US - New legislation will give the Teachers Retirement System of Louisiana (TRSL) a one time appropriation of US$26.4m to accelerate payoff of the initial unfunded accrued liability (UAL).
The new law Act 642 of the Supplemental Appropriations Bill was sponsored by representative John Alario and passed in the 2006 regular session of the Louisiana legislature.
In last year’s legislature the TRSL was said to have nearly US$7bn in unfunded accrued liabilities. At one point in the 2005 legislature the appropriations bill contained a provision to apply available funds to decrease the TRSL’s UAL.
“A payment of $18m would have reduced interest payments on the UAL by approximately $100m,” the TRSL had said.
Unfortunately, both chambers chose to delete that provision and to disperse the funds for other projects, leaving the retirement systems under pressure.
The $26.4m payment will see the retirement system being given the money it is owed.
“The UAL is not a retirement system debt; it is a state liability that is owed to the retirement system trust to pay for the contractually promised retirement benefits of state employees and teachers,” the TRSL said.
In addition, two resolutions passed in the 2006 legislature will also affect the TRSL.
Representative Billy Montgomery asked for the Louisiana house committee on retirement to, “study the actuarial soundness, liabilities, and benefits of the Deferred Retirement Option Plans of the state retirement systems and to report its findings to the legislature prior to the convening of the 2007 regular session.”
A resolution sponsored by Mike Walsworth will see committee on appropriations studying the methods of funding the UAL of the state retirement systems.
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