Louisiana State Employees’ Retirement System Pension Solvency Analysis
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Policy Study

Louisiana State Employees’ Retirement System Pension Solvency Analysis

The Louisiana State Employees' Retirement System has only 64 percent of the assets needed to fully fund the pension system.

Louisiana State Employees’ Retirement System (LASERS) Pension Solvency Analysis

The Louisiana State Employees’ Retirement System (LASERS) has seen a significant increase in public pension debt in the last two decades. With $7.1 billion in unfunded liabilities, the retirement security of Lousiana’s state workers and retirees may be in jeopardy.

Reason Foundation’s latest analysis, updated this month (November 2020), shows that deviations from investment return assumptions have been the largest contributor to the system’s unfunded liability growth, adding $2.7 billion to its unfunded liability since 2000. This growth in unfunded liabilities has driven benefit costs higher while crowding out other programs and priorities that may be clamoring for public funding in Louisiana.

The chart below, from the full solvency analysis, shows the increase in the Louisiana State Employees’ Retirement System debt since 2001:

Today, LASERS has only 64 percent of the assets needed to fully fund the pension system in the long-term. This underfunding not only puts taxpayers on the hook for growing debt but also jeopardizes the retirement security of Louisiana’s state employees. Left unaddressed, the Louisiana State Employees’ Retirement System’s structural problems will continue to resources from other state priorities.

The solvency analysis looks at the primary factors driving unfunded liabilities in LASERS’ over the past few decades and offers stress-testing designed to highlight potentially latent financial risks the pension system is facing. Reason Foundation also provides a number of policy suggestions that, if implemented, would address the declining solvency of the public pension plan. A new, updated analysis will be added to this page regularly to track the system’s performance and solvency.

Bringing stakeholders together around a central, non-partisan understanding of the challenges the Teacher Retirement System of Louisiana and the Louisiana State Employees’ Retirement System face—complete with independent third-party actuarial analysis and expert technical assistance—the Pension Integrity Project at Reason Foundation stands ready to help guide Louisiana policymakers and stakeholders in addressing the shifting fiscal landscape.

Louisiana State Employees’ Retirement System (LASRS) Pension Solvency Analysis