There seems to be a rush to judgment relative to the administration’s far-reaching pension proposals which are aimed primarily at the rank-and-file members of the Louisiana State Employees’ Retirement System (LASERS). Much of the rush appears to stem from misinformation claiming that the debt of the pension systems is on an ever-increasing unending rise. It has also been suggested that these proposals will have the effect of dramatically reducing the debt, while at the same time honoring promises made to those taxpayers who have devoted years to public service. There is another misimpression that the retirement system is and has been staunchly opposed to any and all change. Nothing could be further from the truth.
Perhaps it is time to look a bit closer at the facts. Much like a mortgage payment, the state owes a debt to the four state retirement systems; not just LASERS. In decades past, the state did not meet its full obligation to pay the employer share of the benefits being offered. The state owes LASERS about one-third of the amount due. Payment for that debt is designed to be made over a period of time and is on a legislatively created back-loaded payment schedule. To its credit, the state has been making the required payments since the late 1980s.
Even if the proposed pension changes are never implemented, the amount owed to LASERS will actually decrease by a billion dollars in ten years and by nearly four billion dollars in 20 years. That does not mean that true reforms are unnecessary or that the system cannot be improved.
LASERS has supported significant changes to the benefit structure of new hires, which were implemented over the course of the last year. Changes, both statutory and constitutional, that actually will promote the financial soundness of the system have been supported by LASERS.
It should be noted that the various pieces of legislation in question contain a statement that the intent is to attain and maintain the actuarial soundness of the system. Yet each bill includes a provision to reduce the amount of contributions the state would make to the system.
The proposed tax that would increase the employee contributions by 3 percent is not being directed to reduce system debt. It is being used to augment the state general fund.
Are these proposals really honoring the contract and promise made to individuals when the state hired them? That is hardly the case when proposed changes could push retirement eligibility back over a decade for members, with no transition, and no recognition of years of service.
One proposal seeks to change, virtually overnight, the retirement age to 67, and the method of calculating benefits for current and vested employees. That is certainly not the way Social Security phased-in changes for the private sector. Of course, state employees do not have Social Security either.
Under this proposal, long-serving tax-paying individuals working in the public sector could see their pension reduced by as much as 75 percent. This is harsh by any measure.
For new hires, LASERS has consistently stated that a cash balance plan can be a viable option. A cash balance plan is a defined benefit plan. It is not a 401(k) defined contribution plan.
It should be noted though, that the administration’s current proposal can result in additional debt, that the retirement eligibility for the new hires would be age 60, as opposed to age 67 for existing employees, and that there are many aspects of the proposal that are incomplete.
The LASERS Board has voted to try and work with the legislative leadership to see if a cash balance plan can be created that would contain the core retirement plan elements known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, a benefit that cannot be outlived, and survivor and disability protections.
LASERS will continue to work to promote retirement security for our members while attaining actuarial soundness for our system.
Cindy Rougeou is executive director of the Louisiana State Employees’ Retirement System.
JUNE 19 Former Saint Steve Gleason, who is paralyzed by ALS, released a statement Tuesday in response to the Atlanta radio station's skit making fun of him and the disease, this Picayune post reports. What did he say? He said he'd accepted the apology of the DJs who did it, notes that at least the incident has got people talking about ALS, and asks anyone who is burning to take action about it to do so -- by helping him fight ALS.
JUNE 19 Blogger Ian McGibboney takes a look at the Gleason incident in this post. He makes a good argument about the difference between having free speech and being free from consequences for your speech (which none of us is). He also admits that many of us got upset before we listened to the skit -- but lets us know that the reality is far worse than we can imagine. It was the incredibly bad judgment, even more than the actual speech, that probably got those DJs fired, he opines.
JUNE 19 Washington Post blogger Aaron Blake writes about Sen. Guillory's switch to the GOP in this post. He writes what most political watchers in Louisiana know: Guillory was a Republican before he decided to run for the senate seat in a mostly-D St. Landry district, and has switched back now that he plans to run for Lt. Gov. in a mostly-R state. But how come Blake missed Guillory's appearance on a TLC pageant show? Now that is a video we'd like to see. (Again).
JUNE 19 Here's another Washington Post blog post about a Louisiana politician, and it's just plain scathing. Ezra Klein says Jindal's Politico post was "insulting" to the intelligence of voters, and adds that Jindal is personifying the "stupid" he's railed against, by being an "elite" who convinces GOP activists of "things that aren't true." Me-ow.
JUNE 19 Here's Gov. Jindal's post in Politico, in which he asks the GOP to get over losing to Obama (again) and stop "the bedwetting." (Uh, what?) He gives his Republican buddies what is probably a nerd's idea of a coach's motivational talk, which starts with a list of accomplishments that they can't seem to exploit and ending with an absurd description of liberals that sounds like a character treatment for a Fox "News" movie scripted by Gordon Liddy. Sure, he's preaching to the choir, but even the choir's not this gullible.
JUNE 19 Lamar Parmentel read Gov. Jindal's post on Politico, but thinks it was so dumb it probably was published in the wrong paper. This post by Lamar on the Daily Kingfish opines that possibly Jindal's post was destined for the Onion -- because the governor couldn't possibly be serious here. If you listen closely, you can hear the staff of the Kingfish giggling.
JUNE 19 Blogger Robert Mann posts from Turkey, a country he has visited several times in the past few years. Mann gives an interesting overview of the current political and societal climate of the country, which -- if you're living under a rock and don't know -- is experiencing protests and turmoil these days. Mann promises to post as much as he can during his trip, which should be fascinating reading.
JUNE 19 Blogger CB Forgotston says the legislature is keeping the vicious cycle going with its funding of new buildings for the community college/technical college system. Universities across the state need maintenance and improvement on existing buildings, and the solution is to build new buildings at other schools? By the time the bonds are paid off, those buildings will be falling down, too, CB says.
Frank’s Casing Crew, now doing business as Frank’s International, will make its final appearance on ABiz’s list of the Top 50 Privately Held Companies in Acadiana this year, and once again it will likely be at the top with more than $1 billion in annual revenues. The 75-year-old company specializing in tubular fabrication and installation services to the oil and gas industry plans to offer shares of its stock to the public for the first time.
The defeat, or rather highjacking of House Bill 420 in the final days of this year's Legislative Session, say Reps. Vincent Pierre and Terry Landry, is the result of the propaganda spread by one unidentified local media outlet and an unnamed former state Representative, but nothing to do with the original legislation's lack of checks, balances or details.
He’s a singer. A songwriter. A piano man. A family man. He’s even got his own Wikipedia entry. He’s David Egan. And he knows ancient secrets about the monolithic stones of Stonehenge that he’s not willing to share.