lsaspa louisiana state association of school personnel administrators fall conference – october 2,...
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LSASPALouisiana State Association of
School Personnel Administrators
Fall Conference – October 2, 2015
Carolyn ForbesAssistant Director
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Topics
Valuation Key Points
2015 Legislative Session
Privatization
Changes and New Initiatives
Questions
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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
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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
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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?6
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?7
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 Privatization8
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 Examples9
Fact Sheet 22 - PrivatizationPositions privatized on 10/1/2014UAL paid on 10/1/2014--no interest due (7.25%)Cost increases in increments of about $14,700 for every
$5,000 of additional salaryAnnual Salary UAL Due
$20,000 $58,804
$25,000 $73,505
$30,000 $88,206
$35,000 $102,906
$40,000 $117,607
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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
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Questions
Valuation Key Points2015 Legislative SessionPrivatizationChanges and New Initiatives
www.lsers.net
225.925.6484
Toll-free 1.800.256.3718