Louisiana retirees could see reduced benefits

The Louisiana legislature has advanced a proposal to curb retirement for future members of the Louisiana State Employees' Retirement System (LASERS). The measure would reduce the benefit accrual rate for members who join the system after July 1, 2006. It would also increase the employee contribution rate for those members.

LASERS Executive Director Bob Borden said he understands that changes are needed and that the system wants to be involved in crafting holistic solutions to its financing woes.

"I think it's to the point where we realize that we're going to have to proactively be recommending a solution," Borden said.

Schneider's bill would require state workers hired after Jan. 1, 2006, to contribute 8 percent of their paychecks toward retirement benefits that would build up more slowly than the benefits promised to current workers.

Current members of LASERS contribute 7.5 percent of their paychecks for retirement benefits that build up at a rate of 2.5 percent of their highest average salary for each year of service. Schneider's bill would let new workers build up benefits at a rate of 2 percent per year.

New hires would also have to work at least 10 years and wait until age 60 before they could collect normal retirement benefits, a change from the current system that allows some workers to retire with full benefits in their late 40s.

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