The Retirement Program (“ORP” and “TRSL”) Controversy

During the summer of 2009, when faculty were engaged in summer teaching and research projects, the Teachers’ Retirement System of Louisiana (TRSL) quietly but dramatically cut the rate at which employer contributions to defined-contribution retirement programs passed through to employee (faculty) retirement accounts. The reduction, from 6.95% to 5.76%, was the largest in the history of the ORP (a reduction of 18% ), which had already established a long-term trend toward declining benefits. Since the discovery of the retirement program problem, the rate of divergence—the simultaneous increase in employer contributions and decrease in employee receipts—has continued to worsen, with the 2012–2013 fiscal and academic years setting new but unhappy records in this area. TRSL has attempted to explain this reduction with respect to certain actuarial assumptions but continues to use the monies taken from ORP participants to resolve the unfunded liability of the defined-benefit plan, from which ORP participants receive no benefits. Meanwhile, the defined-benefit plan teeters on insolvency, with retirees in that program having no prospect of cost-of-living adjustments.