Board of Regents task force kicks off study of phased retirement, asks for fiscal modeling

The Board of Regents convened its legislatively created task force to study phased retirement and possible changes to retirement contributions for higher education employees, hearing a policy primer and asking TRSL staff and actuaries for fiscal modeling ahead of a Dec. 31 report to the House Committee on Retirement.

Elizabeth Emily Smith, deputy commissioner for finance and administration for the Board of Regents, opened the meeting and framed the group’s charge: "The purpose of the resolution is to establish this task force," she said, noting the panel will revisit two items left off last year’s legislation and review recommendations carried forward in House Bill 24 and House Resolution 169.

The task force’s immediate work centers on phased retirement — programs that typically allow eligible faculty or staff to reduce workload over a one- to five-year period while receiving a portion of retirement benefits and continuing health insurance — and on questions about employer contributions for Optional Retirement Plan (ORP) members. "We are looking at phased retirement within Louisiana’s post secondary education institutions," Smith said, explaining eligibility, typical durations and the contractual nature of such arrangements.

Members repeatedly raised the fiscal implications of any contribution change. Smith told the group she believed the employer-side increase previously discussed would cost "about 10,000,000, an additional 10 to 13,000,000 a year," and financial officers in the room stressed the need for actuarial scenarios to understand system-level impacts. Kenny Herbold, identified as a legislative actuarial adviser, and TRSL staff were asked to help produce modeling and fiscal estimates.

Trey Roche of the Teachers' Retirement System (TRSL) described the ORP administrative fee and how those dollars are used, saying the fee funds reconciliation, program staffing, consultants and bank and legal costs tied to administering ORP participants. Roche noted that some portion of the administrative fee will move to employer payment beginning in fiscal year 2027.

Members debated structure and process for the short-term work. Some urged keeping the entire group together for discussion, saying the prior task force found broad participation saved time and widened perspectives; others asked whether subgroups (finance, HR) could handle particular items. Smith said the group could add meetings or make targeted requests for additional data but expressed caution about dividing the task force prematurely because retirement and fiscal issues overlap.

At the meeting, Smith nominated Dr. Mark McLean to chair the task force; members voiced assent and the nomination was seconded by the group during the session. The host said she would share the slide deck, minutes and earlier task force materials, and asked members to submit questions and topic suggestions ahead of the next meeting. Loyola was invited to present its program structure at the next meeting as an example.

Members asked for specific data points for planning and modeling, including the number of employees currently eligible or nearing retirement, the fiscal tradeoffs of hiring replacements at higher market salaries, and how phased retirement would interact with health vesting, leave payout and contribution rules. The group also discussed whether phased retirement should be open to staff as well as faculty; the host said the legislation does not explicitly exclude staff and recommended gathering data for all employee categories to inform recommendations.

The panel set follow-up tasks for TRSL and system fiscal officers to develop actuarial scenarios and for HR representatives to compile eligibility and workforce data. The report with recommendations is due to the House Committee on Retirement by Dec. 31; the meeting adjourned after those assignments were made.

Next steps: TRSL/actuary fiscal scenarios and system workforce data to be prepared for the next meeting; Loyola to be invited to present its phased-retirement structure.