Matthew Green, an assistant professor of education at the University of Louisiana at Lafayette, wants to finish his career in the state but said he feels like his poor retirement prospects are an incentive to leave.
Green is one of more than 6,000 public colleges and university faculty and staff members who’ve enrolled in the state’s portable or “optional retirement plan,” which allows them to take their accrued benefits with them if they choose to leave Louisiana for another job. In exchange for that portability, employees lose out on more lucrative benefits through a fixed, pension-style retirement plan offered to most state employees.
But as professors earn tenure and key personnel stay in place longer, the inability to switch over to the fixed benefit plan with a higher payout makes Louisiana less attractive for employees who want to finish their careers here.
“You want the faculty to stay long term,” Green said in an interview with the Illuminator. “You want people to stay at the universities, and it almost becomes a disincentive in that aspect that you’re not able to get back in [the fixed benefit plan] once you have the job security.”
The Louisiana State Employees Retirement System (LASERS), unlike the plan available to state college faculty and staff, allows its participants to switch from a portable retirement plan to a fixed pension under certain circumstances.
State Rep. Barbara Freiberg, R-Baton Rouge, has authored a bill to allow campus employees in the optional retirement plan of the Teachers Retirement System of Louisiana (TRSL) to switch into the defined benefit plan, but similar proposals have failed eight times over the past two decades.
Under Freiberg’s bill, a university employee who switches to the defined benefit plan would start at year zero for the purposes of retirement — meaning their benefit calculations would be based on the switch-over date, not when their employment began, although they would retain their contributions to their optional retirement plans.
Proponents of the bill are hopeful the proposal will fare better under a new legislature and a new governor. The proposal was most recently brought up in 2016 at the request of LSU administrators. Being perceived as an LSU bill, it failed due to tension between the university and the legislature
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In addition to the lack of flexibility, some Louisiana university faculty and staff say retirement system administrators were not forthright when they pitched TRSL’s optional retirement plan. Nearly a dozen employees told the Illuminator they were not properly educated on what signing up for the plan meant for their retirement, and some even said they felt pressured into signing up by aggressive commission-based salespeople for the plan administrators.
Green and other professors said they weren’t aware they would have to forgo Social Security benefits when they agreed to participate in the optional retirement plan.
The problem hasn’t just impacted faculty; hundreds of staff members at state campuses are also in the optional retirement plan. LSU Staff Senate President Josh Duplechain said the lack of education was a huge problem.
“Years ago, you were presented as a staff member new to LSU with two options — one was TRSL and one was ORP (optional retirement plan) — and what staff were told was, ‘Well look, if you don’t plan to be here for your entire career, then you shouldn’t take the TRSL option, you should go with ORP,’” Duplechain said.
TRSL referred questions to the Louisiana Department of Treasury’s Social Security Division, which has not yet responded to a request for comment.
Allowing campus employees to switch to a fixed benefit plan when they commit to staying Louisiana would be a valuable retention tool, proponents say.
“What we’re finding is sort of middle-career faculty members are ending up getting these opportunities in other states where they can join into a defined benefits plan,” LSU public administration professor Roy Heidelberg said. “And so they’re leaving for reasons that are pretty easy to address, if we could offer them the same opportunity.”
Green is in the early stages of his career in academia and still has time to change course. If he could switch to a fixed benefit plan, he said it would make him more likely to stay in Louisiana. If he can’t, he said he might seek greener pastures.
Some professors are choosing to stay on the job longer because they can’t afford to retire on the less lucrative portable retirement plan’s benefits. It’s creating a sort of gerontocracy in higher education, LSU professor Kevin Cope said, where older faculty members are in charge — perhaps past their prime.
Cope has taught English at the university for four decades. He and another 40-year LSU professor, Roger Laine, are suing the university and the retirement system. They claim LSU does not meet the criteria to exclude its employees from Social Security, and that the university misrepresented the facts about its optional retirement plan.
According to the lawsuit, if Cope were to retire, his optional retirement plan account would provide him $21,000 per year. As a full professor with decades of experience, he is a relatively high earner with a salary of $116,000. If he had been in the fixed benefit plan, Cope would qualify for a significantly higher retirement salary.
Cope and Laine’s lawsuit is scheduled for trial in August.
If Cope and other professors in his position could retire, he argues the state could save a considerable amount of money. It would also open up the world of academia to younger scholars with new ideas, he said, which could potentially offer an economic boost to the state, considering the economic impact of research universities.