HomeMy WebLinkAboutTeachers' Retirement System of Louisiana - Public Financial Report2021
POPULAR ANNUAL FINANCIAL REPORT
For fi scal years ended June 30, 2021 and 2020
A component unit of the State of Louisiana
2021
POPULAR ANNUAL FINANCIAL REPORT
For fi scal years ended June 30, 2021 and 2020
A component unit of the State of Louisiana
2 Fiscal Year 2020 - 2021
Message from the Director
Dear TRSL Members and Benefi t Recipients:
It is my privilege to present the 2021 Popular Annual Financial Report (PAFR) for the Teachers’ Retirement System of Louisiana (TRSL). This report is a summary of the System’s fi nancial position and investment performance for the fi scal year ended June 30, 2021. The information in this publication represents the combined eff orts of the TRSL staff and its advisors.
At TRSL, we are committed to managing the fund’s assets with
the unwavering integrity and discipline necessary to provide
retirement benefi ts and achieve long-term, optimal results.
This past fi scal year demonstrated just how sustainable TRSL
is as a pension plan capable of providing retirement security to
Louisiana educators and their benefi ciaries for years to come.
In a year rocked by the devastating impacts of the pandemic,
TRSL emerged with a positive story to tell.
The good news begins with a record 35.7% (net of fees) in investment returns that was earned in FY 2021. This historic return generated more than $6.5 billion for the trust, bringing the System’s total assets to $27.7 billion at fi scal year’s end.
Because of the strong investment performance, the System
was able to hit even more notable milestones. The plan’s
funded status grew to 71.8%, up from 67.9% in the last fi scal
year. By achieving a funded status of at least 70%, we moved
from 30-year amortization schedules to 20-year amortization
schedules. Shorter amortization schedules are generally
considered a more prudent way to retire debt.
On the subject of debt, the unfunded accrued liability (UAL) decreased by more than $1 billion to a current balance of $9.3 billion in Fiscal Year 2021. This is the fi rst time since 2008 that the UAL has been below $10 billion. Principal and interest on the UAL have now been paid for nine consecutive years, and the debt is on track to be paid off by its statutorily required payoff dates.
At TRSL, we’re also proud of the way we’ve adapted business
practices in response to the pandemic. We opened our doors
for members to meet with us by appointment if they preferred
a face-to-face meeting. And, we’ve expanded our web-based
services to prioritize the health and safety of our members and
staff . Throughout the last year, we’ve held more virtual one-
on-one counseling sessions, informational webinars for group
retirement counseling and employer training, and added
more self-service features to our Member Access portal,
including the ability to apply for disability retirement online and
to generate an income verifi cation letter for Social Security
purposes.
Legislatively, the 2021 Regular Session resulted in three bills and one resolution that impacted TRSL. The most signifi cant of these was Act 37, which granted a minimum benefi t increase to TRSL’s oldest retirees whose monthly benefi ts were below $1,450—the federal poverty level for a family of two. Retirees who had at least 30 years of service credit and met other criteria on June 30, 2021, were granted a monthly benefi t increase equal to the lesser of $300 or the diff erence
between their current benefi t and $1,450 if they met certain
criteria. Additional information about legislation impacting the
System can be found on page 7.
Finally, as part of our goal to always look for ways to enhance
services, TRSL tackled several projects designed to improve
members’ retirement experiences.
The Louisiana Legislature asked us to work with the retirement
systems for state employees, school employees, and state
police on alternative methods for providing COLAs to retirees
in future years. We presented the joint Senate and House
Retirement committees with several alternative methods for
providing regular and reliable COLAs, and continue to work
with legislators on ways to protect the purchasing power of our
members’ retirement dollars.
We also performed a critical analysis of our member and
employer forms to determine how they could be more user
friendly. We examined the content, language and design.
Ultimately, we redesigned 90 forms to help members complete
them accurately and in their entirety.
As a state often battered by natural disasters, we’ve worked
hard to ensure our disaster recovery capabilities are solid. We
have continued work on our multi-year plan to increase the
agility of our virtual servers at our remote disaster recovery site
so that we can sustain operations in the event of a business
interruption at our TRSL offi ce.
These are just a few examples of what we’ve accomplished this
fi scal year. We’re proud of them and look forward to continuing
our practice of tapping into our initiative and innovation for the
benefi t of the System and its members.
