Last Modified: Friday, January 25, 2013 6:35 PM
A jump in retirements by state employees and public school teachers is adversely affecting those groups’ pension system.
In one system, the Louisiana School Employees Retirement System, there are more retired members than active ones. In the Louisiana State Police Retirement System there is a one-to-one ratio between retirees and active members.
That’s only likely to add more pressure on retirement systems that already have substantial unfunded accrued liabilities.
Over the past two years, the Louisiana State Employee System has lost 6,000 active members. The Teachers Retirement System of Louisiana has lost more than 4,000 active employees over the same time period, and the current year’s teacher retirements are on a pace to outdistance last year’s numbers.
The State Employee System’s dip in the active ranks can be traced to state budget cuts and privatization of some functions of the state agency. Budget cuts have also resulted in the thinning of state police active rosters.
The spike in teacher retirements has been attributed to education reforms pushed by Gov. Bobby Jindal.
It’s an actuary’s nightmare, not to mention employers who are having to foot more of the bill. In the case of the teachers and school employees retirement system, that burden falls on school boards.
Maureen H. Westgard, executive director of the Teachers Retirement System of Louisiana, said school systems will have to pay 0.5 percent more in their contribution rate because of the decrease in active teachers.
‘‘We are sending them (school boards) a big bill next year,’’ said state Rep. Same Jones, D-Franklin.
None of this bodes well for several of the stressed retirement systems.
The state teachers retirement system has a $10.9 billion unfunded accrued liability, the difference between accrued liabilities and the value of assets accumulated to pay for the obligation. The state employees retirement system’s UAL is $7.1 billion.
That’s not unusual. In 2010, the UAL for the Illinois Teacher Retirement System hovered near $40 billion.
A report by the National Council on Teacher Quality said many teacher pension systems across the United States are ‘‘untenable.’’
All of this should be worrisome for public employees who count on the systems to help fund their retirement years and elected officials who have a say in how those systems are funded.
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This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Bobby Dower, Ken Stickney, Jim Beam, Crystal Stevenson and Donna Price.