If you thought that the idiocy that surrounded the horrific investment decisions made by Louisiana’s Municipal Police Employees Retirement System was bad, check out perhaps a worse case that argues more illustratively for system reform at all levels.

MPERS, which municipalities may participate in to have managed retirement investments to pay out in pensions for their law enforcement employees, gained infamy for its investments in questionable real estate and golf courses. A neglectful board trusted its administrator on these matters, who later was convicted of fraud, whose flights of fancy caused significant dollar losses to its portfolio, meaning higher costs to law enforcement agencies and, ultimately, to taxpayers.

But MPERS almost seems conservative on this account compared to the absurdities committed by the board and management of the New Orleans Fire Fighter and Pension Relief Fund. Among other “investments” made by this group, the agency that deals with the pensions of these public safety personnel in New Orleans, were buying golf courses and lending to a hotel, an office building, a garage, and to movie production companies. NOFF also went further in investing with an advisor who promised indefinite outsized returns now under investigation for what authorities equate to running a Ponzi scheme.

In the statutes that established NOFF and the other 20 known extant local pension funds – the state has four “state” and nine “statewide” systems most of which may invest for local government employees, but are not tied to one geographical area – they dictate that prudence must encompass financial decision-making. How anybody could think the items above represented anything but high risk seems incredible, especially in the case of NOFF as while MPERS had a $1.8 billion portfolio much more able to absorb losses in the tens of millions of dollars that those items accrued, NOFF’s portfolio was less than a tenth of that size while these risky investments made up a considerably larger portion of the whole. In fact, the amount it put into real estate alone over the last few years about equals the most recent entire value of the fund.

Typically, these systems have a board whose membership approves of such deals, comprised of a mix of government representatives and those elected from participating members. Having inexpert plan members on these entails risk, but government representatives presumably are there for their expertise and can curb any unwise enthusiasm of the others. This appears not to have happened in NOFF’s case, which in part explains why courts have ruled that New Orleans is on the hook to make up for shortfalls in pension payments, meaning of course its taxpayers, and led to its suing NOFF to avoid these.

This space has noted previously that consolidation of state and statewide funds like MPERS could reduce the probability of bad decision-making and bad investments causing major taxpayer headaches. The same should apply to the 21 local pension systems, although in many cases that has happened by default. For example, the Monroe Police Pension Fund essentially over time has gone out of existence, leaving the city with a few hundred thousand dollars in reserve, and the Ouachita Parish’s Firemen’s Protection District No. 1 Pension Relief Fund (that is, concerning Ouachita Parish’s Fire Department) has become subsumed into Ouachita Parish government that does not report separately on it.

However, if lawmakers make no effort to disband the obsolete or to merge the relevant systems into statewide systems already existing, the least that can be done is to increase the transparency of these. Few, like NOFF, report their own numbers, and even if the numbers aren’t large for most of these, it’s still the people’s and active and inactive members’ money that they should know of, and more sunshine might lead to more prudent investing.

Unless measures like these get into law, simply stated more examples like MPERS and NOFF will rear their ugly heads from time to time, and more waste of citizens’ and members’ money will occur. It’s time to stop this madness.