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Story Archives: Slaying another sacred cow
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|Slaying another sacred cow|
Gov. Bobby Jindal apparently has too much idle time on his hands.
Or his behavior of late would indicate that the governor is firmly focused on leaving his mark on Louisiana when the time arrives for him to do something else with his life.
If I were a betting man, I would put my money on the latter in light of Jindal announcing his intentions last week to bring about major changes to yet another one of Louisiana's sacred cows.
Two weeks ago, Jindal rolled out a far-reaching proposal to reform public education in Louisiana. He was met by stiff resistance from the people who detest "reform" the most the public education establishment.
Last week, Jindal unveiled his plan to overhaul the state's retirement systems. We haven't heard much griping yet from state employees and company, but you can rest assured they'll rise up in opposition to any proposal that remotely suggests they join the real world in preparing for their retirement years.
During remarks to the Baton Rouge Rotary Club last week, Jindal brought to light an issue that has plagued Louisiana for years. That issue a financially burdensome one, too concerns the unfunded accrued liabilities of the state's retirement systems. They're commonly known as the UAL.
To date, the UAL of the state's retirement systems stands at $18.5 billion. That means the retirement systems are over-obligated. In other words, the benefits the retirement systems must pay out over the next few decades outweigh the money on hand to pay them by some $18,500,000,000.
This year alone, Louisiana taxpayers will fork over $2 billion in benefits for retired state workers. It's an annual obligation that will continue to grow as more state employees retire, often at an age that allows them to collect retirement benefits for years and years. Some state employees call it quits and are young enough to start new careers, collecting retirement benefits from the state while pursuing a new vocation in life. You may know one of them.
Simply put, the state cannot afford to continue operating the retirement systems as they exist today. They will break the state if they're not reined in.
Nothing of significance that Jindal proposed last week would affect state employees who are 55 years of age or older. Those folks will receive the retirement benefits they were promised when they first went to work for the state. Instead it's state employees younger than 55 and anyone the state hires in the future who would be affected by Jindal's proposal, assuming he can get the Legislature to go along with it during the regular session this spring.
To surmise, Jindal's proposal would require state employees to work until they're 67 if they desire to collect full retirement benefits from the state. The governor's proposal for all practical purposes also would force state employees to participate in a savings a plan like the one (s) the private sector must engage in order to put away money for retirement. Those private sector plans, of course, would be a 401 (k), Roth IRA, simple IRA, etc
State employees currently have monies taken out of their paychecks for retirement and those monies (plus interest) are there for them to collect when they retire regardless of the performance (s) of the financial markets. If the financial markets tank, state employees need not worry because Louisiana taxpayers are obligated by law to make those retirement systems whole.
Those of us in the private sector who invest in a Roth IRA and a separate mutual fund or two to help prepare for retirement aren't as fortunate. No, we gamble on the financial markets (for the lack of a better description), hoping our investments grow over time because the government (taxpayers) will not make us whole if our investments don't pan out.
Forcing state employees to join the real world in prepping for their retirement years may be more difficult for Jindal to accomplish than reshaping public education. When you start talking about fiddling with their money, you are prone to witness the worst in people.
That's what the governor may run into when the Legislature bears down on Jindal's proposal to straighten out the mess that took the state many years to create. But that's why the governor is paid the big bucks. He collects them for offering bold proposals and for making tough decisions.
Besides, whoever said making a mark on the state forever would be easy.