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PERS parochial plans exceed 100% funded; minimum employer rates rise modestly
Summary
The committee accepted actuarial valuations for Parochial PERS Plan A and Plan B showing Plan A at 102.36% funded and recommended minimum employer rates of 7.5% for Plan A and 5.75% for Plan B; the board continues to collect above the minimum to build the funding deposit account.
The Public Retirement Actuary Committee on Aug. 19 accepted the 2024 actuarial valuations for the Parochial employees' plans (PERS Plan A and Plan B), recognizing a minimum recommended employer rate of 7.5% for Plan A and 5.75% for Plan B. The committee adopted the report by motion without recorded objection.
Plan A data presented by the systems actuary show 14,162 members, 8,638 retirees, and active payroll of $782,000,000 (up from $731,000,000 the prior year). The plan’s accrued liability was presented at about $5,000,000,000 and the actual (smoothed) assets were also above $5,000,000,000, yielding a funded ratio of 102.36% on a smoothed basis. The funding deposit account decreased from $102,000,000 to $95,700,000, reflecting a recent COLA payment. The market return for the more recent calendar period cited was 11.7% (prior year 13.8%), and the smoothed return was 6.8%, above Plan A’s assumed return of 6.4%.
For Plan B, the accrued liability was reported at $464,000,000 versus actual assets of $480,000,000 (above 100% funded), and the funding deposit account was $8,500,000, down from $9,000,000. The committee heard that the employer contribution result for fiscal 2026 is a minimum of 7.5% for Plan A and 5.75% for Plan B, and that many employers have been paying amounts above the minimum (the board has previously collected 7% and until recently 7.5%), using the margin to build the funding deposit account for future COLAs.
Why it matters: the recommended minimum employer rates affect municipal and parish payroll costs and the use of insurance premium and ad valorem tax allocations; the funding deposit account has funded several recent COLAs (2017, 2020, 2022, 2024). Presenters noted structural factors that have increased Plan A membership in recent years, including a 2020 legislative change that moved some Lafayette hires into Plan A.
Review and replication: Mr. Herbold said PERSAC performed a replication valuation for the parochial plans but did not replicate active liabilities for this valuation and added a qualifying statement; he nonetheless reported no significant deficiencies and said the parts reviewed conform to actuarial standards of practice. Greg Curran also walked through the drivers of cost changes, noting payroll growth, investment gains and the placement of new hires into cheaper benefit tiers as factors reducing average plan cost.
Formal action: Mr. Curran moved to accept the Parochial Plan A and Plan B valuations as presented and to recognize the minimum recommended employer rates (7.5% for Plan A, 5.75% for Plan B) and that both plans receive the maximum amount of ad valorem and revenue-sharing taxes allocated to the plan; Ms. Matthews seconded. The motion was adopted with no objection.
Notes: The committee emphasized transparency by showing the COLA cost in the valuation schedules even when the funding deposit account offsets the immediate contribution effect. Presenters said the recommended spread of the remaining merger or other amortizations would follow the original time frames unless the board directs otherwise.
