Cost-of-living benefit increases are on the horizon for more than 100,000 retired state employees, teachers, school employees and State Police.
The Louisiana Senate voted 36-0 on Monday for the final piece of a legislative package that triggers the 1.5 percent benefit increases effective July 1. The vote sent the House-passed measure to Gov. Bobby Jindal’s desk for his promised signature.
Jindal has already signed separate bills granting the cost-of-living adjustments, or COLAs, to retirees of all four statewide retirement system. But the raises could not go into effect without passage of House Bill 1225. The legislation revamped the system through which the benefit increases would be awarded in the future. The Senate provided that vote Monday.
State Sen. Elbert Guillory, R-Opelousas, said the package of bills provided “a much needed” COLA while “reforming” the system to save taxpayer dollars.
HB1225 would divert more of the retirement systems’ excess investment earning toward reducing the systems long-term liabilities which currently sit at $19 billion-plus. The diversion reduces the funds going into special accounts that pay for COLAs.
The state is making large extra payments on the oldest of the systems’ debt, which stems from past administrations and legislatures failing to properly fund benefits granted.
The legislation will allow the state to pay off the oldest debt six year sooner than anticipated and will save $5 billion over the next 30 years by cutting down on interest payments, Guillory said.