Facts and Myths about the Proposed Benefit Increase for Retirees: HB 42 (Rep. Sam Jones, D-Franklin)

A cost of living adjustment (COLA), also referred to as a Permanent Benefit Increase (PBI), has been proposed for some retired state workers. Here's what you should know about it. 

Facts about the proposed COLAs:

·      HB42 (Rep. Jones) will provide for 1.5% COLAs for retired state employees (LASERS), Teachers (TRSL), School Employees (LSRS), State Police (LSPRS) are fully funded and have a $0 impact on the state general fund.

·      The proposed PBI for retirees in these systems would provide for an average of $30 a month in increased pension benefits.

·      This increase will be dwarfed by the increases in Office of Group Benefits (OGB) health insurance increases for these workers - $58 dollars per month for family premiums, increased copays and increased prescription drug copays.

·      Because members of the four state systems impacted by HB42 do not get social security, they do not get inflation adjustments or increased social security or any other retirement benefit outside of their public pension.

Myths about the proposed COLAs:

·      Taxpayers pay for COLAs.

o   Cost of living adjustments/permanent benefit increases are funded with investment earnings of the contributions that employees make into the retirement systems

·      COLAs undo the Reforms that have improved the funded ratio of the systems.

o   Since COLAs are fully funded through the experience account, they do not reverse any of the savings realized through recent reforms like changes to the final average compensation, moving to entry age normal and changing the retirement age.

·      Retired State Workers, Teachers and School Employees, and State Police don’t need a cost of living adjustment.

o   With increases in health insurance and other household costs, and with members of some of our retirement systems living below the poverty line even after 25 or 30 years of service, this COLA is much needed.

o   In many parishes, public pension income is the number one source of income. For this reason, this modest increase in monthly income will have a big impact on local economies.


Click below to contact your legislators and urge them vote for HB 42, a fiscally responsible way to impact local economies and bring more dignity to retirement for state workers!