In Baton Rouge, which was spared from the brunt of the Category 4 hurricane, the state police fund didn't avoid problems connected with the storm. Its investment consultant, Prime Consulting Group, was displaced to Houston, and staff of Orleans Capital went first to Houston and later to Mandeville, La.
Still, said Irwin Felps, executive director, "The governor (Kathleen Blanco) declared Monday, Tuesday and Wednesday (Aug. 29-31) as holidays. From Thursday on, it was business as usual — checks went out on time. We were very fortunate."
As of Sept. 15, phones were still out at the $200 million New Orleans Firemen's Retirement System and the $199 million New Orleans Sewerage & Water Board Employees Pension Fund.
Kelli Chandler, administrator and controller for the $850 million Louisiana Firefighters' Retirement System, Baton Rouge, said the plan had minimal service disruptions.
Plan providers are also stepping up efforts to help sponsors in the region.
T. Rowe Price is "doing the transactions" for clients in the area, including the two plans located in the area around the Superdome, said Deborah Novotny, vice president. She wouldn't name them.
Steve Zients, senior vice president at T. Rowe Price, said the firm extended its phone hours and increased staff to address the anticipated extra volume. He also expects requests for loans and hardship withdrawals to increase, as more than half of the firm's plan sponsor clients have participants in the affected areas.
Meanwhile, the U.S. House and Senate on Sept. 15 passed versions of a Katrina-related tax-relief package with identical provisions, permitting Gulf Coast residents to make penalty-free early withdrawals from defined benefit and defined contribution plans as well as public-sector deferred compensation plans.
The legislation also permits those who suffered hurricane-related losses in Louisiana, Mississippi and Alabama to borrow their entire retirement account balances, up to $100,000, from their employer-sponsored plans. Those who already borrowed from their retirement plans would be eligible for a year's extension on the repayment.
The Society of Professional Administrators and Record Keepers, Simsbury, Conn.; the American Society of Pension Professionals & Actuaries, Washington; and T. Rowe Price had lobbied Congress and the IRS to waive the 10% penalty on hardship withdrawals, double loan limits, relax loan rules and reduce loan documentation. They got what they wanted.