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Key Lawmaker Calls for Across-the-Board Pension Reform

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Contrasts with Jindal proposal of increased contributions for rank-and-file only

Rep. Kevin Pearson (R-Slidell) is calling for increased state employee pension contributions to cover rising liabilities, but his proposal goes beyond Jindal’s plan and would include police officers, judges, and university professors.

Lawmakers in both parties have been critical of the pension changes in Gov. Jindal’s 2011-2012 budget plan, and Pearson agrees there is no escaping the severely underfunded retirement programs. The total unfunded liability for the four pension programs Louisiana established is over $18 billion, according to the most recent actuarial estimates. This figure does not include other post employment benefits (OPEB), which have $11.5 billion in liabilities.

Jindal is asking for rank-and-file state workers to contribute 11 percent of their salaries to pensions, up from the current eight percent.

“What the governor has done is to jump start a very important conversation about the liability situation, which is undeniable,” Pearson said. “But we need to break orbit from the just rank and file and carefully consider other categories here in our state workforce. We may be able to have a smaller across the board increase in contributions by including more government employees.”

One possible option, Pearson has discussed, is to increase the contributions for all state employees by one and half percent on their first $50,000 and then any salary over $50,000 might include a 3 percent contribution.

State lawmakers are set to consider proposed pension changes in the upcoming legislative session that begins in late April.

There is no strict legal definition for the term “rank-and-file,” but it typically applies to those government employees not included in the Louisiana State Employees’ Retirement System (LASERS) special sub-plan which offers enhanced benefits. Employees in the sub plan include, among others, judges and other legal offices, some state legislators, corrections officials, wildlife officials, and peace officers in the state police department.

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on Twitter.

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