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

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

3. 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
2.9% reduction from FY rate of 30.2%
DROP Rate – 11.13%
Pre-2004 DROP
FY investments experienced positive gain of 3.15% based on investable assets

4. 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

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

6. 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.

7. 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.

8. 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 (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

9. 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

10. 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 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

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