BATON ROUGE, LA (NBC33) — A Baton Rouge judge has ruled Governor Bobby Jindal's 401 (k)-style retirement plan for state employees unconstitutional.
“We are disappointed in the court's ruling and we look forward to a successful appeal,” Governor Jindal said. “We’re confident that the bill was constitutionally passed.”
Judge William Morvant made the ruling on Act 483, known as the Cash Balance Plan (CBP), on Thursday, Jan. 24.
The Retired State Employees Association of Louisiana (RSEA) filed the lawsuit on August 16, 2012. The suit challenged the constitutionality of HB 61, claiming that the law required a two-thirds vote because “an actuarial cost was associated with its enactment, based on Article X – Section 29(F) in the Louisiana Constitution.” The bill was passed by the House of Representatives lacking the 70 votes.
“Because this was a measure for future rather than current employees, we believed then – and still do – that the bill called for a simple majority vote. The judge ruled differently,” Chuck Kleckley, Speaker of the House, said.
If the act remained it would have affected future non-hazardous duty state employees of the Louisiana State Employees’ Retirement System, post-secondary education members of the Teachers’ Retirement System, and would have been optional for certain Louisiana School Employees’ Retirement System members. It would have taken effect for new hires beginning on July 1, 2013.
“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,” Governor Jindal concluded.
This is the second bill passed during the 2012 legislative session to be challenged and ruled unconstitutional. The first was the school voucher program, which was ruled on by Judge Tim Kelley.