Bid to toughen teacher retirement rules sparks controversy, ‘Makes necessary reforms’ | Legislature | #retirement | #elderly | #seniors
A longshot bid to raise the age for teachers and others to qualify for full retirement benefits from 62 years to 67 has sparked intense opposition from teachers, superintendents and leaders of the state retirement systems.
State Sen. Barrow Peacock, R-Shreveport and sponsor of the bill, emphasized the change would only apply to future teachers and make Louisiana’s retirement systems healthier.
“I am not taking anybody’s retirement away from them,” Peacock said. “I want to make the retirement systems stronger and healthier.”
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Opponents contend the new rules would make it harder to shore up the ranks of teachers at a time when staffing classrooms is increasingly difficult.
“Everyone knows we are having problems with recruiting and retaining teachers,” said Cynthia Posey, director of legislative and political affairs for the Louisiana Federation of Teachers.
Posey said Peacock’s plan “will keep people from going in the profession when we are already struggling to find certified teachers. This is something that would deter them.”
Aside from the Louisiana Federation of Teachers the measure is opposed by the Louisiana Association of Educators, Louisiana Association of School Superintendents, Gov. John Bel Edwards’ office, the state AFL-CIO, the Retired State Employees Association and the Teachers’ Retirement System of Louisiana.
The proposal, which would also raise the retirement age for future state employees, is opposed by the Louisiana State Employees’ Retirement System.
Groups behind the push include the Louisiana Association of Business and Industry and the state branch of the National Federation of Independent Businesses.
The legislation, Senate Bill 22, narrowly cleared the Senate Retirement Committee 4-3 on April 19. It next faces action, and an uphill climb, in the full Senate.
Current rules allow teachers with 40 years of experience to retire at the age of 62 with full benefits. That means they qualify for the average of their last five years of salaries for the rest of their life, and those payments are not subject to the state income tax.
Teachers and state employees do not collect Social Security.
SB22 would boost the retirement age to 67 and apply to those who enter the teaching profession or state workforce on or after July 1.
Peacock said the impact for retirees would not be felt for 30 years or more and the change would gradually free up more dollars for teacher salaries and state aid to public schools.
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He said the new rules are especially needed because the average life expectancy keeps rising.
LFT leaders have helped lead the fight against the bill, urging their roughly 20,000 members to contact their state senators and ask them to oppose the measure.
The Louisiana Association of Educators, the state’s other teachers’ union, is also fighting the measure.
Tia Mills, president of the group, said allowing veteran teachers to leave the profession at the age of 62 with full benefits “is one of the last recruiting tools we have.”
Dawn Starns McVea, senior state director of the Louisiana and other branches of the National Federation of Independent Business, said Peacock’s bill is needed because the public sector “should make necessary changes to the pension system so that they can function properly for the long term.”
“The average age of retirement in the private sector has increased so it makes sense for the public sector to do the same,” she said. “At the end of the day, small business owners could face a big bill for public sector pensions if common sense reforms aren’t passed to maintain a stable system.”
Mike Faulk, executive director of the Louisiana Association of School Superintendents, noted the Legislature has taken action in recent years to put Louisiana’s retirement systems on sound financial footing.
“The issue continues to be the lack of people to fill vacancies in teaching positions,” Faulk said of his group’s opposition to the bill. “One of the fears we have is it is gong to discourage people from getting into the field of education.”
State education leaders often note that fewer people are entering the teaching profession in Louisiana, and that 1 in 5 teachers is either uncertified or teaching outside their area of expertise.
State Superintendent of Education Cade Brumley said 44% of new teachers leave the profession in their first five years and 61% in the first 10 years.
The Louisiana Association of Business and Industry backs the bill.
“LABI supports SB22 because it will decrease the long-term cost burden of Louisiana’s retirement systems by harmonizing the state retirement age with Social Security,” Bo Staples, LABI’s director of government reform, said in an email.
“We believe that this legislation is smart policy because it makes necessary reforms while also upholding the state’s commitments to current employees and retirees,” Staples said.
The board of the Teachers Retirement System of Louisiana voted to oppose Peacock’s bill.
Katherine Whitney, director of the group, said a teacher who enters the classroom at the age of 25 and works for 37 years can now leave at the age of 62 and collect $46,000 annually based on an average salary of $50,000. Whitney said that, under the proposed change, the same scenario would produce an annual retirement benefit of $28,000.
Peacock said the money needed to pay promised benefits for current and future retirees – called the unfunded accrued liability or UAL – totals $10.3 billion for teachers and $7 billion for state employees.
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Cindy Rogeau, executive director of the Louisiana State Employees’ Retirement System, told senators new state policies have allowed the system’s debt to be trimmed by $1.6 billion, and eventually $8 billion, by skipping cost of living increases for retirees.
“The best kept secret in Baton Rouge is the fact that the Louisiana Legislature has been one of the leaders in the nation for doing pension reform,” she said.
Peacock, a member of the Senate Retirement Committee for 10 years, issued a statement Friday that said he plans to amend his bill on the Senate floor to make it “more generous,” including pushing back the effective date to 2022.
He said in an interview modifying retirement systems is a challenge.
“People like to complain about it but when you start making changes it is very difficult.”