>According to the New Orleans Times Picayune, the House committee claims that the change would save the state $108 million a year. Under current law, members of the Louisiana State Employees Retirement System can retire with full benefits at any age, as long as they have spent 30 years on the job, or at age 55 once they’ve completed 25 years of service.
>The bill would also lower the rate at which new hires can build up retirement benefits and would require state workers to spend at least 10 years on the job before becoming eligible for a normal pension. In the current system, any member with one year of service can purchase up to five years of work credit.
The bill also proposed reducing the rate of build up for benefits from 2.5% of average salary during their final three years of service (multiplied by number of service years) to 2%. On top of this, the bill also includes a provision that is intended to curtail salary “spiking,” a practice in which employees often get large raises when nearing retirement as a way to boost pension benefits.
An amendment added to the bill would make an exception for judges, who receive more generous benefits by paying into the pension system at a higher rate. Other groups that receive more generous benefits – such as members of the Legislature – aren’t covered by the bill.
The legislation would not alter benefits for current workers, but would be in place for workers hired starting in 2006.
The bill will most likely come up against strong opposition with the pension board refusing to support the measure, due in part because it does not apply uniformly to all state workers, according to the Times Picayune.