BATON ROUGE (CNS)—The Retired State Employees Association (RSEA) Board of Directors has authorized the RSEA staff to move forward with the hiring of an attorney to proceed with litigation challenging the constitutionality of recently passed House Bill 61 by Rep. Kevin Pearson (R-Slidell) which became Act 483 of the 2012 Louisiana Regular Session, upon the signature of Gov. Bobby Jindal.
The act, commonly referred to as the “Cash Balance Plan” (CBP), is future, non-hazardous-duty state employees of the Louisiana State Employees’ Retirement System (LASERS), post-secondary education members of the Teachers Retirement System of Louisiana (TRSL), and is optional for certain other members of Louisiana School Employees’ Retirement System (LSERS) hired on or after July 1, 2013.
The act is being challenged on constitutional grounds with RSEA claiming that it did not receive a two-thirds vote in the House of Representatives as required under Article X, Section 29(F) of the Louisiana Constitution to enact benefit provisions for members of any public retirement system which has an actuarial cost.
The bill passed by a majority of the House (68-36) but lacked the required 70 votes.
The two-thirds vote was required since the legislative actuary determined that the CBP has an actuarial cost. The actuary wrote in his official legislative actuarial note that “the Cash Balance (CB) Plan will cost more than the current Defined Benefit (DB) Plan.”
The constitutional requirement was intended to add an extra level of protection against increasing the costs of the retirement systems, RSEA said.
“It is therefore the conclusion of RSEA and our attorneys that this legislation requires a two-thirds vote for passage, rather than a simple majority,” said Frank Jobert, Jr., executive director of RSEA.
RSEA President Benny G. Harris said members of the RSEA board of directors, representing the interests of current and future state employees and retirees throughout the state, “could not let the defined benefit retirement plan fall by the wayside on their watch by virtue of a ‘defective’ piece of legislation without a property legal challenge in the courts.
Attorneys Robert Tarcza of New Orleans and Robert Klausner of Plantation, Florida, are handling the case for RSEA and plan to file suit in 19th Judicial District Court in Baton Rouge next week. To be named as defendants will be the State of Louisiana, Gov. Bobby Jindal, and State Treasurer John Kennedy.