PERS casts a long shadow for lawmakers

By Sid Salter
Columnist
Mississippi Lt. Gov. Delbert Hosemann recently identified the long-term financial stability of the
Mississippi’s Public Employees Retirement System as “the major issue” facing lawmakers in the
2024 regular session – and rightly so.
PERS is the public pension defined-benefit system that provides retirement benefits to some
360,000 current and former public employees in the state, including elementary and secondary
school teachers and administrators, university and community college faculty, staff and
administrators, and other state employees.
There are 150,651 active members of PERS (workers still employed). As of FY 2023, the
average PERS monthly pension benefit was $2,192 or $26,299 per year. According to the
National Institute on Retirement Security, 28% of those funds came from employer
contributions, 17% from employee contributions and 55% from investment earnings.
Reacting in great measure to the global recession in 2008-09, there were policy changes that
moved the system toward sustainability, including increased employee contributions to 9% in
2010, new employees after July 1, 2011 would receive lower benefits based on changes in the
benefit formula, and the cost of living adjustment (COLA) for new employees (post July 1,
2011) would switch from simple to compound adjustment at age 60.
Even with those adjustments, PERS has an unfunded liability of about $20.6 billion. But the
system retains almost $32 million in its investment portfolio. One of the primary issues for the
system is that there is a declining number of public employees paying into the PERS system as
opposed to those receiving benefits.
Increased longevity leaves PERS pensioners living and drawing benefits longer than when the
system was established. The PERS Board of Trustees passed a 5% employer contribution
increase over the next three years, to assist in paying down PERS liabilities, as well as to help
impact the member-to-retiree fall. The contribution rate for employers will go from 17.4% to
22.4% by 2027, and the first increase will happen on July 1, rising to 19.4%.
Cities, counties, state agencies, the state’s elementary and secondary schools, community
colleges and higher education system have converged on the Legislature seeking help with that
mandate. Hence, Hosemann and other legislative leaders rank PERS along with public healthcare
policy as the two principal issues confronting legislators in this session.
The PERS policy debate confronting government at all levels in Mississippi isn’t new. It was
during the afore-mentioned “Great Recession” that then-Gov. Haley Barbour and then-Treasurer
Tate Reeves first talked publicly about concerns over PERS in the wake of a critical study citing

unfunded liabilities, state legislators ignored discussions of reforming PERS. Barbour and
Reeves pointed out the Mississippi Legislature raised state employee retirement benefits without
providing a funding mechanism.
There was a reason legislators have historically balked over PERS discussions. Lawmakers
simply don’t want the increased scrutiny that any discussion of PERS reform will have on the
Legislature’s enhanced retirement benefits.
Since 1989, Mississippi’s 174 legislators and the lieutenant governor have enjoyed a preferential
state retirement system that is 1.5 times more lucrative than that provided “regular” state
employees like schoolteachers or highway workers. Lawmakers are eligible for two pensions that
on average can add up to 165 percent of their salaries.
The special legislative system – called the Supplemental Legislative Retirement Plan (SLRP) –
allows legislators to pay into the Public Employees’ Retirement System (PERS) at a rate 50
percent higher than for regular employees. At the same time, the state contributes to the SLRP at
a rate 50 percent higher for legislators than it does for regular state employees. “Regular” state
employees are only members of PERS while legislators are members of both PERS and SLRP.
During the 2024 session, the stakes are higher on PERS and will impact all entities that are
responsible for paying the employer portion of the PERS formula. Hosemann has estimated that
lawmakers may well be confronted with a PERS ask in the range of $360 million in a lump sum.
With that will likely come more substantive PERS reforms.
Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.

The post PERS casts a long shadow for lawmakers appeared first on The Panolian .