In a speech to the Rotary Club of Baton Rouge, the governor unveiled a detailed plan he says would both ease taxpayer burden and ensure that workers will receive promised benefits, according to The Greater Baton Rouge Business Record. Jindal said the state’s unfunded accrued liability has tripled to $18.5 billion over the past two decades, three times the current total payroll.
For new hires, Jindal proposed a switch from a defined benefit plan to a cash-balance plan. “We are not promising a benefit greater than we can get in the market,” he said. “It’s a responsible plan … which will provide a retirement benefit that is at least as generous as Social Security’s when market conditions are bad, and will provide a benefit that is far better when market conditions are good.”
In addition, Jindal wants to change the current plan to calculate benefits using a five-year employee salary average rather than three-year; align the state retirement age with the Social Security age of 67; and grant cost-of-living adjustments only when assets exist to pay promised benefits. He also proposed a 3% hike in the employee contribution rate.
Jindal also called for greater efficiency and unification between the state’s four pension systems. He seeks to add the commissioner of administration to state pension boards and merge the Louisiana State Employees Retirement System ((LSERS) into the Teachers Retirement System of Louisiana (TRSL).Jindal expects his proposals to save taxpayers $450 million in the first year and $1.5 billion over the next five years.