While the 2017 Regular Legislative Session ended in gridlock on the state budget, action on policy changes for the state and statewide retirement systems came a to a desirable conclusion for the year.
Louisiana’s state pension systems are critical to working families and retirees across the state, and also serve as key economic drivers in every city, town and parish in Louisiana. Particularly in rural areas, public pension benefits are a substantial source of the personal income and economic activity.
In 2015, no state moved away from defined benefit pensions, meaning that workers across the country will be able to retire securely.
At the mid-point of 2016, states and cities expand access to pensions!
NPPC has created summaries of state fights to protect public pensions and retirement security in 2016. Click this link to see what various states accomplished this year.
A lot of retired teachers, troopers, school workers and state government employees will start seeing slightly bigger monthly pension checks starting July 1.
Gov. John Bel Edwards on Thursday signed into law a cost-of-living adjustment for nearly 125,000 pensioners who are over the age of 60 and have been retired at least a year. Most live in the Baton Rouge and New Orleans areas. It’s the first increase in two years.
Senate Bill 2, now called Act 93, distributes the cost-of-living adjustments, called COLAs, based on calculations that rely on the funding levels of the individual retirement systems.
Members of the Louisiana State Employees’ Retirement System are in line for a 1.5 percent increase on the first $60,000 of their benefits. Teachers Retirement System of Louisiana members will receive a 1.5 percent hike.
Louisiana School Employees’ Retirement System members get a 2 percent raise as do those with the Louisiana State Police Retirement System. A number of State Police retirees over the age of 65 also are eligible for another 2 percent increase.
Read more of this article by Mark Ballard at The Advocate.
Sweeping reforms to the way the state government pays its retired employees were withdrawn Thursday when the sponsor for the four-bill package said he saw the writing on the wall.
Central state Rep. Barry Ivey, who sponsored the four bills that would have worked in concert, said the central point is to change state government retirement from a traditional system that pays retirees a monthly benefit for the rest of their lives to a hybrid model that would include both a pension and a 401(k)-type program, in which the retiree gets only the money invested over time plus any earnings.
Ivey, a Republican, said his plan would put the retirements of state employees more in line with what is offered in the private sector. At the same time, Ivey argued that the hybrid plan would cost taxpayers less and chip away at the near $20 billion difference between the promises made to retirees by the state and the amount of money available to pay those debts, which is called unfunded accrued liability.
Critics, and there were many attending the hearing, disagreed, saying the revamp would cost new state employees more while lowering their benefits in retirement.
Even as lawmakers struggle with the possibility of deep cuts to state services, the road to a bump in the monthly pension checks for nearly 125,000 state retirees and their survivors — living mostly in the Baton Rouge and New Orleans areas — begins Monday when a Louisiana Senate panel is scheduled to take up a cost of living adjustment bill.
“They’ll get a COLA because there’s enough money, but the funding mechanism means different amounts,” said Senate Retirement Committee Chairman Barrow Peacock, R-Shreveport.
In Peacock’s Senate Bill 2, pensioners over the age of 60, who have been retired for at least a year and are drawing checks from one of the four state systems, would receive, starting July 1, a 1.5 percent increase for state workers and teachers; 1.8 percent bump for public school employees; and 2 percent more for State Police. It calculates out to an average increase of about $30 per month for retirees, but the exact amounts are difficult to determine and depend on many variables.
If approved, it would be the first increase in two years.