Sen. Seabaugh Again Combines Forces with LMA and Rep. Firment to Defund the Police, Make Police the Minority on the MPERS Board, Protect Municipalities That Refuse to Enroll Their Officers and Pay Their Bills, Decrease COLAs for Retirees, and Increase the Employer Contribution Rate for Everyone Else
Attention: your retirement system and benefits are under attack. If you have an opinion about that, you should consider doing the following six things immediately, for the reasons explained below:
- Get fired up by watching this impassioned speech by our retiree, Mark Kraus, in response to Louisiana Municipal Association (LMA) and Risk Management, Inc. (RMI, LMA's insurance arm) officials walking out of the MPERS Legislative Committee meeting. This happened the day after the LMA and RMI responded to MPERS' serious compromise offer (which would ensure retirement and insurance coverage at more affordable rates for all police officers who work for small municipalities that don't use them as ticket-writing and large revenue generating machines) with an offer that basically said, "How about you take $2,500 per municipality, let the municipalities not enroll their police officers (and continue to do so in the future), and waive all your police officers and their beneficiaries/survivors' rights to valuable benefits?" Supposedly, the LMA and RMI officials were upset for having to watch two presentations (one regarding tax qualification/IRS penalties and the other regarding the performance costs of adding four more trustees to the MPERS), both of which were made mostly for LMA and RMI's own benefit to show the harm that some municipalities' actions are causing and that LMA's bills would cause if made law. The bottom line is that they walked out of the second presentation and refused to negotiate in a public meeting, which is the only way MPERS' Board and Legislative Committee (as public bodies) can operate. And they won't tell MPERS exactly who at LMA is authorizing all of this legislation to increase the employer contribution rate (a guess: it may be someone who wants his or her municipality to continue 1. paying a 0% employer contribution rate while other municipalities pay a higher rate to compensate and 2. depriving his or her own police officers and their potential survivors/beneficiaries of valuable benefits).
- Email Sen. Seabaugh, Rep. Firment, Rep. Butler, the legislators on the House and Senate Retirement committees, and your own legislators and let them know what you think about MPERS-related bills. If you agree with the MPERS' Board of Trustees' positions on the bills, you can find a script to copy and paste here. If you have time, call your legislators and the committee members also. Inform Rep. Firment that you won't support any substitute that he might file for his police-defunding, employer contribution rate increasing, and COLA decreasing HB 42.
- Email Governor Jeff Landry's constituent services office with the same information and requests contained in the script.
- Call or email your local mayor and councilpersons and ask them to consider not paying his or her municipality's dues or fees to the LMA until representatives of the LMA and those doing their bidding stop acting against your municipality's best interests (we know of at least one large municipality who is seriously considering doing so). The municipalities who pay the most employer contributions to MPERS probably also pay most of the LMA's dues, all while LMA's lobbyists roam the halls of the Capitol lobbying against those same municipalities' interests. Why should your municipality pay to hurt itself and its citizens? You can punch yourself in the face for free.
- Next, call or email the LMA and ask them to withdraw all four of their police defunding and employer contribution rate increasing bills (HBs 42 and 52 and SBs 329 and 412) and wait for their newly hired director (who is an MPERS retiree and former MPERS board member and starts work on May 1st) to take over and hopefully handle business in a more logical and civilized manner.
- Pack the House Retirement Committee at the Louisiana State Capitol on Friday, April 5, 2024 (time to be announced later). This can make a huge difference. When you get there, ask about filling out an appropriate colored card (green for and red against) for each respective bill.
Regarding the fourth item above, while withholding LMA dues payments may sound extreme, given the LMA's defense of municipalities who don't pay their retirement contributions (and legislative efforts to make it harder for MPERS to collect), it is in no position to complain about those not paying LMA itself (or those who pay late). Significantly, the LMA has had four bills filed this legislative session to, among other things, increase the MPERS employer contribution rate by aiding and abetting those municipalities that deny their police officers (and their beneficiaries and survivors) valuable retirement benefits and fail to pay their contributions. With regard to Sen. Seabaugh, we suppose this is consistent, as he dislikes payroll deductions that help police. Unfortunately, the aiding and abetting by the LMA, Sen. Seabaugh, and Rep. Firment even extends to municipalities who withhold employee contributions from their paychecks but refuse to submit them to MPERS (aka theft). And, yes, that actually has happened and is happening.
