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Jack Donahue for Senate Newsletter 10-1-07 UAL PDF Print E-mail
Wednesday, October 03 2007 - 7:20 am

Dear Friends,


In Louisiana, one of our most unrecognized problems is that our state retirement systems are in trouble. We have a growing unfunded accrued liability (UAL) that needs to be addressed.



The current plan calls for the UAL to be paid off by the year 2029, but the payment schedule is back-loaded and with increasing benefits and investment losses, the viability of our retirement systems is in serious jeopardy.

Our current UAL has nearly doubled in the last eight years to almost $11 billion and will grow in the years to come. According to Louisiana State Treasurer John Kennedy, the per capita UAL is $2,385, 72% higher than the average per capita UAL among the rest of the states in the nation.

In fact, it will grow until at least 2015 because payments on the initial UAL will not even cover interest on the debt until that time. By 2029, the schedule calls for a payment of $2.2 billion to cover the UAL, which is projected to be about 20% of the entire discretionary budget of the State of Louisiana.

Therefore, each year, the problem is getting worse as we are not adequately funding our retirement systems on a yearly basis. So, it is not a surprise that our funding ratio (assets divided by accrued liabilities) is fifth worst in the nation. For example, a recent calculation projected our funding ratio at an abysmal 62.4%.

As your next State Senator, I will take action to solve this problem. Here are some common sense solutions to this dilemma:

  • Set aside a significant portion of any future surplus dollars to reduce the UAL.
  • Establish a mandate requiring the State of Louisiana to spend all surplus funds on vital priorities, such as reducing the UAL, infrastructure improvements and coastal restoration
  • Increase current yearly contributions to reduce the UAL to stem the growing yearly deficit and reduce the need for huge payments on the backend of the schedule

In a budget that has quadrupled to $32 billion in less than 15 years and with a surplus last year of $3 billion, it is very disappointing that our Governor and legislators have been unable to reduce the UAL of our retirement systems.

The current plan to postpone significant payments until the end of the schedule in 2029 is not fiscally responsible. It is time for action, not rhetoric, to deal with this problem today instead of hoping it will go away in the future. In fact, unless action is taken now, the UAL will only get worse and our children will have to inherit this mess.

In our post-Katrina economy, Louisiana has the funds to reduce the UAL and deal effectively with this growing problem. In the Louisiana State Senate, I will provide the leadership to make this important fiscal issue a real priority in the legislature.

Throughout the campaign for State Senate, I will continue to provide you my observations and suggestions on significant issues facing the state. It is time for leadership in Baton Rouge, and I stand ready to lead as the next State Senator for District 11.

The election will be held on Saturday, October 20. Early voting is available from October 6 through October 13. Please join me in this campaign to not only become your next State Senator, but to also begin the long process of turning around the great State of Louisiana.

I encourage you to contact me with your thoughts, ideas, and suggestions. I can be reached at (985) 612-1034 or via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .


Sincerely yours,



Jack Donahue
Candidate for LA State Senate, District 11