LASERS Executive Director Cindy Rougeou welcomed state agency human resource (HR) staff to the LASERS Annual Open Forum on Wednesday, August 28. The meeting is an opportunity for LASERS to share the latest news and changes affecting retirement for LASERS agencies and members and hear concerns from the HR community.
In her opening remarks, Rougeou addressed the sustainability of LASERS. She commented that questions have been raised about the soundness of pension systems given the recent news about the bankruptcy filing of the city of Detroit. "We are not Detroit. We are not going bankrupt," said Rougeou.
In addition to a 10-year market return of 8.2 percent and a 2013 fiscal year market return of 12.6 percent, Rougeou pointed to a 10-year cash flow analysis that LASERS recently completed. While LASERS has paid out over $7 billion in benefits in the past 10 years, the System has collected $11 billion from contributions and investment earnings. Because 90 percent of our retirees stay in Louisiana, she noted that the benefits they have earned and expend result in a powerful and positive economic generator on our state's economy.
Rougeou also gave an overview of the payment schedule of the Unfunded Accrued Liability (UAL), which is the debt owed by the State to the System. On the current payment schedule, in nine years, the UAL is set to drop by $1.4 billion and by $4.4 billion in 20 years.
Rougeou also touted recent cost-saving measures, stating, "It is too often forgotten that since 2005, the Legislature has made significant changes or reforms to the benefit structure. With the passage of Act 75 of 2005 and Act 992 of 2010, the cost of LASERS rank-and-file plans will be reduced by nearly $800 million," Rougeou said.
Rougeou also commented that LASERS member benefits are funded during the active working life of the member, unlike Social Security which operates as a "pay-as-you-go" system. She reassured attendees that LASERS benefits are protected by the Constitution, as is the financial soundness of the System.