It wasn't exactly a secret that Gov. Bobby Jindal wanted to tinker with public pension systems. His policy advisors dropped hints about it over the Christmas holidays and soon thereafter met with potential allies. Jindal unveiled his plan Jan. 25 at a Baton Rouge Rotary Club luncheon.
But as his staff prepared legislation to drastically alter pension programs for state workers, Jindal changed his own retirement schedule. According to documents released by the Louisiana State Employees' Retirement System (LASERS), Jindal added 2.2 years worth of service to his retirement plan on Jan. 4.
Five days later he began his second term. All the while, he was developing proposals that raise state employees' retirement contributions by 3 percent — ostensibly to address the state's current (and growing) $18.5 billion retirement debt — and raise the retirement age (after accelerating his own retirement date). Jindal wants to put state employees' increased contributions into the general fund, however, not toward reducing Louisiana's retirement debt. A report just released by the Legislative Auditor questions the constitutionality of Jindal's retirement proposals.
Meanwhile, as a result of his personal retirement finagling, Jindal is now halfway through his second four-year term, as far as his retirement benefits are calculated, even though that term began only three months ago. Tonja Normand, LASERS' public information director, explains: "Together, the 2.2 years of credit restored and the four years earned during his first term as governor total about 6.2 years of service."
Though legal, Jindal's move may bode ill for his retirement "reform" bills. Jindal spokesman Kyle Plotkin disagrees, saying the governor merely followed LASERS' process for repurchasing and restoring credit. "It has nothing to do with the changes," he says, referring to Jindal's proposed legislation.
Baton Rouge blogger Tom Aswell, who holds forth on LouisianaVoice.com, was first to expose Jindal's move. "This would appear to be yet another shameless display of Jindal's total contempt for state employees and his relentless agenda of self-promotion," Aswell wrote in a post last week.
Jindal broke no laws, however. He earned the 2.2 years of service that he added back to his plan when he served as secretary of the Department of Health and Hospitals under former Gov. Mike Foster from 1996 to 1998. When he left that post to head up the National Bipartisan Commission on the Future of Medicare, he requested a "refund of employee contributions," which state employees often do when they leave state government.
The refund amounted to roughly $15,000 — which did not include forfeited interest and investment earnings on Jindal's original contributions. When he bought back into the system earlier this year, he put the refund back — plus some $27,000 in interest and penalties, bringing his total reinvestment to about $42,000.
LASERS guidelines explain how Jindal restored his previously forfeited credit and placed it into his retirement plan as governor: "In order to reestablish forfeited creditable service, a former member must again be employed in state service and be a contributing member of the system for at least 18 months. The member may then repay the refund plus interest as established by law."
According to LASERS' guidelines, increasing credit in a plan "may qualify a member for earlier retirement eligibility and/or an increase in monthly retirement benefit."
Whether those perks will eventually justify Jindal's $42,000 reinvestment remains to be seen. A lot depends on how long Jindal stays in LASERS and what his future salaries look like. Plus, market conditions could skew the benefits — for Jindal and all other LASERS participants.
Equally telling could be the extent to which Jindal succeeds in rewriting the rules for LASERS. At a minimum, that may help us understand the governor's latest moves, even if we don't like what we learn.
Jeremy Alford is a freelance journalist in Baton Rouge. Email him at email@example.com or follow him on Twitter: @alfordwrites.