Tuesday, May 21, 2024

Investments for Louisiana’s public pension funds took big hits in 2022

by BIZ Magazine

By Victor Skinner | The Center Square contributor

The Louisiana Legislature’s Public Retirement Actuarial Committee approved a series of valuations on Tuesday, providing an update on how the state’s various public employee retirement systems fared in 2022.

Actuary Greg Curran told the committee active membership in the Firefighters’ Retirement System of Louisiana declined last year by about 56, while payroll increased from $249 million to $253 million, and payments hit nearly $115 million.

The system’s funded ratio stood at 80.41%, with $2.8 billion in liabilities and $2.2 billion in assets.

“Our funded ratio did increase over the year,” he said, “but obviously we’re still working toward the 100% funded level.”

The remaining unfunded balance decreased from $524 million to $491 million in the last fiscal year, and is expected to be paid off in 12 years, he said.

The firefighter retirement system’s market rate of return was negative 10.9% last year.

The Clerks’ of the Court Retirement & Relief Fund had a slight reduction in active membership, and an increase in the retired population to 1,570. Payroll grew by about $800,000 to $99.9 million, while benefits and payments grew to $47.3 million.

The plan’s remaining liability, scheduled to be paid off by 2029, was $54 million, putting the plan’s funded ratio at about 81%.

“A trend for many of our plans has been … an increase in that funded ratio, and that’s certainly the goal,” Curran said.

The return on market assets last year was a negative 9.8%, a stark reversal from the 27.2% return the year prior.

Neither the firefighters’ or court clerks’ retirement systems qualified to offer cost of living adjustments this year, Curran said.

For the District Attorneys’ Retirement System, membership was also down from 726 to 719 in 2022, though payroll increased to $63.9 million, with benefits and payments at $29 million. That plan is funded at 87.12%, with an accrued liability of $587 million and assets of $511 million, Curran said.

The plan had a negative 10% return in the market, compared to a 23% return the year prior.

The District Attorneys’ plan did provide a COLA that increased costs by 1.1%, Curran said.

The Municipal Employees Retirement System’s two plans decreased in membership. Plan A membership went from 4,611 to 4,513, as the number of retirees grew and payroll increased.

Benefits and payments increased to $76.3 million, while accrued liability stood at $1.28 billion and assets at $946 million. Plan A has an unfunded accrued liability that’s expected to be paid off by 2029.

The funded ratio was 74.09% in 2022, while the market rate of return was negative 10.1%, Curran said.

“Most of the systems actually generated larger dollar losses in 2022 than their gains in 21,” he said.

A COLA for that plan in 2022 cost just over $10 million, he said.

With Plan B, there was a slight growth in membership, and a $4 million increase in payroll to $79 million. Benefits and payments also increased from $13.5 million to $14.6 million. The funded ratio for the plan was 76.19% in 2022, up about 2%.

Market losses were negative 9.6%, Curran said.

A Plan B COLA cost a little over $1.5 million, he said.

Membership in the Municipal Police Employees’ Retirement System also declined in 2022 by about 200 to 5,269, while the retired population increased to over 5,000.

Payroll grew along with benefits, which hit $179 million. The funded ratio declined to 77.14%, due in part to a negative 10.4% market rate of return. Accrued liability stood at $3.4 billion, compared to assets of nearly $2.7 billion, Curran said.

Other retirement plans reviewed on Wednesday include the Registrars of Voters Employees’ Retirement System and the Louisiana Sheriffs Pension & Relief Fund. The committee approved all of the actuarial valuations.

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