State lawmakers can join retirement system through loophole
From: Shreveport Times.
BATON ROUGE — While a constitutional amendment adopted in 1996 bans Louisiana legislators from joining the Louisiana State Employees Retirement System, there’s a way around even the constitution.
Some state legislators remain in the system through a “grandfather clause,” and some new lawmakers are taking advantage of a loophole in the ban.
Public outcry over legislators receiving retirement pay for what was considered a part-time job and lawmakers accruing benefits at a faster rate than regular state employees led to passage of the 1996 constitutional amendment that prohibits future legislators from participating in the retirement system.
However, a loophole allows any legislator who had been paying into another government retirement system to transfer those years to LASERS. And even if there was no retirement system, the years of service on any governmental body — even a non-paid commission — could be applied by paying a lump sum to LASERS that equals the amount of wages that would have been deducted toward retirement during those years.
For example, former Gov. Mike Foster bought time in LASERS and boosted his retirement benefit by paying for the years he served on the West St. Mary Parish Port Commission, an unpaid position.
As written, the constitutional ban that became effective Jan. 1, 1997, allows legislators who have previous governmental service to join LASERS.
That includes, according to Article 10, Section 29.1 of the constitution, “Any legislator or any member of a school board, levee board, police jury, or parish council “» Any member of a city council, city-parish council, or town council or any alderman or any constable “» Any member of a board or commission established by the state of Louisiana or any instrumentality or political subdivision thereof unless authorized by law enacted by two-thirds of the elected members of each house “» (and) Any person holding or serving in any other elected or appointed position or office defined to be part-time public service by law enacted by two-thirds of the elected members of each house.”
However, LASERS Assistant Director Maris LeBlanc points out, it doesn’t include mayors or parish government presidents unless they first served as a council member and joined a local retirement system.
“If a member receives a higher salary during the last 36 months of their service, the retirement benefit is increased,” LeBlanc said. “The total amount of increase will depend on the date of retirement.”
Because of the way retirement systems calculate benefits, based on years of service and the most recent salary, the only benefits of transferring previous experience to LASERS are if the new salary is more than the prior one and if a person needs more years of service to qualify for retirement.
LeBlanc said a legislator can qualify for retirement at any age after 16 years service (four terms) and at age 50 with 20 years total (legislative or in combination with local government), as long as 12 years are in the Legislature. If a legislator is 55 or older, all that’s needed is 12 years in the House or Senate.
Term limits restrict House and Senate members to three terms (12 years), but they can run for office in the other body.
LeBlanc said most legislators who claim retirement receive “less than the average rank and file benefit.”
Several legislators who are LASERS members have gone on to higher paying government jobs, so their retirement benefits are higher.
Some who leave office before becoming eligible for retirement benefits can claim a lump-sum refund of what they paid into the system, LeBlanc said, but others leave their money in the system until they become old enough to claim full benefits.
The legislators who joined LASERS in 2008 after their initial election all have previous service in local government.
Rep. Richard Burford, R-Stonewall, was a DeSoto Parish police juror and Rep. Herbert Dixon, D-Alexandria, was a longtime teacher and Rapides Parish School Board member and Rep. Rickey Hardy, D-Lafayette, was a Lafayette School Board member.
Rep. Elton Aubert, D-Vacherie, was a member of the St. James Parish Council, and Rep. A.B. Franklin, D-Lake Charles, was a City Council member. Rep. Nita Hutter, R-Chalmette, who is not seeking re-election, joined LASERS using prior local government service.
Legislators who were already participating in LASERS when the constitutional amendment was adopted were Rep. Wayne Waddell, R-Shreveport (now the director of the Louisiana State Museum in Shreveport), Rep. Noble Ellington, D-Winnsboro (who is not seeking re-election), Sen. Troy Hebert, D-Jeanerette (currently the commissioner of motor vehicles), Sen. John Smith, D-Leesville, Senate President Pro-tem Sharon Weston Broome, D-Baton Rouge, Sen. Yvonne Dorsey, D-Baton Rouge, Sen. Danny Martiny, R-Metairie, and Sen. Ed Murray, D-New Orleans.
Others in LASERS, Sen. Rob Marionneaux, D-Livonia, Sen. Butch Gautreaux, D-Morgan City, Senate President Joel Chaisson, D-Destrehan, can’t seek re-election because of term limits.
A number of other current legislators who were in office in 1996 chose not to participate in state retirement system, including Sens. Mike Michot, R-Lafayette, Robert Adley, R-Benton, and Joe McPherson, D-Woodworth, who were in the state House of Representatives at that time. They were among those who believed legislators should not qualify for state retirement.
Michot and McPherson cannot seek re-election this year because of term limits.
At least one lawmaker — longtime legislator Sen. John Alario — already is collecting benefits. His 2010 financial statement shows he made $36,873.08 in Senate salary and more than $68,000 in state retirement benefits — $30,837.62 from LASERS and $37,230.72 from the Teachers Retirement System. An online profile says he was a school teacher from 1965 to 1966.