With a projected surplus of more than $800 million in the state’s budget, Louisiana has an opportunity to increase the financial soundness of our state retirement systems while at the same time saving the taxpayers hundreds of millions of dollars.
There will be many competing demands for these funds. Yet, addressing the retirement system liability gives our state its best return on the dollar.
For decades the Louisiana State Employees’ Retirement System (LASERS) and the Teachers’ Retirement System of Louisiana (TRSL) were not properly funded. This practice resulted in a debt that now reaches $10 billion.
The state must pay off the lion’s share of the retirement debt by the year 2029. The debt accrues interest at 8.25 percent annually. The combined annual payment for 2018, ten years from now, will be over $1 billion.
TRSL and LASERS appreciate a recent move by legislative leaders to support the effort to pay down the retirement systems’ debt and hope that view will be shared by other members who’ve shown a dedication to getting the state’s fiscal house in order.
Using even $100 million of the state surplus now would save hundreds of millions of dollars in future interest payments. Those savings can be used to meet so many pressing needs in our state.
Recent reports indicate that this window of opportunity is closing. Louisiana may not see another such surplus.
It is important to also keep in mind that nearly 90 percent of our LASERS and TRSL retirees live in Louisiana. The benefits that are paid to our retirees are an important economic benefit for every community.
Saving our taxpayers hundreds of millions of dollars while at the same time, increasing the financial soundness of our retirement systems just makes good sense.
Maureen H. Westgard,
LASERS Executive Director