees Retirement System’s long-term debt.
The change, in Senate Bill 14, would re-amortize $905.69 million on a level payment basis over 30 years so school boards would not be facing major payment spikes down the road.
However, school boards would have to come up with more dollars than currently contemplated in the first five years.
“If you do nothing, it will grow to the range of $138 milllion in 2030 which is almost double” the $71.9 million of today, said actuary Charles Hall.
“Is that the catastrophy you are trying to avoid?” asked state Sen. Elbert Guillory, R-Opelousas, bill sponsor.
“It’s trying to assist the school systems and their budgetary problems,” said Hall.
“We are trying to eliminate the spike,” said Charles Bujol, executive director of Louisiana School Employees Retirement System.
State Sen. Page Cortez, R-Lafayette, said he was concerned how financially struggling school systems would handle the increased payments required in the first five years.
Hall said the impact could be lessened by reducing the payments in the first five years and increasing it slightly over the next 25 years. In addition, excess funds in an account which provides retiree cost of living increases could also be steered into the payments, he said.