Retired teachers and state police could soon see extra income with legislation that cleared the Senate Finance Committee.
Senate Bill 6, sponsored by Sen. Ed Price, D-Gonzalez, would provide a permanent 2% benefit increase for about 76,000 retired educators in the Teachers Retirement System of Louisiana, which amounts to an average monthly boost of $42.
Katherine Whitney, director of teacher retirement system, told lawmakers on the committee the proposed increase would be the first since 2016.
“It will cost $369 million, which is in our experience account, which is solely funded through excess investment returns,” she said. “It’s a permanent benefit increase, so it’s going forward for the rest of their life and it’s fully funded through the experience account.”
Lawmakers questioned how the added cost will impact the system in the long term, but Whitney said the entire increase is totally funded now, so it won’t increase costs down the line. The funding in the experience account, she said, is what’s left from excess investment returns after paying $200 million toward accrued unfunded liabilities, Whitney said.
The teacher retirement system is currently at 71.8% fully funded, she said.
If approved, the increase would begin on July 1.
Senate Bill 7, also sponsored by Price, would provide the same 2% permanent benefit increase for retired state police.
“The PBI (permanent benefit increase) for the Louisiana State Police Retirement System is similar in structure to (the teacher increase),” said Kevin Reed, the system’s executive director. “The PBI is funded from our experience account. The experience account has a balance of $9,497,110. Actuarial costs of granting a 2% PBI for those retirees who qualify – which are 60 years of age or older, and a supplemental 2% to members at least 65 and retired on or before June 30, 2001 – is $9,497,110.
“In essence, we will deplete the experience account for the purpose it was intended and that is to pay the PBI to the retirees,” he said.
The average benefit for state police retirees is $57,243, and the average monthly benefit increase would be $65.60, Reed said.
Committee members offered no objections to either bill and unanimously advanced both. The bills now move to the full Senate for consideration.
This article was originally posted on Louisiana Senate committee advances measure to bump benefits of retired teachers, state police