Potential conflicts and a growing interest in hedge funds have some eyeing Louisiana’s public retirement systems with renewed skepticism.
The complex nature of the retirement system tends to obscure the importance of pension reform. This has contributed to an unfortunate lack of urgency over the years. But while the details can appear daunting, the crux of the matter is simple: Louisiana has promised its retirees more than it can deliver.
Gov. Bobby Jindal’s proposals to boost employee contributions, alter benefit calculations and increase the official retirement age will soon undergo substantive changes during floor debate in the Upper Chamber.
Critics of Governor Jindal’s proposed “cash balance” pension plan for state employees have made a number of inaccurate claims. The current retirement systems have amassed an astonishing $18.9 billion in unfunded liabilities, but reform opponents defend the status quo with scare tactics while relying on a flawed report from the Legislative Auditor.
A retire-rehire program for teachers was approved by lawmakers 10 years ago, but today more than half of all participants are non-educators, while annual pension payouts are nearing $250 million
MPERS gambled with public money, and lost. If this were a private company, these disastrous mistakes would surely result in bankruptcy.
The Pelican Institute’s latest research compares Louisiana’s pension crisis Wisconsin’s. Despite less coverage, Louisiana’s situation is far worse, and Bobby Jindal’s plan is nowhere near enough to make a dent in the unfunded liabilities.
Lawmakers in both parties have been critical of Gov. Bobby Jindal’s proposal to increase state employee contributions to the pension plan. In reality, his plan is quite restrained in comparison to other states and some supporters argue that should go even further.
“While the $1.6 billion shortfall is a legitimate concern, a greater danger lurks beneath the surface and eventually could dwarf our current challenges.”
It does not take an economist to explain how union and bureaucrat-backed pension plans are killing California.