Treachery, contempt and the House Retirement Committee

Treacherous is just one of the words describing the actions of the House Retirement Committee on Wednesday. The committee’s utter contempt for the people of the state and the rule of law is surpassed only by its craven submission to the will of Governor Bobby Jindal.

Not that all members were compliant when a bill’s intent was completely transformed so the governor could get his way and merge the Teachers’ Retirement System of Louisiana and the Louisiana School Employees’ Retirement System.

Democrats on the committee, led by Rep. Sam Jones (D-Franklin) boycotted the vote, leaving only Republican members to do the governor’s bidding.

Here are the sordid details.

The committee was slated to hear SB 6 by Sen. Elbert Guillory (D-Opelousas), an innocuous bill calling for an annual report to the school employees’ retirement system on privatized jobs.

But as has happened too often this session, the bill was hijacked by a surprise, 47-page amendment crafted by the governor’s office. The new language resurrected the system merger, which was originally contained in HB 1198 by Rep. Kevin Pearson (R-Slidell).

HB 1198 was approved by the Retirement Committee, but has languished on the House calendar for lack of enough votes to guarantee its passage.

House rules say that substantive amendments must be submitted 48 hours in advance of the meeting. But Rep Pearson, who chairs the panel, ruled that the amendment was not new information to the committee, and allowed it to be considered.

Reaction to the maneuver was immediate and explosive. Calling the move a “farce,” Rep. Jones walked out of the meeting. Without a quorum present, Rep. Pearson recessed the meeting to round up enough allies to pass the bill. When the panel reconvened, Democratic members stayed away, leaving only Republican lawmakers present to approve the bill.

“Offensive” was one word LFT Legislative Director Mary-Patricia Wray used to describe the tactic. “I think that the good faith of this Legislature with the citizens of this state has been breached," she said.

The underhanded tactics endorsed by Rep. Pearson and Sen. Guillory meant that teachers and school employees whose retirement will be affected did not have a chance to comment before the committee voted. And because SB 6 had already been approved by the Senate in its original form, the amended version now faces scrutiny only on the House floor.

The merger would abolish LSERS and transfer all its property, rights, obligations and employees into the Teachers’ system. In the process, 30 employees would lose their jobs within a year. That greatly increases the work load on remaining staff, and could cause a reduction in services for the members of the merged systems.

Times-Picayune reporter Jeff Adelson covered the meeting for this story; Marsha Shuler of The Advocate filed this report.

Why teachers should worry about retirement bills this year

Some legislators are upset that teachers and school employees are calling them about retirement issues. They point out that current K-12 educators are not included in the governor's attacks on state retirement systems this year. They say that teachers and school employees have nothing to worry about this year.

On a very simple and misleading level, they are correct. Currently employed K-12 teachers and school employees were carefully edited out of some retirement bills, although higher education faculty members of the Teachers Retirement System are definitely at risk.

Simply saying that K-12 educators aren't affected this year, however, does not mean they have nothing to worry about. If the so-called "reforms" pass this year, it is almost certain that teachers and school employees will be added to the list in upcoming legislative sessions.

But that's not the only reason for teachers and school employees to oppose attacks on the retirement systems of other workers.

First of all, we owe it to other employees to support their interests, especially if we ever hope to have their support when we are under the gun. The more we stick together, the better our chances of having decent and sustainable retirement plans for all of us.

And if you are looking for a more technical and layered reason for concern, we have that for you as well.

If the proposed retirement system changes go through, teachers and school employees will be indirectly but definitely affected. Here's how LFT Legislative Director Mary-Patricia Wray explains it:

The investment strategy of the board will change, and the decisions made on behalf of all plan participants, new or old, will be influenced by the changes made to final average compensation, retirement eligibility, DROP eligibility, employer and employee contribution rates and the proposed institution of a cash balance plan.

The prospective language in the bills is a facade that fails to fully disguise the retroactive nature of these bills. The governor's package, if adopted in whole or part, will increase the unique investment interests of plan participants since different members will be eligible to retire at different ages, under different styles of pensions, and with vastly different income levels.

The board managing of each retirement system will have a fiduciary duty to all members, making the wisest investment decisions for each fund. Meanwhile they will have to change past investment strategies to accommodate new hires who will have completely different levels of tolerance for risk-taking. Ultimately it will impact the funded ratio of the system, and thereby every single member of the system, whether a career employee or a new hire.