State Pension Debt Reduction Plan A No-Go

BATON ROUGE (AP) — A proposal to borrow money to help reduce state pension system debts is going nowhere.

         The idea was to borrow money that would be used to pay one lump sum and buy out the pensions of vested retirees who have not yet begun to draw their benefits. Waiting before drawing on a pension allows the retiree's pension to increase in value. Paying off the benefits of those retirees would reduce the state's $20 billion long-term debt obligations, called the unfunded accrued liability.

         But a state treasury official, the Legislature's actuary and two state retirement system chiefs all testified Monday that the idea was plagued with problems.

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         The Advocate’s Marsha Shuler reports the testimony came as the state House Retirement Committee took up a study resolution passed during the 2014 Legislature.

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