Category Archives: PERS

Crawford: Ho hum, PERS costs jump again


Ho hum … 14.26 percent is now the public employer “contribution” rate to the Mississippi retirement system (PERS). Cities, counties, schools, colleges and universities along with state agencies are required to contribute this percentage of payroll to support PERS.

Yawn … the rate went up July 1 from 12.93 percent last year. That was up from 12 percent the year before, which was up from 11.85 percent, which increased from 11.30 percent, which rose from 10.75 percent, which jumped up from the steady rate of 9.75 percent in place from 1990 to 2005.

La de da … these required contribution increases, authorized by the Legislature, allow PERS, in effect, to pass its deficits on to taxpayers.

Oh well … a PERS newsletter to public employers says they should “be aware that the actuary has projected the need for an additional increase next year.”

via Ho hum, PERS costs jump again | The Greenville News | GreenvilleOnline.com.

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Lawmakers additional retirement payout and its future


Once a lawmaker is vested in state government, they get perks like no other state employee. With a base pay about $10,000, their retirement packages go far beyond that.

Through the Supplemental Legislative Retirement Plan, known as SLRP, legislators are the only public employees who get an additional 50% more in retirement simply because they are legislators.

“For legislators to add 50% on to that for themselves, most people see as very wrong,” said Mississippi Center for Public Policy President, Forest Thigpen.

Thigpen says the payout is often a hot button issue since it’s calculated on a lawmakers highest four salary years while in office and includes per diem payments.

“The result is that it’s not uncommon for 40, 50, $60,000 to be the base on which their retirement is calculated,” said Thigpen.

It was established by lawmakers back in 1989 and ever since then the plan hasn’t changed much. Currently there’s a total of 381 active members enrolled in SLRP, including current lawmakers as well as those already retired and their beneficiaries.

For fiscal year 2011, SLRP paid out $823,936 in benefits to 147 members or beneficiaries currently receiving them.  As a whole, the Public Employees Retirement System, known as PERS, paid out more than $1.6 billion to more than 83,000 people.

via Lawmakers additional retirement payout and its future – WLBT 3 – Jackson, MS:.

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PERS STUDY COMMISSION RELEASES RECOMMENDATIONS FOR STRENGTHENING PENSION FUND


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The Public Employees’ Retirement System (PERS) Study Commission released its report today recommending several investment, management and policy changes to protect the long-term solvency of the state’s public pension fund. The report also includes a legal analysis of benefit modifications.

“Mississippi has a retirement plan that is underfunded by more than $12 billion – a figure that has only worsened over the past decade despite hikes in taxpayer and employee contributions,” said Gov. Haley Barbour, who created the commission in August to study Mississippi’s state retirement system and recommend reforms to strengthen the plan. “In 2001, PERS had a funded status of 88 percent of assets needed to fund its liabilities; today, that level has dropped to 62 percent, far below the level recognized for such plans. Taxpayers are putting in about 50 percent more than they once were, but the system continues to fall farther behind. We must reverse this trend to protect our retirees and taxpayers future.”

“The PERS Study Commission has presented reasonable recommendations, and I appreciate their hard work,” he said. “Neither I nor the Commission can implement any changes. It is up to the next administration and the Legislature to reform the system and ensure PERS remains solvent.”

The PERS Study Commission reviewed nearly all facets of the state’s retirement program.

Here are selected highlights; more recommendations are included in the full report.

  • The PERS Board should reconsider lowering its investment return assumption from 8 percent to 7.5 percent as recommended by PERS’ own actuary, Cavanaugh MacDonald. Over the last ten years, PERS has achieved a 5.41 percent investment return. Many states are lowering their investment return assumptions to more accurately reflect market conditions.
  • The Legislature and/or PERS Board should continue studying the issue of adding a defined contribution component in the state’s overall retirement program. There is no recommendation that PERS be converted to a defined contribution plan.
  • The Legislature should consider revising the make-up of the PERS Board to include more financial subject matter experts and include non-participant taxpayer members.
  • While the ultimate determination of the legality of any changes to PERS will rest with the state judicial system, the legal subcommittee believes the following modification tiers are allowable: new hires are subject to any new standards of retirement; current employees are subject to changes for future accruals but no changes to benefits already earned for previous service; and retirees are only subject to changes in future accruals of the COLA.

RETIREMENT AGE AND TIERS FOR DRAWING BENEFITS

The Legislature should provide that 62 is the normal retirement age with the following tiers for drawing retirement:

  • Eligible to draw full retirement at age 62 if vested;
  • Eligible to draw full retirement at age 55 with 30 years or more of service, but with no cost-of-living adjustment until age 62; or
  • Eligible to draw an actuarially reduced benefit before age 55, after completing 30 years of service.

Implementing these changes (effective for current members’ future service and all new hires) would

  • Decrease the employer contribution rate by 1.61 percent
  • Increase the plan’s funded status to 64 percent
  • Produce a cost-savings of $92.8 million

COST-OF-LIVING ADJUSTMENT

The COLA is one of the costliest benefit provisions in the PERS plan, accounting for an estimated 25 percent of the plan’s payout during a single year. The current COLA is 3 percent simple until age 55; the COLA is compounded after age 55.

