Actuary committee adopts revised 2024 report after $148.8 million supplemental payment for State Police retirement

The Public Retirement Systems Actuary Committee on June 25 adopted a revised 2024 actuarial report for the Louisiana State Police Retirement System after accounting for a supplemental appropriation of $148,771,996 from House Bill 460 (2025 Legislature LA).

The revision, presented by Mr. Curran, applied a one-year discount to the appropriation at the plan’s assumed investment return and allocated the resulting $139,104,251 to multiple outstanding amortization bases. "This is going to result in a significant decrease in the UAL for the plan and in the payments needed by the employer on the UAL for the plan and that will drop the contribution rate," Mr. Curran said. Committee Chair Bakula then moved the report to adoption and, after a second, declared, "Seeing no objection, the report is adopted."

Why it matters: The committee’s recalculation reduces the employer contribution rate for the single-employer State Police plan from a minimum actuarially determined rate of 65.5% to 36.7% starting July 1, 2025. In addition, the state will continue to pay 2.5% annually for future cost-of-living adjustments (COLAs), bringing the total contribution including that separate COLA funding to about 39.2% beginning July 1, 2025. Committee members and staff noted the change will materially lower contribution income for fiscal 2026 and increase the plan’s reliance on investment returns to meet benefit payments.

Details of the adjustment: Mr. Curran said the firm discounted the $148,771,996.06 for one year at the plan’s assumed 6.95% investment return, producing $139,104,251 applied against multiple historical experience-loss amortization bases. The report includes a new exhibit (Schedule E under Exhibit 5) showing how the appropriation reduces many outstanding amortization balances; several older bases are set to zero while some, including the 2010 experience loss, are reduced but not fully paid off. The committee packet projects the plan’s unfunded actuarial liability (UAL) and amortization payments forward to June 30, 2025, showing a projected UAL of about $181,400,000 and projected annual amortization payments in the $13.1–13.5 million range in the projected year, down from earlier levels. The report also shows aggregate remaining balances after the adjustment at roughly $209,900,000 (as included in the revised schedules).

Cash-flow and investment implications: Mr. Curran emphasized that lowering the employer contribution rate will reduce contribution inflows and that the plan may need the investment portfolio to fund benefits in the near term. He pointed committee members to a cash-flow chart in the packet (page 11) illustrating that in the most recent valuation year contributions were substantially lower than benefit payouts and expenses. "If we drop that employer rate from 60-something percent to 30-something percent that contribution income for '25, '26 rather will show up much lower and so the plan has been made aware of that," Mr. Curran said. Committee members noted the plan’s chief investment officer, Stephen, was present and would be involved in addressing portfolio responses.

Process notes: The report treats the supplemental appropriation as a receivable recognized as of June 30, 2024 for purposes of reamortizing the affected bases; Mr. Curran described this as a departure from the typical valuation process and documented the approach in a new "special comments" section and related notes (including a note about yields on page 15). The committee approved replacing the prior 2024 report with this revised version so the plan’s historical record would reflect the appropriation and resulting amortization changes.

Fiscal effect estimate: During the meeting, Committee members referenced a session estimate that the state could save about $25 million per year on employer payments as a result of the appropriation and reamortization; Mr. Curran said he had worked with legislative staff on that estimate and that the figure "sounds familiar," though he did not present a formal, fully detailed calculation during the meeting.

Action and next steps: Mr. Curran moved to adopt the revised 2024 actuarial report; an unnamed member seconded the motion, and Chair Bakula announced adoption with no recorded objections. The committee did not vote by roll call. The committee and staff indicated they will treat the revised report as the official 2024 valuation going forward and will incorporate the appropriation into the fiscal 2026 beginning balances and future investment-return calculations.

Discussion vs. decision: The record shows substantive discussion (method of discounting the appropriation, schedules affected, projected cash-flow impacts, and documentation of the departure from normal valuation practice) and a formal decision to adopt the revised report. The committee noted implementation risks limited to investment performance and timing of receipt of the appropriation; Mr. Curran said the report assumed receipt near June 30, 2025.

No further business was recorded; the committee adjourned after adopting the report.