Together with the TRSL Board of Trustees, I encourage you to
review the information in this report. The fi nancial statements
have been prepared in accordance with Generally Accepted
Accounting Principles of the United States, and have been
audited by an independent certifi ed public accounting fi rm
on behalf of the Louisiana Legislative Auditor’s Offi ce. More
detailed information can be found in the 2021 Comprehensive
Annual Financial Report, available at www.TRSL.org.
Sincerely,
Katherine Whitney
TRSL Director
For the last 19 years,
the Government Finance
Offi cers Association
of the United States
and Canada (GFOA)
has recognized TRSL
for preparation of its
summary annual report.
3Teachers’ Retirement System of Louisiana
Financial Information
TRSL ended Fiscal Year 2021 with $27.7 billion in net assets. The chart immediately below shows TRSL’s assets
and liabilities over the past three years, as well as the net assets held in trust. The second chart below details the additions to and deductions from the plan net assets for the same three-year period.
Condensed Comparative Statements of Fiduciary Net Position
2021 2020 2019
Assets
Cash and cash equivalents $ 246,399,879 $ 239,806,968 $ 196,030,213
Receivables 2,070,552,824 2,394,206,675 2,732,561,096
Investments (fair value) 27,511,511,252 21,315,227,038 21,716,552,473
Securities lending collateral 2,012,340,658 2,135,108,608 3,034,732,743
Property and equipment, at cost (net) 3,756,029 3,582,220 3,738,196
Total assets 31,844,560,642 26,087,931,509 27,683,614,721
Deferred outflows of resources 7,475,794 3,940,599 3,237,790
Liabilities
Accounts payable and other liabilities 2,112,352,860 2,731,400,959 2,996,452,942
Securities lending collateral 2,012,340,658 2,135,108,608 3,034,732,743
Total liabilities 4,124,693,518 4,866,509,567 6,031,185,685
Deferred inflows of resources 3,214,663 4,776,539 3,184,454
Net position restricted for pensions $ 27,724,128,255 $ 21,220,586,002 $ 21,652,482,372
Condensed Comparative Statements of Changes in Fiduciary Net Position
2021 2020 2019
Additions
Member contributions $ 361,684,671 $ 351,287,976 $ 341,398,896
Employer contributions 1,237,976,403 1,222,809,469 1,217,167,321
Non-employer contributions 44,886,830 43,151,074 40,850,075
LSU Co-Operative Extension* 2,075,689 2,017,909 1,995,075
Other operating revenues 19,804,296 39,770,865 26,018,466
Net investment income 7,164,169,788 171,029,364 1,209,230,839
Total additions 8,830,597,677 1,830,066,657 2,836,660,672
Deductions
Benefits, refunds, and other 2,310,595,851 2,245,134,690 2,214,961,707
LSU Co-Operative Extension* 1,856,703 1,987,638 2,075,869
Administrative expenses 14,132,424 14,418,014 13,445,962
Depreciation expense 470,446 422,685 396,927
Total deductions 2,327,055,424 2,261,963,027 2,230,880,465
Net increase (decrease) 6,503,542,253 (431,896,370) 605,780,207
Net position restricted for pensions beginning of year 21,220,586,002 21,652,482,372 21,046,702,165
Net position restricted for pensions end of year $ 27,724,128,255 $ 21,220,586,002 $ 21,652,482,372
* LSU Co-Operative Extension: Supplemental benefits administered by TRSL for members of the Louisiana State University Agriculture and
Extension Service who hold membership in the United States Civil Service Retirement System.
4 Fiscal Year 2020 - 2021
Investment Information
TRSL is responsible for prudently managing funds held in
trust for members of the state's largest public retirement
system. The goal is a highly diversifi ed portfolio that
maximizes the returns and minimizes the risk.
Investments are spread over a broad set of asset classes, including stocks, bonds, real estate, and private assets.
This diversity has helped us sustain annualized returns
over the past ten years of 10.7%.
For fi scal year ended June 30, 2021, TRSL's market rate
of return was 36.4% (gross of fees). When compared to other public plans with assets greater than $1 billion,
TRSL achieved a top 2nd percentile ranking, according to
Wilshire Trust Universe Comparison Service (TUCS).
