EDITORIAL: Long-term solutions for pensions

July 23--In an era of short-term thinking at the State Capitol, one of the best ideas for long-term reform was shelved in the chaos of the 2017 legislative sessions.

That was a well-thought-out proposal to support a new version of the state's basic retirement plan for rank-and-file state workers.

Proposed by the Louisiana State Employees Retirement System, or LASERS, the new plan was based on data officials compiled on the workers who are investors in the pension fund and ultimately beneficiaries of their investments and those of the state.

What LASERS found is that turnover was so great in state government that the majority of participants failed to stay long enough to vest in the system. As pension funds in other states have done in recent years, Louisiana's system proposed a hybrid plan that has elements of the traditional long-term benefit as well as a portable investment that a worker could take with them if leaving state service earlier.

While the plan would not show a huge saving for the state over a period of decades, it would better serve workers, LASERS said -- and would not affect the existing beneficiaries.

Such common sense was a bit too radical for the political masters of state workers.

Bills were offered by the chairmen of the Legislature's retirement committees, state Sen. Barrow Peacock, R-Shreveport, and state Rep. Kevin Pearson, R-Slidell. But the bills did not move; the Council for a Better Louisiana said that opposition from Gov. John Bel Edwards stalled consideration of the new plan. The governor's office did not respond to a request for comment on CABL's assertion.

"This plan represents a significant reform on a major state issue and deserves a vigorous and substantive debate -- not an automatic derail," CABL said. "If we ever wonder why the state can't get out of some of the fiscal messes it gets into, this could be a prime example."

While a far-reaching change for future state hires deserves study, the extensive work on the hybrid plan by the LASERS staff and outside analysts at the Public Affairs Research Council suggest it's still a good idea.

Louisiana's new state treasurer, John Schroder, by law sits on the many systems' retirement boards, although typically as his predecessors have done he sends financial experts from his office to most of their routine meetings.

This, though, is not a routine issue, and Schroder has been paying close attention: The treasurer recently told the Press Club of Baton Rouge that he backs the new hybrid plans and believes that the 2019 Legislature should take up the issue in earnest.

It's an election year, so change may be harder politically.

Still, we agree with Schroder and hope that the governor and Legislature will take another look at this attempt to give tomorrow's workers a better deal.

___

(c)2018 The Advocate, Baton Rouge, La.

Visit The Advocate, Baton Rouge, La. at www.theadvocate.com

Distributed by Tribune Content Agency, LLC.