Louisiana Senate Committee Proposes Measure to Increase Benefits for Retired Teachers and State Police | Louisiana
(The Center Square) – Retired teachers and state police could soon see additional income thanks to legislation that authorized the Senate Finance Committee.
Senate Bill 6, sponsored by Sen. Ed Price, D-Gonzalez, would provide a permanent 2% benefit increase to about 76,000 retired educators from Louisiana’s teachers’ retirement system, equivalent to an increase monthly average of $42.
Katherine Whitney, director of the teachers‘ pension system, told lawmakers on the committee the proposed increase would be the first since 2016.
“It will cost $369 million, which is in our experience account, which is funded solely by excess investment returns,” she said. “It’s a permanent benefit increase, so it continues for the rest of their lives and it’s fully funded by the experience account.”
Lawmakers wondered how the extra cost would affect the system in the long run, but Whitney said the entire increase was now fully funded, so it wouldn’t increase costs over time. Funding the experience account, she said, is what remains of excess investment returns after paying $200 million for accrued unfunded liabilities, Whitney said.
The teachers’ pension system is currently 71.8% fully funded, she said.
If approved, the increase would begin July 1.
Senate Bill 7, also sponsored by Price, would provide the same permanent 2% benefit increase to retired state troopers.
“The PBI (permanent benefit increase) for the Louisiana State Police Retirement System is similar in structure to (the teacher increase),” said Kevin Reed, executive director of the system. “The PBI is funded by our experience account. The experience account has a balance of $9,497,110. The actuarial costs of granting a 2% PBI for retirees who qualify – who are 60 years of age or older, and an additional 2% for members who are at least 65 years old and have taken their retirement no later than June 30, 2001 – amount to $9,497,110.
“Essentially we will deplete the experience account for the purpose it was intended for, which is to pay PBI to retirees,” he said.
The average benefit for state police retirees is $57,243, and the average monthly benefit increase would be $65.60, Reed said.
The members of the committee presented no objection to either bill and unanimously advanced both. The bills are now submitted to the full Senate for consideration.