A Louisiana district court judge on Thursday struck down as unconstitutional a recent law establishing a cash balance plan for some employees in three of the state’s pension funds.
The law, signed by Gov. Bobby Jindal, established a cash balance plan for selected employees hired on or after July 1, 2013, in the $13.9 billion Louisiana Teachers’ Retirement System, the $9.6 billion Louisiana State Employees’ Retirement System and the $1.5 billion Louisiana School Employees’ Retirement System, all of Baton Rouge.
Judge William Morvant’s Thursday ruling follows a lawsuit filed in August by the Louisiana Retired State Employees Association in the 19th Judicial District Court for the Parish of East Baton Rouge.
The suit alleged the law was unconstitutional because the 68 votes received in the Louisiana House of Representatives on May 30 to move the bill to the Louisiana Senate were not sufficient due to Louisiana Constitution Article X, Section 29 (F), which requires a two-thirds majority to enact benefit provisions for members of any public retirement system. It would have required 70 votes to reach that two-thirds majority.
“We are disappointed in the court’s ruling, and we look forward to a successful appeal,” Mr. Jindal said in a statement. “We’re confident that the bill was constitutionally passed. The cash balance plan will help get our debt under control, protect taxpayers and provide new state employees with a portable retirement account that realizes investment earnings.”
Frank L. Jobert Jr., executive director of the Louisiana Retired State Employees Association, was not available for comment.