Gov. Bobby Jindal wants to modify the retirement plans of thousands of state employees — for the worse, many of them believe — even as he reforms his personal retirement plan for the better. By Jeremy Alford
It wasn’t exactly a secret that the administration was tinkering with public pension proposals. Gov. Bobby Jindal’s policy advisers were dropping hints about it over the Christmas holidays, and by the turn of the year holding meetings with obvious supporters. Jindal finally unleashed his plan Jan. 25 during a Baton Rouge Rotary Club luncheon.
But three weeks earlier, as his staff prepared legislation to drastically alter Louisiana’s pension programs, Jindal made changes to his own retirement plan. According to documents released by the Louisiana State Employees’ Retirement System, Jindal added 2.2 years worth of service to his own plan Jan. 4.
Five days later he would be inaugurated for a second term. And all the while, he was developing proposals that would come to ask state employees to contribute more and address the state’s looming $18 billion worth of retirement debt. Jindal has even proposed increasing the retirement age — this, after he has accelerated his own retirement date.
On paper, the retirement transaction means that Jindal is halfway finished with his second term, which technically spans four years and just started the second week of January. Don’t understand the math? It’s all in the wording. Tonja Normand, LASERS’ public information director, explains: “Together, the 2.2 years of credit restored and the four years earned during his first term as governor total about 6.2 years of service,” she says.
On the page, as in the digital and inked sort that craft public opinion, this revelation may not bode well for Jindal in the short-term, especially as he advances his reform agenda. Jindal spokesman Kyle Plotkin says LASERS has a process for repurchasing and restoring credit and the governor simply chose to exercise that option. “It has nothing to do with the changes,” he says, referring to the governor’s proposed legislation.
Baton Rouge blogger Tom Aswell, who holds forth from LouisianaVoice.com, was the first outfit to post the public documents, which in turn sent a handful of mainstream reporters tiptoeing over to LASERS to score confirmations. “This would appear to be yet another shameless display of Jindal’s total contempt for state employees and his relentless agenda of self-promotion,” Aswell wrote in a post last week.
Jindal, however, followed all state guidelines and didn’t break any laws. The 2.2 years of service added back into his plan were originally earned by Jindal from 1996 to 1998. That’s when he served as secretary of the Department of Health and Hospitals under former Gov. Mike Foster.
When Jindal left the secretary’s post to head up the National Bipartisan Commission on the Future of Medicare, he also requested a “refund of employee contributions,” which state employees often do if they’re leaving the public sector and exiting LASERS for good, or at least the foreseeable future. After all the proper paperwork was complete, Jindal got his contributions back, which amounted to roughly $15,000 — he didn’t reap interest or investment earnings.
Here’s LASERS’ interpretation of how Jindal came to restore the same credit and place it into his retirement plan as governor: “In order to reestablish forfeited creditable service, a former member must again be employed in state service and be a contributing member of the system for at least 18 months. The member may then repay the refund plus interest as established by law.”
Before the ongoing regular session started, Jindal paid more than $42,000 to boost his service time to 6.2 years. According to LASERS’ own guidelines, increasing credit in a plan “may qualify a member for earlier retirement eligibility and/or an increase in monthly retirement benefit.”
Whether those perks will eventually outweigh Jindal’s $27,000 payment — essentially the cost of adding back in 2.2 years — remains to be seen. It all depends on how long Jindal will be a member of LASERS and what his future salaries will look like. Even bad investments could come to skew the results.
But possibly more telling, about the plan’s future performance and the man himself, will be what kind of pension changes are signed into law by Jindal’s pen. That at least could help us decipher his latest moves and better understand his intentions, even if we don’t like what we eventually learn.
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