Governor Bobby Jindal signed legislation today to require separate employer contribution rates for the different benefit plans within the Teachers Retirement System of Louisiana (TRSL) rather than a single blended employer rate. The legislation -- HB 1131 by Representative Kevin Pearson -- is part of the Governor's 2012 legislative package.
Governor Jindal said, "This is a common sense reform that will allow employers to pay the actual cost of retirement for their own employees. This new law will allow colleges and universities to realize savings from adoption of a cash-balance retirement system."
Earlier this year, Governor Jindal signed into law game-changing legislation to create a new cash-balance plan for new hires that combines the best features of defined benefit and defined contribution plans. HB 61 by Representative Kevin Pearson establishes a cash-balance plan where participants receive an investment account that can never lose value. In the good years, the participants share in investment gains. In the bad years, the participants never share in investment losses. Taxpayers bear less risk because the retirement benefit is tied to market performance, and the pension system retains 1 percent from investment gains to act as a buffer against investment losses. The cash-balance benefits are also portable; a participant who withdraws from state service after five years can take the entire account balance.
Governor Jindal also signed SB 48 by Senator Elbert Guillory to add the Commissioner of Administration or designee to the boards of the state retirement systems. By adding the Commissioner or designee, the boards will gain a trustee who understands state budgeting and the overall fiscal picture faced by the state.