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listen to this articlePhoto Caption: Washington Parish Fire District 7’s Clayton Byrd Station is located in Bogalusa, Louisiana. Photo courtesy of Facebook/Washington Parish Fire District 7.
The Louisiana Firefighters Retirement System recovered in 2023 after suffering significant losses in 2022, largely due to market changes, according to a recent audit.
audit report A report released by the Louisiana Legislative Auditor in December provides an update on the Firefighter Retirement System for fiscal years 2022 and 2023, showing that while investments in the system performed well in 2023, It shows that total pension liability increased by approximately $141 million.
Overall, the plan’s net position restricted for pension purposes increased by $193.3 million, or approximately 9.3%, between 2022 and 2023, after a decrease of $247.4 million in the prior year. The total amount restricted for pensions fell to $2.1 billion in 2022, before returning to $2.3 billion in 2023 in 2021.
The return on system investment was 9.5% in 2023, significantly higher than -11.1% in 2022, but significantly lower than 25.9% in 2021. This transition generated a net investment gain of $253.9 million for him in 2023. In both years, the plan’s Board of Trustees set the expected rate of return at 6.9%.
“Fiscal year 2023 earnings were driven by strong stock market performance,” the auditors wrote. “Losses in fiscal year 2022 are due to weaker stock market and fixed income performance.”
Contributions to the plan in 2023 increased by $4.3 million, or about 3.1%, compared to 2022 “due to salary increases for active members and an increase in the number of active members by 49,” the report said.
The increase in 2023 follows a 5% increase in 2022 due to a 1.5% increase in employer contribution rates and salary increases for full members, partially offset by a decrease of 56 full members.
The net increase in benefits and disability benefits increased by $1.3 million, or approximately 1%, in 2023. This is after taking into account the addition of 75 retirees, which increased the payout by $6.4 million, and the withdrawal of the Deferred Retirement Option Plan from 2022, which decreased him by $5.1 million.
These payments increased by $8.0 million, or approximately 6.5%, in 2022 compared to the prior year due to an increase of 91 retirees and an increase in deferred retirement option plan withdrawals of $1.8 million.
The auditors noted that the one-time lump sum supplemental benefit to eligible retirees approved in the last Congress would cost the system $5.9 million in total.
Total pension liability in 2023 was $2.9 billion, and considering the plan’s net fiduciary position of approximately $2.3 billion, the employer’s net liability was approximately $653 million. Based on actuarial assumptions and estimates, the funding rate in 2023 would be approximately 78%, up from 75% in 2022.
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