A retirement bill that higher education leaders say will go a long way in determining their ability to attract and retain faculty cleared an important hurdle Wednesday at the State Capitol.
Senate Bill 16, sponsored by state Sen. Gerald Long, R-Winnfield, would give college and university management boards some control over employer contribution rates. The House Retirement Committee approved the Senate-passed legislation without objection and it now goes to the full House for consideration.
Higher education leaders have called the bill protection against the “unintended consequences” contained in Gov. Bobby Jindal’s pension plan for new employee hires.
The employer contribution could drop to 1.8 percent under Jindal’s plan instead of the current 5.7 percent rate.
Speaking before the House Retirement Committee, Long said his bill “may be as important as anything in higher education.
“If we want a quality higher education system, we have to provide an incentive to get people to come to Louisiana,” Long said.
Officials from the LSU, Southern University and University of Louisiana systems have argued that the governor’s 401(k)-type plan would be devastating to recruitment and retention on college campuses.
LSU System President William Jenkins said the university currently has professors “on hold,” waiting to see how SB16 will shake out. Jenkins argued that since Louisiana professors don’t get Social Security, their benefits package is a major factor in their decision whether to work in Louisiana or not.
While higher education officials said they are mostly happy with the bill, there has been some concern over the amended version that advanced out of committee Wednesday.
The amended version applies both to current and prospective employees. It gives college and university management boards the option to set their employer contribution rate at the governor’s preferred 1.8 percent rate or do nothing, and the rate will automatically stay at the higher rate.
State Commissioner of Higher Education Jim Purcell said it is highly important for employees to know they have access to a plan that is transferable between jobs.
He also said the bill functions as a safety net in a state that decided long time ago to forgo Social Security for state workers in favor of coming up with their own plan.
University of Louisiana System President Sandra Woodley said Louisiana is at a disadvantage as most states have employee and employer contributions plus Social Security, which is a much more attractive to prospective employees.
“We’d prefer this bill as originally written, but even with the amendment, it still gets us where we need to be,” she said. ‘We’re no worse off.”
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