Lawmakers hear retirement systems' 2027 budgets, discuss UAL, COLA and surplus allocation

Executives from four state retirement systems described operating budgets and recent investment performance to the Joint Legislative Committee on the Budget on Feb. 19, 2026, and answered lawmakers’ questions about use of surplus dollars and the timeline to eliminate unfunded actuarial liability (UAL).

Trey Boudreaux, presenting for LASERS, said LASERS requested a 1.10% ($634,000) increase to cover salary and related benefits and highlighted strong investment results: "We had 12.4% return last year," he said, and reported LASERS held roughly $17.2 billion in assets, an increase of about $1 billion from the prior year. Boudreaux told the committee the system’s projected surplus for the year is about $50,000,000 and said paying off LASERS’ UAL would require roughly $87,000,000.

A Teachers' Retirement System presenter (Whitney) described the operating budget as increasing roughly 1.12%, mostly for personnel and inflation‑driven costs, and noted the system recently eclipsed an 80% funded ratio after earlier reforms. The School Employees' Retirement System (presented by Shen Faizao) requested a $9,500,000 operating budget for FY2027, a 7.76% decrease driven largely by a $945,000 drop in investment management fees and ongoing staffing at 26 full‑time positions.

Doug Hanley, CIO for the State Police Retirement System, reported that the system’s funded ratio has risen from the mid‑70s to about 89% (and likely higher based on recent returns), describing the improvement as a major benefit to the system’s long‑term posture.

Lawmakers pressed presenters on how surplus allocations and UAL paydowns would translate into benefits for retirees and state savings. Speaker Duvalier and others noted the legislature has used surplus dollars to reduce UAL and asked how future available funds should be targeted. Boudreaux said the projected surplus could support a COLA but that statutory and procedural steps remain: he told members that a 2% COLA would require a "2 and a 2 thirds vote" in the legislature to fund it, and that existing mechanisms are intended to fund COLA payments as the UAL declines.

Representative Marceau and others asked technical questions about membership and hypothetical scenarios (for example, whether legislators had been part of LASERS in prior years). Whitney and other presenters traced reforms dating to 2009 and before and said the combination of contributions and reform measures has steadily improved funded ratios while reducing employer contribution pressures.

After discussion the committee approved the retirement systems' proposed operating budgets in globo. The committee recorded no roll‑call vote in the transcript, approving the items by voice during the meeting; Senator Price made the motion to approve in globo and the motion carried with no objection.

The committee’s action will permit systems to proceed with the FY2026‑27 administrative plans presented; presenters noted follow‑up items (for example, how surplus receipts would be allocated and the timing of any COLA proposals) that will require continued legislative and system‑board collaboration.