BATON ROUGE (AP) — Louisiana senators
watered down Gov. Bobby Jindal's proposals to charge state employees
more and make them
wait longer for pension benefits in changes Monday that were
backed by administration officials hoping to reach a compromise
that can pass the Legislature.
The Senate Finance Committee rewrote the bills to shrink and phase in the increased payments and lessen the blow to workers
who have been state employees for decades.
"It has been drafted in a way that will have the least possible negative impact on employees and their families," said Sen.
Elbert Guillory, the Opelousas Democrat who is sponsoring the measures for Jindal.
The retirement proposals have faced opposition from lawmakers and constitutional questions. Lawmakers and the governor's office
have been haggling behind the scenes over adjustments.
As rewritten, none of the changes would
begin until July 1, 2013, for current workers. A proposal to increase
retirement contribution
rates by 3 percentage points was dropped to 2 percentage points,
phased in over four years.
The delayed retirement age won't apply to
workers who are 55 or older, or those who have worked for the state for
at least
20 years, and it wouldn't change current retirement age for
existing workers who reach 30 years of employment with the state.
The reworked bills are far different than the sweeping changes sought by the governor, but Jindal administration officials
didn't object.
"We think the bills as amended provide a great first step in terms of retirement reform," said Kristy Nichols, Jindal's deputy
chief of staff.
Despite the overhaul, opponents said the changes won't remove the constitutional problems, and both sides of the debate said
they expect court challenges if the bills pass. Litigation is estimated to cost the state between $750,000 and $3 million,
according to the legislative auditor's office.
Critics said the proposals would violate provisions in the Louisiana Constitution that protect pension benefits for state
employees.
"Even though that contract was agreed upon
when I was hired, you're attempting to break it. Even though that
contract is protected
in the state constitution, you're attempting to break it," Neil
Carpenter, a state worker since 1999, told senators.
The proposals could affect as many as 55,000 rank-and-file workers and higher education employees. Guillory said the full
Senate could debate the measures as soon as Wednesday.
Guillory said adjustments to the state's retirement offerings are needed to limit the growing costs of pension programs that
are $18 billion short of the funding they'll need to pay for all the benefits promised.
"We believe that it will have a major impact in shoring up the fiscal solidness of the retirement system," he said.
Opponents questioned whether the bills would save much money now that they've been so heavily reworked.
Carpenter said the retirement system debt had nothing to do with the state workers who would be penalized by the changes,
and he said the bills would dissuade people from wanting to work for the state if they know their promised benefits can be
regularly reduced.
"What promise can the state make that future employees can trust?" he said.
As the bills headed to the full Senate for
debate, the amount rank-and-file state workers would pay toward their
retirement
would grow from 8 percent of their salary to 10 percent over four
years from 2013 until 2016. The money would be used to pay
down retirement debt.
A second bill would require employees to work longer to get their full retirement benefits, depending on how many years they've
been in the system and their current age.
Employees with 15 to fewer than 20 years working for the state could retire at 55, employees with 10 to fewer than 15 years
on the job at age 57, employees with 5 to fewer than 10 years in state employment at age 60 and those with fewer than five
years at age 65.
New hires would have to wait until the age of 67 to retire with full pension benefits.
A third measure would calculate the monthly retirement payment on an employee's top five years of salary instead of three
years. It would be phased in so the full change would apply to people who retire on or after July 1, 2015.
The governor's proposals center only on certain state employees. They don't include elementary and secondary school system
employees, judges, or state police, prison guards and anyone else deemed in hazardous duty. Current elected officials also
could opt out of the changes if they choose.
Online: Senate Bills 47, 52 and 749 can be found at www.legis.la.gov