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Louisiana Treas. Kennedy says board wants answers on Edmonson bill

Written by  // Wednesday, 23 July 2014 12:29 //

By John Kennedy, State Treasurer

Kennedy-interview2Unless you just parachuted in from Mars, you've probably seen media reports about the retirement bill recently passed by the Legislature and signed by the Governor (Act 859) that boosts the retirement benefits for a small number (allegedly two) of Louisiana State Police Troopers. The benefits-boosting provision, again according to media reports, was added to an unrelated bill on the last day of the legislative session by a six-person conference committee that did not meet publicly. All six of the conferees say they did not sponsor the amendment.

 

It's important we get the facts about what happened, how and why for two reasons. First, fairness. Whether you are a prince or a pauper, a king or a pawn, our retirement laws should apply equally to everyone. Second, cost. Louisiana's four state retirement systems have a $19 billion deficit (called an unfunded accrued liability, or UAL, in accounting terms), which according to Standard & Poor's is the sixth worst in America. That means the present and projected future assets of the systems are $19 billion less than the retirement payments promised by law and guaranteed by taxpayers and the state constitution. The Louisiana State Police Retirement System (LSPRS) has a $323 million UAL.

I sit on the Board of Trustees of the LSPRS as State Treasurer. My fellow board members and I take seriously our fiduciary obligation to protect the system's assets for the 933 active state troopers, 893 retired troopers and 341 troopers' survivors. We have directed our legal counsel to investigate the facts surrounding the passage and signing of Act 859 and report back to us within the month. We have asked for the answers to the following nonexclusive questions:


1. How many people will Act 859 benefit?


2. Who are the people who will benefit, so they can be invited to speak to the LSPRS Board to explain their side of the story?


3. What is the cost of Act 859 to the retirement system and its members?


4. Is it true that the actuarial note discussing the cost of Act 859 was added three days after the bill passed and, if so, why?


5. What would it cost to give the same retirement benefit increase to all troopers and their dependents who are similarly situated?


6. Who sponsored the benefits-boosting amendment, so they can be invited to speak to the LSPRS Board to explain why they offered it?


7. Does the amendment satisfy the legal requirement of proper notice for a retirement benefits bill?


8. Does the amendment meet the legal requirement of "germaneness"(relevance) to the amended bill?


9. Does the amendment violate the state constitutional prohibition (art. I, §23)against the Legislature passing a law that impairs the obligation of contracts?


10. Does the amendment satisfy the state constitutional requirement (art. I, §3) of equal protection of the laws?


11. Does the process by which the amendment was adopted violate the Legislature's internal rules?


12. What are the Board's legal options?


Let's get the facts. I do not believe the LSPRS Board of Trustees will tolerate preferential treatment to the detriment of other active and retired troopers and their families, if indeed that is what is found to have happened.


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