10-Year
Rates of
Return
(gross
of fees)
Investments at Fair Value
2021 2020 2019
Short-term investments $ 1,073,305,658 $ 869,649,602 $ 905,937,551
Global debt securities 3,368,747,664 3,579,000,757 3,741,321,218
Global equities 12,274,373,322 9,140,896,138 9,850,015,432
Private assets 8,482,954,130 5,806,264,305 5,407,829,743
Real estate 2,312,130,478 1,919,416,236 1,811,448,529
Total investments $ 27,511,511,252 $ 21,315,227,038 $ 21,716,552,473
0%
5%
10%
15%
20%
25%
30%
35%
40%
2021202020192018201720162015201420132012
0.1%
13.9%
19.9%
3.1%
1.6%
16.5%
12.1%
6.6%
1.4%
36.4%
Target Asset Allocation
PrivateAssets25.5%
GlobalEquities
46.0%
Global DebtSecurities
18.5%
Real Estate
10.0%
TRSL has a
highly diversified portfolio within these broad asset classes.
PrivateAssets25.5%
GlobalEquities46.0%
Global DebtSecurities18.5%
Real Estate10.0%
5Teachers’ Retirement System of Louisiana
Actuarial Information
To fund retirements, TRSL must project how much it will take to pay benefits years in the future. To do this, the TRSL
actuary calculates the System's long-term liabilities, taking into account many assumptions of future events, including mortality and disability rates, salary increases, and termination and retirement rates. These assumptions are based
upon TRSL’s past experience and help project future funding needs.
The actuary also calculates the actuarial value of the System’s assets. Actuarial value and market value are different. Market value is based on what assets could be sold for on a specific date, which can change daily. Actuarial value is
based on a technique that “smooths” short-term market gains and losses over a five-year period. While it approximates
market value, the actuarial value removes much of the volatility global markets experience by incrementally recognizing
market highs and lows over the course of five years.
Using the actuarial value provides a reliable way to estimate the System's assets and liabilities that is not tied to day-
to-day market fluctuations and helps TRSL better meet its long-term funding needs.
As of June 30, 2021, the System’s actuarial value of assets was $23.7 billion, up from $21.9 billion in the previous
fiscal year. TRSL's actuarial funded ratio increased to 71.8% in FY 2021 from 67.9% in FY 2020. The actuarial funded
ratio of 71.8% means that TRSL has 71.8 cents to cover the present value of every dollar expected to be paid in future
retirement benefits.
Summary of Actuarial Valuation
2021 2020 2019
Membership census
Retirees 81,620 80,536 79,647
Active 85,980 86,860 85,998
DROP 2,227 2,359 2,462
Terminated vested 8,409 7,992 7,574
Actuarial investment return 12.7%6.8%7.5%
Actuarial funded ratio 71.8%67.9%67.1%
Annual benefits paid*$ 2,257,872,039 $ 2,195,861,109 $ 2,165,760,383
*Includes LSU Co-Operative Extension
0%
20%
40%
60%
80%
100%
2021202020192018201720162015201420132012
60.9%57.4%56.4%55.4%62.4%64.5%65.8%67.1%67.9%71.8%
Funded
Ratio
(2012 - 2021)
6 Fiscal Year 2020 - 2021
Revenues and Expenses
Revenues
The TRSL defined benefit retirement plan is funded by (1) contributions from members, (2) contributions from employers, and (3) investment earnings. The System invests member and employer contributions; and retirement
benefits are paid from TRSL investment earnings. The retirement system provides retirees with a lifetime monthly
benefit based on length of service, final average compensation, and a benefit accrual factor.
Some employees in higher education choose to participate in the Optional Retirement Plan (ORP), a defined
contribution plan similar to a 401(k) account. These accounts are credited with employee contributions (less a 0.05%
administrative fee) and employer contributions. The UAL portion of the employer contribution is reflected in the
Employer column of the Revenues by Source table below.
Income from miscellaneous receipts related to operation of the pension plan, such as litigation settlements and
processing fees, is listed in the table below as Other Operating Revenues.
Revenues by Source
Fiscal Year Member Employer Non-Employer*Appropriations Acts
NetInvestment Income
OtherOperating Revenues Total
2018-2019 $ 341,398,896 $ 1,217,167,321 $ 42,845,150 $ 21,327,137
‡$ 1,209,230,839 $ 4,691,329 $ 2,836,660,672
2019-2020 351,287,976 1,222,809,469 45,168,983 36,789,397
¥171,029,364 2,981,468 1,830,066,657
2020-2021 361,684,671 1,237,976,403 46,962,519 18,612,744
c 7,164,169,788 1,191,552 8,830,597,677
*Refers to the sheriff tax collections and LSU Co-Op Extension.
