The health of the teachers’ retirement system in Louisiana got a C minus in a report issued Tuesday by a national group.
National Council on Teacher Quality, which calls itself a nonpartisan research and policy organization in Washington, D.C., did the review. The report says the state’s teacher retirement debt totals $11.3 billion, or $16,134 per public school student.
The latest estimate from state officials is nearly $12 billion, which is the largest of the four statewide retirement systems. About 156,000 active and retired members are in the system.
Louisiana’s teacher pension system was criticized in two of three key topics.
The report said the retirement debt is not well funded and stable.
It also said the system lacks portability by not offering teachers a defined contribution plan similar to 401(k)s instead of the current one used that guarantees certain benefits.
The review said the state should require no more than three years of service for teachers to be vested. The requirement in Louisiana is five years.
The group also said that 82 percent of each dollar that a teacher spends on retirement goes toward trimming the debt, not his or her future benefits.
The review was issued just weeks after the state’s top school board opted not to launch a $143,000 study on the teacher retirement debt.
The state Board of Elementary and Secondary Education initially approved the check amid concerns on how much retirement costs are draining state education aid.
But BESE reversed course the next day after a behind-the-scenes plea from House Retirement Committee Chairman Kevin Pearson, R-Slidell.
Pearson said in an interview earlier this month that other studies have been done on retirement costs and that the one considered by BESE would be a waste of money.
Asked about the report on Tuesday, Pearson said he and other lawmakers “have been working our butts off ... to get this system on a better track, slowing the locomotive down.
“Yes, the systems are underfunded to a level that we don’t like,” he said. “But Louisiana has stood tough and said that unfunded liability will be paid off by 2029. That is only 14 years from now.”
A spokeswoman for Maureen Westgard, executive director of the Teachers’ Retirement System of Louisiana, said Westgard was unavailable on Tuesday.
Westgard said in a prepared statement that, despite what the report says, defined benefit retirement plans like those used here “provide the financial security teachers say they want, especially in Louisiana where teachers are prohibited from participating in Social Security.”
The C minus given to Louisiana is the national average.
Nationally speaking, teacher retirement costs are a growing problem that gets little attention, the report stated.
“It is not news that there is a teacher pension crisis in the United States,” according to the study. “It should be news that little is being done about it.”
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