The American flag flies in front of Martin Hall at the University of Louisiana-Lafayette. (Getty Images)
Louisiana is considering adopting a phased retirement program that would allow higher education faculty and staff to gradually reduce their duties over the final years of their careers.
A legislative task force created earlier this year by House Resolution 143, sponsored by Rep. Tony Bacala, R-Prairieville, held its first meeting Wednesday and will meet over the next six months to study the feasibility of adopting such a system.
Bacala, who chairs the House Retirement Committee, sponsored legislation earlier this year that codified a wish-list of retirement reforms higher education faculty and staff put forward.
The task force must submit its report to Bacala’s committee by the end of the year.
Phased retirement programs are already in place for some federal government workers. Colleges and universities in Alabama, Florida, Illinois, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, New York, Utah, Virginia, Washington and Wisconsin have also adopted phased structures. Loyola University New Orleans, a private university, also offers the benefit.
A phased retirement option is desirable to faculty and staff because it allows older faculty and staff to continue to receive health insurance and accrue retirement benefits over the term of their transition to full retirement, which in other states typically lasts one to five years. Hanging on to experienced workers can also benefit newer workers who can benefit from their expertise, several task force members pointed out.
The key challenge its members will navigate will be the cost. Louisiana spends less on higher education than almost every other state, including in the area of faculty and staff retirement. Any legislation that requires an increase in state spending has had difficulty passing the legislature over the past couple of years as Gov. Jeff Landry has sought to constrain the state’s budget.
While Bacala’s retirement reform bill easily passed the legislature, it only did so after Bacala agreed to remove the most costly provision. It would have increased state contributions for certain higher education retirement plans from 6.2% to 8%.
“The issue with our systems are we can’t afford it,” LSU System interim chief financial officer Tommy Smith told his fellow task force members Wednesday.
Smith suggested that, as the legislature continues to pay off the Teacher Retirement System of Louisiana’s unfunded accrued liability ahead of schedule, legislators allow higher education to retain the savings realized from paying off that debt. University systems spend tens of millions of dollars in their annual budgets on these debt payments.
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