So, what's all this about? It's pure retaliation for MPERS filing suit against several municipalities who failed to enroll their police officers and pay their bills. MPERS had no choice but to sue for several reasons, first and foremost because employer compliance is required for MPERS to maintain its tax qualified status with the IRS and not have to pay hefty fines and fees to the federal government. Of course, noncompliance also has the following effects:
- shortchanges police officers by depriving them and their beneficiaries/survivors of valuable benefits;
- increases the employer contribution rate for all law-abiding municipalities; and
- robs retirees of future cost-of-living adjustments, which can only be paid from employer contributions paid on enrolled employees' earnable compensation.
We've informed you about LMA's other police defunding and employer contribution rate increasing bills earlier, but their latest gem is SB 412 by Sen. Seabaugh.
What would SB 412 do? First, it would make police officers the minority on their own retirement system board by adding 4 more mayors (for a total of 6 mayors and 19 trustees, compared to a total staff size of 7). At MPERS' last Legislative Committee meeting, the committee (but not LMA representatives, who walked out during the middle of it) heard a presentation by representatives of Global Governance Advisors, who explained that larger boards have historically resulted in poorer performance (and will obviously cost more in general to operate). To state the obvious, this will increase the employer contribution rate.
Second, the bill increases the employer contribution rate by making it harder for MPERS to collect delinquent contributions. Currently, state law allows the treasurer, if a debt is certified by the retirement system, to withhold certain funds otherwise owed to a municipality in order to satisfy the municipality's delinquent payments. The bill seeks to eliminate this for MPERS (and no other retirement system). MPERS would be required to file suit against a delinquent municipality in order to collect. And it makes MPERS' claims subject to the Louisiana Governmental Claims Act. That means that, even if MPERS obtained a judgment against a municipality, the municipality's governing authority would have to appropriate the funds to pay the judgment.
Let's follow that logic. Municipality doesn't pay MPERS. The only way MPERS can now collect is by filing suit and obtaining a judgment against the municipality. If MPERS obtains a judgment, the only way MPERS can collect is to convince the municipality's governing authority (yes, the same deadbeat municipality that wouldn't pay its own bills and appropriate funds to pay MPERS employer contributions in the first place) to appropriate funds to pay the judgment. This probably only sounds logical to the LMA, Sen. Seabaugh, and Rep. Firment. Unfortunately, given police officers' protected status in Louisiana's Constitution, it would also be unconstitutional.
But wait, I thought LMA was upset about lawsuits? Now they are encouraging and even inviting them? Yes, and the bill itself would cause MPERS to file several lawsuits before it becomes law.
Finally, the bill increases the employer contribution rate by limiting any action instituted by MPERS to recover delinquent payments or damages associated with delinquent payments is subject to a liberative prescription of three years. We won't get into the complexities of prescription/statute of limitations, but it's safe to say that it doesn't and shouldn't start running until you actually file a monthly employer contribution report with MPERS (which LMA also doesn't want certain municipalities to have to do).
So, if all these things would increase the employer contribution rate, why is LMA pushing for this bill (and three other bills that do the same)? What about the police officers whose municipalities won't enroll them or pay their contributions? What about the future survivors? What about the fact that these delinquent and noncompliant employers are putting your retirement benefits at risk by potentially causing the IRS to call MPERS' tax qualified status into question? What about the municipalities who actually pay their bills and whose employer contribution rate will go up because of the LMA? What about the COLAs that retired police officers won't receive because of the LMA's actions? Like the drill sergeants used to tell people in basic training, "It's a question of mind of matter, Private. I don't mind, because you don't matter."
It seems the delinquent and/or noncompliant municipalities matter more to LMA than the law-abiding municipalities, police officers, and survivors and beneficiaries. We don't know why, but it's clearly illustrated by their actions this legislative session. As Susan Powter said, "Stop the insanity!"
