Provides relative to retirement eligibility for certain members of state retirement systems. (6/30/20) (OR DECREASE APV)
In practical terms, the bill will likely lead to lower long-term costs associated with benefits for future retirees, as it will decrease both the overall actuarial present value of benefits rendered and the liability for additional post-employment benefits such as health insurance. The changes in retirement eligibility are designed to result in a gradual reduction of fiscal costs associated with the retirement systems over time. This legislation will not retroactively affect current members, but will reshape the landscape for future employees regarding retirement planning.
Senate Bill 18 (SB 18) proposes changes to the retirement eligibility criteria for members of the Louisiana State Employees’ Retirement System (LASERS), the Teachers’ Retirement System of Louisiana (TRSL), and the Louisiana School Employees’ Retirement System (LSERS). Specifically, the bill affects individuals who first become members on or after July 1, 2020, redefining retirement ages based on the greater of age 67 or the retirement age set by the Social Security Administration. The goal of the legislation is to manage the financial sustainability of these retirement systems by extending the period before members are eligible to receive benefits, thereby reducing the financial burden on the state's retirement systems over time.
The sentiment surrounding SB 18 is mixed. Proponents, primarily consisting of legislators focused on fiscal responsibility, argue that increasing the retirement age will enhance the financial health of the state's retirement systems. This can ease future budgetary pressures and maintain stability in state finances. Conversely, critics of the bill express concern that such changes may disincentivize public service by making retirement less accessible for new employees, which could undermine recruitment and retention in critical state roles.
The major points of contention revolve around the implications of the increased retirement age on employee morale and the potential long-term effects on workforce demographics in state employment. Opponents worry that a higher retirement age could lead to a paradox where younger public sector employees opt for private sector jobs that offer more immediate retirement benefits, thereby diminishing the quality of state services. Additionally, stakeholders from various employee unions have raised concerns about the adequacy of benefits for workers who may struggle to work longer before retirement.