Association Challenges Louisiana Cash Balance Plan

August 16, 2012 ( The Retired State Employees Association of Louisiana has filed a lawsuit challenging a new cash balance pension plan for future state workers.

The Association claims the law, passed earlier this year, is unconstitutional because it did not get a two-thirds vote in the state House of Representatives, the Associated Press reports. The lawsuit says any provision involving a public retirement system that is deemed to carry a price tag requires a two-thirds vote for passage.  

In June, the Louisiana State Employees Retirement System (LASERS) hired a tax lawyer to help address issues with implementing the cash balance plan for future hires (see “Louisiana Cash Balance Plan Faces Hurdles”). In addition, LASERS Executive Director Cindy Rougeou said the system was looking at who has standing to file a lawsuit challenging the new plan.   

An independent analysis indicated Governor Bobby Jindal’s pension overhaul proposal would violate the Louisiana constitution because it changes the terms of a contract between employees and the state (see “La. Pension Overhaul Could Spur Lawsuits”).