- Associated Press - Tuesday, May 20, 2014

BATON ROUGE, La. (AP) - Lawmakers have rewritten the rules for how the state’s retirement systems will offer pension payment increases to retirees.

They agreed to give a 1.5 percent cost of living adjustment to about 100,000 retired state workers, teachers, school employees and state troopers under the current rules, the first increase for most of the retirees since 2008.

But lawmakers tied that pension bump to a bill by Rep. Joel Robideaux, R-Lafayette, that makes it more difficult to get such COLAs in the future. The measure is an effort to pay more money toward the state’s multibillion-dollar retirement debt.

Gov. Bobby Jindal’s office said the Republican governor signed the cost of living adjustments into law last week. Robideaux’s bill revamping the COLA rules was given final passage by the state Senate on Monday and heads to Jindal, who supports it.

The effort to rework the pension payment increases received unanimous support in both the House and Senate.

The four state retirement systems have a $19 billion gap between the money they have on hand and the dollars they’ll owe all retirees over time.

Under Robideaux’s bill, when the retirement systems have better-than-expected investment gains, more of that money will be steered to pay debt instead of pension benefit increases, until the systems are better-funded.

The maximum COLA that can be given will grow as the system funding grows.

Sen. Elbert Guillory, R-Opelousas, chairman of the Senate Retirement Committee, said the bill will have the state paying off the oldest retirement system debt six years sooner than expected and will reduce interest payments on the debt by $5 billion over 30 years.

Robideaux described his bill as “an attempt to make the systems a little bit more sound going forward.”

He said when the systems have more money, they can give larger and more regular boosts to pension payments. Robideaux noted that only nine such increases have been doled out over the last 21 years.

“I think it’s the legislators’ responsibility to make the systems as sound, as fiscally sound as we possibly can, while balancing that with the needs of our retirees. I think that this type of reform bill does that,” Robideaux said.



House Bill 1225 can be found at www.legis.la.gov

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