Possible Changes on the Horizon for State Retirement Plan
By: Amber Miller
Updated: March 2, 2010
An expected legislative proposal could change Louisiana's current Defined Benefit Plan to a Defined Contribution Plan. Executive Director of the Louisiana State Employees' Retirement System tells NBC 6 News a Defined Benefit Plan is a guaranteed lifetime benefit for state employees. Whereas, a Defined Contribution Plan is comparable to a 401K plan. The employee is responsible for putting money into and managing the investment.
If the potential proposal becomes law the retirement system would change for new employees. However, Louisiana Senator Robert Adley tells NBC 6 News if new employees stop paying into the system current and retired employees could also be affected.
"That means the cost of the system goes up. That means that the payments that the state of Louisiana has to make goes up and at the end of the day it means the cost to taxpayers go up."
Bonita Hearne is a local state retiree. She tells NBC 6 News she hopes things remain the same.
"We would just be ruining the fiscal soundness of our system," said Hearne. "It may sound like a good deal and it may be a quick fix but, it's not for the benefit for the new or current employees and their future."
