LSASPA Louisiana State Association of School Personnel Administrators Fall Conference – October 2, 2015 Carolyn Forbes Assistant Director

Topics Valuation Key Points 2015 Legislative Session Privatization Changes and New Initiatives Questions

Valuation Key Points NOTE: LSERS valuation data for FYE 2015 will be presented to LSERS Board of Trustees on October 5, 2015 for adoption ER Contribution Rate – 27.3% for FY 2016-17 2.9% reduction from FY 2015-16 rate of 30.2% DROP Rate – 11.13% Pre-2004 DROP FY 2014-15 investments experienced positive gain of 3.15% based on investable assets

2015 Legislative Session HCR 130 – Requests LSERS and the La. School Board Association to jointly develop and implement an appeals process for audits of privatized positions Agreed-upon process will be presented to the LSERS Board for adoption on Monday, October 5

Privatization Annual Reporting Requirement Notification via website and monthly eNews Need annual report: St. James REMINDER – contact LSERS if your school system is considering privatizing any position held by a member of LSERS

What is privatization? When the employer places a contract worker in a position previously held by an LSERS member Privatization occurs when an LSERS-eligible position is vacated due to retirement, resignation, death, reduction in force, abolishment of position, etc. AND the vacated position is replaced by a contract worker through outsourcing, privatizing, contracting the service with a private employer, or any other means.

What is NOT privatization? When the employer eliminates or abolishes a position by downsizing through normal business means, such as reduction in force through attrition from retirement, death or resignation AND the service previously provided by the LSERS-eligible position is not taken over by a contract worker. BUT, If, in the future, the employer contracts out the services from a previously eliminated position, privatization then occurs.

History of Privatization Large employer privatized over 400 positions Unfunded Accrued Liability (UAL) associated with 400 positions Reduced annual payroll ~ Less payment coming in to cover UAL All employers pay for privatized positions instead of only the employer who privatized Act 563 of 2006 (R.S. 11:1195.1) Effective June 23, 2006 “Group of employees” Act 823 of 2008 (R.S. 11:1195.2) Effective July 1, 2008 “Any position” La. Supreme Court in 2014 Upheld trial court’s decision ruling that LSERS privatization statutes do not conflict with the provisions of the La. Constitution

Privatization Cost Examples Fact Sheet 22 - Privatization Positions privatized on 10/1/2014 UAL paid on 10/1/2014--no interest due (7.25%) Cost increases in increments of about $14,700 for every $5,000 of additional salary Annual Salary UAL Due $20,000 $58,804 $25,000 $73,505 $30,000 $88,206 $35,000 $102,906 $40,000 $117,607

Changes and New Initiatives New Form 10C, Application for Retirement after DROP released March 2015 Only used when ready to retire Employer verification no longer required Added W-4P to form New hires with 1st state service on/after July 1, 2015 Age 62 to retire or enter DROP 20 yrs @ any age still available with actuarially reduced lifetime benefit LSERSWeb Enhancements effective July 1, 2015 Retiree Return-to-Work Enrollments now online Form 15 replaced with online salary report for retirees working under earnings limit

Questions www.lsers.net 225.925.6484 Toll-free 1.800.256.3718 Valuation Key Points 2015 Legislative Session Privatization Changes and New Initiatives www.lsers.net 225.925.6484 Toll-free 1.800.256.3718 cforbes@lsers.net