Posts Tagged ‘MS PERS’

When the PERS Board voted to increase taxpayer funding by raising the “employer contribution rate” five percentage points at a cost of $265 million, most attention was given to state-supported entities (think: agencies, K-12 public schools, community colleges, and public universities). Yet the total funding required by this rate hike is $345 million, with some $80 million in new financial obligations placed squarely on the shoulders of Mississippi’s cities and counties.  Unless something changes, the new rate (and higher costs) become effective July 1, 2024.

As lawmakers evaluate the state retirement plan, it is important to understand historical context, the origins of PERS, and its current benefit structure.  The lawmakers who developed the system anticipated that members – those who benefit from the plan – would cover most plan liabilities, not taxpayers.

The Mississippi Public Employees’ Retirement System (PERS) faces significant financial and structural challenges – and Mississippians deserve to know more about this complex issue.  After all, changes to the system directly affect our citizens’ pocketbooks.

Thirty five years after it was closed, MRS still covers 1,510 retirees in 19 cities.

For decades, the COLA automatically increased as the U.S. dealt with historically low inflation. The solution for the Board of Trustees is simple: Tie PERS’ COLA to the rate of inflation as measured by the CPI.

The board of trustees for the state’s Public Employees’ Retirement System (PERS) made an important, if unheralded, move recently when it voted unanimously to use a somewhat more realistic projection of its rate of return on investments. This matters because an overly optimistic projection can mask a coming decrease in the solvency of the fund, which is already severely under-capitalized.

Mississippi’s defined benefit pension system had a banner year for its investments in fiscal 2021 and the financial breathing room could be a springboard for real reform that ensures its long-term viability.

The Mississippi Joint Legislative Committee on Performance Evaluation and Expenditure Review issues an annual report on the state’s defined benefit pension system. Normally, the PEER report tends to be moderate in its analysis of PERS, but this one released on May 11 admits that demographics, lower than expected wage inflation by contributing members and lower than expected investment returns are combining to scuttle the plan’s bottom line.

The time for can-kicking is past when it comes to fixing Mississippi’s defined benefit pension system. The Public Employees’ Retirement System of Mississippi could soon ask taxpayers to increase their contribution to the pensions of state and local employees for the second time in two years. 

Mississippi’s defined benefit pension fund was hit hard by the economic downturn caused by the COVID-19 pandemic. The Public Employees’ Retirement System of Mississippi released its annual comprehensive annual financial report on December 15, 2020 for fiscal 2020, which ended June 30 and the plan continues to take on water.