Over the past two decades, Louisiana lawmakers have rejected eight separate proposals to give college faculty members and staff better retirement prospects. Higher education leaders are hopeful this is the year a compromise is reached.
Faculty and staff want an option available to most state employees: to be able to switch from the portable or “optional retirement plan” to the more lucrative defined benefit plan of the Teachers Retirement System of Louisiana (TRSL), which offers a fixed, pension-style retirement plan.
There are about 6,000 higher education employees in the Teachers’ Retirement System’s portable plan, which allows them to take their retirement savings with them if they take a job outside the state’s public university systems. But as some participants have aged, they find themselves unable to retire because they haven’t seen adequate returns from their retirement investments and do not qualify for Social Security as state employees.
Faculty and staff leaders say 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.
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.
Rep. Barbara Freiberg, R-Baton Rouge, has authored a bill to allow campus employees in the TRSL optional retirement plan to move to the defined benefit plan, similar to proposals that have failed repeatedly since 2000.
Under Freiberg’s House Bill 31, 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 contributions to their portable retirement plans.
Proponents of the bill are hopeful the proposal will fare better under a new Legislature and governor. The most recent version was brought up in 2016 at the request of LSU administrators. Perceived as a measure that favored LSU, it failed amid tension between the university and state lawmakers.
A similar bill that would have allowed optional retirement plan members to buy their way into the defined benefit plan on an actuarial basis has also been proposed multiple times.
It last came up in 2022 but failed when it was realized that although it was designed to be cost neutral, it would cost the state millions of dollars.
Because the legislation would result in an actuarial cost, the Louisiana Constitution requires two-thirds of lawmakers to approve it rather than the usual simple majority — a very high bar to clear even in chambers with partisan supermajorities.
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‘She Got the Goldmine’
Six versions of retirement plan switch bills have been killed in legislative committees. Just one made it to the floor in 2006, but never got a vote after its author, Rep. Warren Triche, D-Chackbay, said a lobbyist from an optional retirement plan (ORP) provider — who he referred to as a “hired gun” — pressured him into tabling the bill.
“I then figured out that somewhere, somehow they weren’t gonna try to let anybody out of ORP,” Triche said in a committee meeting on the same bill he sponsored the following year.
Triche’s bills would have allowed optional retirement plan participants to buy their way into the defined benefit plan.
Triche, then a professor at Nicholls State University, told the committee the situation reminded him of a Jerry Reed song: “She Got the Goldmine (I Got the Shaft).”
“I think employees in this particular system are getting the shaft because after you look at it, and after you listen to all the employees… that are in this plan, they in effect do get the shaft after a certain period of time,” Triche said. “The people who are behind ORP, the people who run it, are the ones who get the gold mine.”
One of the reasons optional retirement plan participants feel they are “getting the shaft” is because they allege retirement system administrators were not forthright when they pitched TRSL’s optional retirement plan. Nearly a dozen employees at Louisiana universities 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.
Some professors said they weren’t aware they would have to forgo Social Security benefits when they agreed to participate in the optional retirement plan.
That lack of education — and the misinformation — was cited in multiple bill hearings.
But despite that testimony and emotional pleas from aging workers, the bills typically failed in the face of institutional opposition.
The Teachers’ Retirement System of Louisiana has typically remained neutral on the legislation, but testimony from its representatives tended to be negative and was often enough to sway legislators. In one case, a TRSL representative referenced an optional plan sign-up form from the early 1990s she found. On the top, in bold letters, she said, participants were warned joining was an irrevocable decision.
TRSL has not yet taken a position on Freiberg’s bill.
Throughout the years, legislators repeatedly cited a reluctance to allow participants to revoke what was always meant to be an irrevocable decision, sometimes arguing participants had to live with the consequences of their actions.
A compromise
Higher education leaders hope to mitigate those concerns by limiting the ability to switch to current participants in the optional retirement plans.
Under Freiberg’s proposal, only those in the optional retirement plan as of June 30 will be able to switch and will have to make their decisions by Dec. 30.
Although proponents feel that short window is a step short of giving TRSL optional retirement plan members the same rights as those in LASERS, they say it can act as a powerful retention tool.
Josh Duplechain, LSU Staff Senate president, said the limited time frame is not a big concern to university staff, as they have taken on the role of educating new hires about the perils of the optional retirement plan.
Switching into the defined benefit plan would not be a viable option for late-career higher education employees, Duplechain said, as they do not have enough time before retirement to accumulate the necessary time on the job to get the pension. That mitigates the possible costs those high-earners pose to TRSL.
For early to mid-career workers, those who still have many years of work ahead of them, Freiberg’s proposal would mean a career at a Louisiana university — and a full retirement at the end — is a more attractive option and could help retain valuable staff members, Duplechain said.
It’s not a perfect solution, faculty leaders say, as it doesn’t alleviate the concerns of late-career professionals with meager retirement accounts. Some of those employees are looking to the judiciary for relief.
But it is a solution for many — one that has been endorsed by faculty and staff bodies at multiple universities.
“It’s a good start,” University of Louisiana at Lafayette Faculty Senate President Phil Auter said. “People that want something may not get everything they want but they’re getting something.”