Louisiana Retirement System Tries To Adapt To Changing Workforce

Mar 26, 2018
Originally published on March 26, 2018 10:43 am

These days, fewer state employees are spending their entire careers in government work. About 70 percent are expected to leave their job before they can earn full retirement. 

The agency in charge of retirement for Louisiana public employees is pushing for reform this legislative session. Cindy Rougeuo, executive director of the Louisiana State Employees Retirement System, says this reform presents a new plan for a new generation.

"People, particularly millennials, they move around a lot, they change jobs," she explains.

State employees in Louisiana don’t pay into social security. So those who work for the state for a handful of years leave with only a refund of their contributions.

Rougeou says, "what we don't want is for it to be a detriment to these young people for having worked for the state. We want to attract good workers and we want to have a pension system that better meets their needs to help retain these workers."

Under the current Louisiana system, retirement benefits are based on how long an employee worked for the state and how much they were paid. This proposal would introduce an new component — a retirement account more like a 401(k) offered in the private sector. 

Steven Procopio is the policy director for the Public Affairs Research Council of Louisiana. He says this reform allows employees who don't make a career with the state to still contribute to their retirement.

"Under this system if you work for a couple of years," he explains, "you get to walk away with some portion of that 401(k) style benefit. So you can take that to your next job."

If the measure is able to make it through the Legislature, it would only apply to new state employees starting in 2020.

The bill is expected to be heard in the Senate Retirement committee Monday.

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