Teacher Retirement System opt-out proposal is dead

A bill by Sen. Mack White, Jr., R-Baton Rouge, allowing K-12 employers to opt out of the Teachers’ Retirement System of Louisiana failed to gain Senate Retirement Committee approval Monday. It appears dead for the session.
White said Senate Bill 452 would have simply opened up other retirement plan options for new employees coming into the Louisiana school system.
“This is no attempt to harm the current retirement system,” White said. “If you want to (be successful0, you have to get out of the box sometimes.”
Current Louisiana law does not provide for an exit strategy for an employer to withdraw employees from the Teachers’ Retirement System of Louisiana (TRSL). Furthermore, the law does not permit education employers to terminate participation in this system for future employees.
TRSL is a defined benefit plan, meaning funds are pooled from employee payroll, offering a monthly benefit to retired employees.
TRSL Director Maureen Westgard strongly opposed White’s bill, arguing the proposal was not clear enough in how a new retirement system would be implemented and how it would impact current TRSL members.
“This bill is absolutely silent about what (other retirement options) would be offered,” Westgard said.
Westgard said the Louisiana Constitution requires the state provide for the retirement of its public employees and teachers, so if SB 452 were approved, the question then becomes, ‘Who is the planned sponsor of the new plan and what is the state responsibility to that plan?’
The effect of retaining some employees in the TRSL plan while allowing new employees to choose a different plan could cause issues as well, Westgard warned.
Committee chairman Sen. Barrow Peacock, R-Bossier City, agreed the lack of clarity in the bill could cause issues.
“This is sort of like how you can’t be partially pregnant…you either are or you’re not,” Westgard said. “It’s not that I am trying to raise more questions, it’s just that the bill is unclear.”