Louisiana Senate Bill SB602

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 4/12/10
• Engrossed: 4/21/10
• Refer: 4/22/10

Caption

Relative to Louisiana State Employees' Retirement System, Teachers' Retirement System of Louisiana, and Louisiana School Employees' Retirement System, places restrictions on participation in the Deferred Retirement Option Plan. (7/1/10) (RE DECREASE APV)

Impact

The enactment of SB 602 will impact new members joining the state retirement systems by eliminating their ability to participate in DROP. The DROP allows eligible members to freeze their retirement benefits while still working, enabling them to build a lump sum for retirement while continuing to receive their salary. This change could discourage some potential public sector employees from joining the state workforce, particularly those nearing retirement age. The bill also places the responsibility of funding any costs associated with the change onto employers, aligning with state constitutional requirements.

Summary

Senate Bill 602, introduced by Senator B. Gautreaux, aims to amend the participation rules for the Deferred Retirement Option Plan (DROP) applicable to members of the Louisiana State Employees' Retirement System (LASERS), the Teachers' Retirement System of Louisiana (TRSL), and the Louisiana School Employees' Retirement System (LSERS). The bill specifies that any member whose membership begins after July 1, 2010, will no longer be eligible to participate in the DROP. This is a significant change from previous provisions which allowed for greater flexibility in retirement options for workers nearing retirement age.

Sentiment

The sentiment surrounding the bill appears to be mixed. Proponents argue that this legislation will help control rising pension costs and address financial sustainability within state retirement systems. Critics, however, may perceive this as a disadvantage for future state employees who would lose the benefits of DROP, potentially leading to dissatisfaction within the workforce. The overarching discussion reflects broader concerns about retirement benefits and fiscal responsibility within state-managed programs.

Contention

Notable points of contention include the implications of restricting DROP participation. Critics of the bill express concern that it may deter highly qualified individuals from entering public service roles, particularly in education and state administration. Those in favor, however, argue that the adjustment is necessary to ensure the long-term viability of the pension systems. The bill has sparked debate about the balance between providing adequate retirement benefits and maintaining fiscal responsibility within publicly funded retirement programs.