Retiree bills head to house floor

• By SARAH CHACKO
• Advocate Capitol News Bureau
• Published: May 14, 2009 - Page: 7A

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Two bills intended to help retired state workers keep up with inflation and out of poverty passed a House committee Wednesday.

House Bill 96, sponsored by state Rep. Kevin Pearson, R-Slidell, would allow retirees to guarantee their own cost of living increases by taking a reduced pension up front. Only workers who retire after the bill becomes law would be effected.

House Bill 586, sponsored by state Rep. Jean Doerge, D-Minden, would increase the pensions of retirees receiving less than $1,200 a month. Only about 1,400 current retirees are expected to benefit from Doerge’s legislation should it become law.

About 90,500 people benefit from the two biggest state retirement systems — state employees and teachers. East Baton Rouge Parish is home to about 3,000 retired state employees and 5,700 retired school teachers, according to the state retirement systems.

Pearson told the House Retirement Committee that it is hard for a person, at age 55, to know how much they need to live on by the time they are age 85.

“Ten years down the road, 20 years down the road, with the effects of inflation, it’s just difficult to know,” he said.

Under HB96, a retiree could opt to receive a reduced pension initially. The retiree would be guaranteed a 2.5 percent pension increase every year.

All retirees would still receive cost of living adjustments, called COLAs, that a system periodically grants to its members.

Those systemwide COLAs are not consistent and have not been granted in the last few years, Pearson said.

“We don’t know when we’ll be able to give them in the future, looking at market performance right now,” he said.

House Bill 586 would grant a minimum benefit to certain retirees and beneficiaries of the Louisiana State Employees’ Retirement System, called LASERS, and the Teachers’ Retirement System of Louisiana.

Benefits would increase by $300 a month, or the difference between the retiree’s current benefit and $1,200, whichever is less.

Doerge said preliminary figures from the two state systems show that 740 LASERS retirees could benefit from the bill, for a cost of $9.8 million, and 721 retired teachers could benefit, for a cost of $8.9 million.