Potential conflicts and a growing interest in hedge funds have some eyeing Louisiana’s public retirement systems with renewed skepticism.
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.
Policy differences within Louisiana’s Republican Party complicated efforts to pay down the unfunded accrued liabilities (UALs) within the state’s retirement funds. Rep. Kevin Pearson’s (R-Slidell) was defeated in the Senate Retirement Committee on Sunday.
Rep. Kevin Pearson’s retirement reform bill passed the Louisiana House by a comfortable, bipartisan margin on Monday. His legislation provides for a readjustment of the final average compensation (FAC) for state employees that would be used to pay down unfunded accrued liabilities.
State lawmakers were not thinking about long term costs when they passed a law back in 1999 that allowed for taxpayers to pick up all or part of the tab for employee contributions to a local pension plan. Pension reform proposals will be up for discussion in the upcoming state legislative session
Dennis Woltering of Eyewitness News examines Louisiana’s public pension crisis with Kevin Kane, in the wake of a new Pelican Institute report.