New Orleans Looks for Ways to Cut Pension Costs

cutting one dollar bill in half

The board of the New Orleans Municipal Employees Retirement System (NOMERS) – the city’s largest public pension fund – is considering a series of cost cutting measures, some that involve trimming benefits.

Under consideration: increasing employee contributions and raising the retirement age, according to The changes are currently being examined the system’s actuary.

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New Orleans Municipal Employees Retirement System board at a January meeting released a list of the potential alterations, which included raising the retirement age and increasing the amount of money employees are required to contribute. The board forwarded the possible changes to its actuary to evaluate how they would impact the health of the pension fund, benefits for employees and the city’s budget.


Nearly all the proposals it released at the January meeting would affect only future employees. That means the city wouldn’t see much relief for many years.

Raising the employee-contribution rate from the current 6 percent of salary to 7 or 8 percent is among the only proposals by the board that would affect current workers and immediately impact the unfunded liability.

The board is examining these changes under request from City Council President Stacy Head, according to, who asked the board last year to come up with a list of possible benefit changes.

Pension costs are eating up increasingly large chunks of the city budget, and it’s likely the Council is looking for ways to cut those costs in the future.

Louisiana considers pension benefits as a contract between employee and employer. It’s likely, then, that legal action would accompany any benefit changes.


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Union Leader Calls Out Christie, New Jersey For Playing “Fiscal Games” That Led to “Self-Made” Pension Crisis

Chris Christie

Patrick Colligan, the president of the New Jersey State Policemen’s Benevolent Association, has written an op-ed piece in the New Jersey State-Ledger expressing his discontent with the report recently produced by the state’s Pension and Health Benefit Study Commission.

In the piece, Colligan chastises Christie for playing “fiscal games” with the state pension system:

The Commission should tell the public about the fiscal games going on behind their backs. Before the ink was dry on the pension reform law the governor began using increased employee contributions to reduce employer pension payments. When the Legislature tried to close that loophole and use the extra contributions for pension funding, the governor vetoed it.

Add that to the failure of the state to make its actuarially required pension contributions and you have the making of a self-made pension crisis. It is worth noting if full PFRS pension payments were made during the last 15 years, it would be funded in the mid-90 percent ratio and no one today would be discussing pension reform.

New Jersey does a great job of shifting costs to employees without ever tackling the reason for those costs. Health benefits are a prime example. If the state were truly interested in reducing their health care costs they can take a number of bold steps. First, cut out insurance companies and administer its own healthcare network.

Second, rein in pharmacy benefit manager costs. How much do these PBMs make off the state? Requests for that information are repeatedly denied. Contracts for prescription costs should be required to show the true costs and rebates for the medicines involved and how much of those costs are enriching the companies brokering the deals.

Finally, the state has too many health plan choices with no real cost containment strategies. The State could consider innovative approaches to control costs like State Health Benefits Program-owned patient care centers, and wellness and disease management.

Contrary to popular belief, no one wants a healthy, well-funded and long-lasting pension and health care system more than the people who pay for it and count on it for their retirement. Put us at the table and have an open mind about our thoughts, and the state would be shocked how fast pension and benefit costs are brought under control.

Colligan also spends a good portion of the piece talking about the funding situation of the Police and Firemen’s Retirement System (PFRS).

Read the whole piece here.

Quebec Stays Course on Pension Reforms In Face of Mounting Protests

Canada blank map

Protestors are flooding Montréal streets in opposition of Quebec’s Bill 3, a measure that would freeze COLAs for retirees and increase employee contributions.

But the government isn’t willing to reverse course on their plan to lower the costs of the province’s pension system. Bill 3 is expected to pass within a month. From the Montreal Gazette:

The provincial government won’t budge on the proposed reform of municipal pension plans, Municipal Affairs Minister Pierre Moreau said Tuesday, three days after the largest protest yet against Bill 3 was held in Montreal.

“We are not in a bargaining situation,” he said. “The government and experts have said, in a report that was welcomed by everyone in the National Assembly, that there was an urgency to act to save those pensions. That’s what we’ve done.”

The minister said the government is done consulting interested parties, including union leaders, retiree representatives and the Union des municipalités du Québec, and has moved on to drafting the bill. Union leaders called the hearings a “farce.”


The government won’t necessarily wait for actuarial reports on the health of the pension plans to be published next month before passing the bill, Moreau added.

“Having the numbers doesn’t change anything,” he said. “It doesn’t change anything for the pensions that are totally under-financed.

“For example, even if I don’t know your weight, if you’re overweight I know you’re in precarious health.”

Bill 3 is part of a larger austerity plan to cut government costs and pay down a deficit of nearly $4 billion.