‡Act 50 of 2019
¥Act 255 of 2020
cAct 120 of 2021
Expenses
In Fiscal Year 2021, TRSL paid $2.3 billion in retirement
benefits. These dollars provide a reliable monthly income to
more than 81,600 retirees and beneficiaries, the majority of
whom live in Louisiana.
As shown in the pie chart to the right, 97 cents of every
dollar went toward benefit payments in Fiscal Year 2021.
Administrative expenses account for less than one penny out of that same dollar.
Expenses by Type
Fiscal Year Benefits*Pension Expense Refunds/Other AdministrativeExpenses†
DepreciationExpense Total
2018-2019 $ 2,165,855,657 $ 880,211 $ 50,301,708 $ 13,445,962 $ 396,927 $ 2,230,880,465
2019-2020 2,195,320,939 1,576,153 50,225,236 14,418,014 422,685 2,261,963,027
2020-2021 2,257,486,735 1,870,195 53,095,624 14,132,424 470,446 2,327,055,424
*Includes Other Post-Employment Benefits (OPEB) expense and LSU Co-Op Extension.
†Investment administrative expenses are excluded from this total in accordance with GASB 67.
Refunds/Other
2.3%
Administrative
and PensionExpenses 0.7%
BenefitPaymentsrepresent 97%of all TRSL expenses.
FY 2021 Expenses by Type
7Teachers’ Retirement System of Louisiana
Summary of Fiscal Year 2021 Legislation
Permanent Benefit Increase
Act 7 (Sen. Price) granted a minimum benefit increase to certain retirees, beneficiaries, and survivors of TRSL
as well as the retirement systems for state employees, school employees, and state police. A minimum benefit
increase also was granted to beneficiaries and survivors of deceased members who would have qualified.
TRSL Membership
Act 138 (Rep. LaCombe) requires all new employees of the Louisiana School Boards Association (LSBA), current
LSBA employees with at least five years of TRSL service credit, and the LSBA director to become members of
TRSL. LSBA employees have previously been members of the Parochial Employees’ Retirement System of
Louisiana (PERS).
Payment toward the UAL
Act 120 (Rep. Zeringue) makes a supplemental appropriation of $18.6 million to the TRSL initial unfunded accrued
liability (IUAL) from a portion of the FY 2019-20 surplus funds in the state treasury.
Social Security Offsets
House Concurrent Resolution No. 7 (Rep. M. Johnson) requests that Congress review and eliminate or reduce
the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Social Security benefit
reductions.
Ten Largest Employers (FY 2021)
# ofemployees
Jefferson Parish School Board 5,004
EBR Parish School Board 4,786
St. Tammany Parish School Board 4,638
Caddo Parish School Board 3,933
Calcasieu Parish School Board 3,852
Lafayette Parish School Board 3,580
Livingston Parish School Board 2,766
Rapides Parish School Board 2,713
Ascension Parish School Board 2,452
Bossier Parish School Board 2,384
40-49
29.7%
50-59
22.4%
Lessthan 30
12.8%30-39
26.1%
60-69
7.9%
70 &older
1.1%
Age
K-12 (including lab schools)
86.2%
Higher Ed
13.2%
Other
(including state agencies/unions)
0.6%
EmployerType
Female
81.1%
Male
18.9%
Gender
Membership Demographics
Quick Facts about TRSL
The printing of this document (75 copies) was paid for out of the TRSL trust fund administrative budget (at a cost of $25.50).
Katherine Whitney, Director
Physical address (use for certifi ed mail):
8401 United Plaza Boulevard, Suite 300
Baton Rouge, LA 70809-7017
Mailing address:
PO Box 94123
Baton Rouge, LA 70804-9123
Telephone: (225) 925-6446
Toll free (outside Baton Rouge area):
1-877-ASK-TRSL (1-877-275-8775)
Fax: (225) 925-4779
Email:web.master@trsl.org
Website:www.TRSL.org
Business hours: 8 a.m. - 4:30 p.m.
(Monday-Friday, excluding holidays)
Facebook:www.facebook.com/TRSLonline
Twitter:@TRSLonline
TRSL is an equal opportunity employer and complies with the Americans with Disabilities Act.
2021 Popular Annual
Financial Report
for fiscal years ended June 30, 2021 and 2020
a component unit of the State of Louisiana
020202020222211111111