Louisiana state employees' pension system disputes dour report

By Jeff Adelson, The Times-Picayune

Louisiana's largest state employee pension system is pushing back against a report issued by a national nonprofit this week that gave dismal marks to the state's pension systems. The Louisiana State Employees' Retirement System said the Louisiana section of the report by the Pew Center on the States, which analyzed public pension systems across the country, was inaccurate and did not credit the state's efforts to put its retirement systems on more solid footing in recent years. A news release from the retirement system Wednesday said that despite investment losses in 2008 that reduced the system's assets, the fund is recovering and receiving all payments needed to keep it sound. That includes a 24 percent return on investments in the past year, which was not covered by the report.

In "examining historical returns, the system has kept pace with expectations," according to the release.

Gov. Bobby Jindal put a significant emphasis during the recently ended legislative session on dealing with the more than $18 billion gap between the amount of money in the four statewide pension systems and the amount needed to fully pay out all their promised benefits. But the Legislature shot down most of the governor's proposals, which would have required workers to retire later, pay more of their own money into the pension system and potentially receive smaller pension checks. Opponents of those plans argued it was unfair to change the rules on workers in midstream and that such efforts were potentially unconstitutional in light of promises enshrined in the state Constitution protecting retirement benefits for state workers.

Only one of Jindal's major pension proposals was signed into law. That plan will put newly hired workers into a 401(k)-style system where their retirement benefits are largely dependent on the performance of investments rather than a traditional pension that guarantees retirees receive a specific benefit based on years of service and salary.

The plan was mentioned in Pew's report but the LASERS response noted that the report did not give the state credit for other changes implemented in recent years, including changes to the contribution rates and retirement dates for new hires. The Pew report recommended changing those aspects of retirement plans in a broad outline of how states should move forward.

The Pew report also incorrectly asserts that the state had not made full contributions to the retirement system three times between 2005 and 2010. Officials with LASERS said that was not the case.

"LASERS is receiving the necessary annual payments from the State to satisfy its liabilities," according to the LASERS news release.

Jeff Adelson can be reached at jadelson@timespicayune.com.