The bill forces future education employees to actually work a respectable number of years before they can retire, especially at full pay. It’s possible now for somebody to retire at full pay before he’s 50 – and then turn around and get hired at approximately the same salary, potentially double dipping off of taxpayers for a couple of decades.
It’s one of the main reasons why the state’s retirement funds are so badly underfunded, too generous benefits. There’s also been criticism about their management, with Boasso providing examples about how ill-informed some of their board members were. But you couldn’t have known that from, particularly, the teachers’ unions representatives that lodged complaints about his bill. Complementing them was officials from the retirement boards, all together whining along several themes:
- Recent return rates have been above average
- Combining two boards into one with hardly any teachers’ representatives on it would put too many eggs into one basket
- Why change boards compositions that had done so well?
- “Expertise” in investing in this area was overrated; elected representatives who are or were teachers could do just as well
Of course, none of these were convincing arguments. First of all, it wasn’t these representatives who were making these great investment decisions it was investment professionals whose advice they followed. Who says a new board with reduced teacher influence could make just as good decisions? Or even better, since the bill would put six investment professionals on the single board. Second, just because one set of people did all right investing does not mean anybody else can’t do as well or better. Third, even if benefits to the system are backloaded, $38 million would be saved over the next 5 years.
Boasso, along with Sen. Jay Dardenne, pointed out most of these. Most interesting was the desperation evident among many of these opponents. Some snidely suggested that Boasso, a freshman senator, was being used by others to put this legislation forward. One, showing just how far out of touch they were with the citizenry, asked why any graduate would want to go into teaching starting at $27,000 a year and faced with having to work until he was 60. (Many Louisianans dream of such affluence in a job from which they almost could never be fired from.)
Desperation reigned because they were fighting for the future of their unions, from which they derive power and privilege at the expense of taxpayers. Teaching will become less lucrative (note that state teachers’ pay, for two-thirds of a year’s work, in Louisiana still is higher relatively speaking than their results in the classroom) even as this bill still leaves in place a more-generous retirement system than virtually any other occupation. This means their unions become less powerful.
The bill was amended to drop the year-long sit-out period without benefit payment between retirement and beginning double-dipping (because now you’d have to be 60 to start it) and to begin a year later, but otherwise passed unscathed and unanimously. The tenor and tone of its opponents likely means their fight against it isn’t over by a longshot.
TUESDAY: SB 323 is scheduled to be heard by the Senate Judiciary C Committee; HB 173, HB 335, HB 539, HB 582, HB 583, and HB 712 are scheduled to be heard by the House Ways and Means Committee;
WEDNESDAY: HB 386 is scheduled to be heard by the House and Governmental Affairs Committee; HB 162 and HB 163 are scheduled to be heard by the House Insurance Committee.