Power and privilege fought back when a particularly dismal report shed more light on Louisiana’s overgenerous, underperforming pension systems, illustrating the attitudes behind why the state faces this looming crisis.
The Pew Center on the States, not known for its hyperbole but rather for its quality in research, noted the poor fiscal health of Louisiana’s pensions systems was close to the bottom of the states. With a recommendation that a pension system be 80 percent funded, at 57 percent the state is now about $19 billion short of that mark. The same information was used by supporters of system reform to argue for changes that would have employees pay their fair share for the generosity of their benefits as at this underfunded level taxpayers are pitching in an extra nearly $1 billion a year to offset.
However, this fix was opposed bitterly by the retirement systems and their interest group allies, resulting in deferral of the legislation and kicking the can down the road some more. Reform would reduce the amount of money coming into the fund and with the generous payouts; never forget that agencies and bureaucrats always prefer more resources than fewer both to get and give because more brings more power. Reform also directs unwanted attention to the systems’ subpar investment performances. These two reasons explain why the unfunded accrued liability has doubled in the past dozen years.