report from The Advocate
by Marsha Shuler
Parish school boards and state
government won’t have to come up with extra contributions to fund pension plans
for their employees in the new budget year.
The Public Retirement Systems’
Actuarial Committee on Tuesday sidelined proposals that would have caused
school boards to contribute $100 million more than anticipated and the state an
extra $40 million in the fiscal year that starts July 1.
The recommendations came from the
Legislative auditor’s office actuary as he looked at the financial health of
the pension plans both of which have substantial long-term debts.
The panel instead opted to adopt
evaluations proposed by the actuary for the Teachers’ Retirement System of
Louisiana and the Louisiana State Employees Retirement System — numbers
that have been used in state government and school board budgeting.
The committee’s action means that
school board contributions to the teachers retirement system will be $1.15
million in the new fiscal year while the state will put up $760.45 million. The
state contribution amounts to about $20 million less than the current fiscal
“State agencies and school boards
already prepared their budgets for the upcoming year. They prepared them based
on the only evaluation that they had (from the retirement systems),” said state
Sen. Elbert Guillory, R-Opelousas. “The change in the contribution rate now
would require … cuts in line items, employee cuts, pay increase proposals would
have to be canned, layoffs. The word chaos would not be inappropriate.”
The legislative actuary’s
valuation took a more conservative approach to investment earnings than the
systems’ actuary. The difference would have resulted in higher employer
contributions being required under the legislative actuary’s plan — a
thought that set off shock waves, particularly among parish school board
The actuarial committee is tasked
under state law with adopting the annual actuarial valuations and required
contributions to the state employee and teachers retirement systems.
It considers analysis done by
both the systems and Legislature’s actuaries.
Guillory and others said the
panel needs the analysis much earlier because of potential ramifications of
decisions that are made.
“When we receive evaluations
substantially different it makes it difficult. The timing is very awkward,”
said committee member Charles Hall, a pension actuary.
Guillory said he wants the panel
to start getting information by Oct. 1 on the retirements plans status.
“I think over the next six months
this committee needs to lay the groundwork where we need to go and get this
done in a much more timely fashion in the future,” agreed Legislative Auditor
Daryl Purpera, panel chairman.
Purpera said he is concerned
about pension plan debts which will start being reflected on the state
financial statement in 2015.