A statutorily fixed cost-of-living adjustment does not provide a mechanism for ensuring COLA payments track inflation.

  • For example, PERS beneficiaries received at least a 9 percent (or higher) COLA from 2008-2011. During this same time period, inflation rose half that amount (4.54 percent) based on the latest Consumer Price Index (CPI) data available.
  • Additional study by the actuarial consulting firm GRS found that PERS pays out approximately $10 million more in COLA benefits each year than it would if the COLA program were indexed to the CPI. This means that some members are, on average, receiving more in COLA than they actually lost through inflation.

The Study Commission did not recommend elimination of the COLA or any changes to the current option to take the COLA as a lump sum payment.

The Commission recommends freezing the COLA for three years and thereafter tying the COLA to the CPI with a cap of 3 percent. (For retirees, COLA payments would continue but just not increase for three years. For individuals not yet retired, no COLA would be received for three years after retirement.)

Implementing these changes for future accruals of current members and retirees, as well as all new hires, would result in:

  • Reduction in contributions by 2.12 percent
  • Estimated funded status of 67 percent
  • Reduction in first year employer contributions of $122.2 million

Other recommendations include lowering the vesting period from eight to four years and continued study of SLRP (since the Legislature must address the question of whether it’s appropriate to have an additional benefit for members of the Legislature and the Lieutenant Governor).

The commission is comprised of current and former public employees, businesses leaders and individuals with expertise in pension issues. Other members include: Will Flatt of Parkway Properties; former Supreme Court Justice Reuben Anderson; Harry Walker of Trustmark Bank; Seale Pylate of Phelps Dunbar; Bill Crawford, former legislator and current President of the Montgomery Institute; Bill Benson, Lee County Chancery Clerk and current chairman of the PERS Board of Trustees; and Kevin Upchurch, Department of Finance and Administration Director. Legislators who are non-voting members of the commission include: Sen. Hob Bryan, Sen. Dean Kirby, Rep. Preston Sullivan and Rep. Greg Snowden.

Press Release: Gov. Haley Barbour

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#MSPERSCommissionReport today: Join the discussion on Twitter today


 

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Twitter / Search – #MSPersCommissionReport – All Tweets.

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Bank of America to pay $315 million to investors in Mississippi PERS to settle securities misrepresentation case


Bank of America (BAC: 5.75 -0.69%) agreed to pay $315 million to investors of a Mississippi pension fund to settle allegations the bank misrepresented securities tied to subprime mortgages.

The parties disclosed the settlement in filings with the U.S. District Court for the Southern District on New York in Manhattan late Monday. The Public Employees’ Retirement System of Mississippi led the class-action lawsuit against Merrill Lynch, which Bank of America acquired in 2008.

The Charlotte, N.C.-based banking giant wasn’t immediately available to comment on the settlement. A response to an email seeking comment from the executive director of  PERS of Mississippi wasn’t immediately returned.

via BofA to pay $315 million to settle MBS case « HousingWire.

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Lawmakers support PERS | mspers.org


A group of local lawmakers dispelled fears regarding the future of PERS Wednesday at a University of Southern Mississippi legislative forum.

“There’s not anybody in the House or Senate that I know of that’s stupid enough to mess with PERS,” said Sen. Billy Hudson, R-Purvis.

In agreement were Sen. Joey Fillingane, R-Sumrall, and Rep. Toby Barker, R-Hattiesburg, who said that the recession may force some tweaks to the state retirement system, which depends heavily on shrinking investment returns.

“There is no reason to jump off any high buildings at this point. I think things are well in hand,” assured Fillingane. “There probably will need to be some adjustments going forward. … The prudent way of handling that is to change it for people who have not yet entered the system and haven’t been guaranteed anything.”

The trio of lawmakers were joined by Rep. Larry Byrd, R-Petal; Rep.-elect Doug McLeod, R-Lucedale; and Sen.-elect John Polk, R-Hattiesburg.

They fielded questions from Southern Miss students, professors and staff members about the upcoming legislative season.

Southern Miss employee and Staff Council member Valerie Craig, who questioned lawmakers about PERS, said the answer she received was a relief.

“I do feel a lot better now,” she said. “I thought it would be a really bad, bad move on the part of any politician to change a contract once it’s put into place.”

But while the lawmakers quashed doubts about the future of PERS, they did say that there was plenty of uncertainty stemming from the upcoming budget, expressing doubt about increased education funding.

“I think this session is going to be the toughest of the five since I’ve been there, now that the stimulus is all gone and most of the savings are all gone,” said Hudson, referring to federal stimulus dollars and $200 million rainy day fund.

via Hattiesburg American: Lawmakers support PERS | mspers.org.

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Crawford: Will RINO hunts come to Miss.?


When the victory laps slow down and folks take off their rose-colored glasses, they’re going to see a number of RINOs making up the Republican majorities in both the Mississippi House and Senate.

How many?

We’ll be able to tell pretty soon. State budget realities are bleak, meaning legislators must find more revenue or cut spending. Not-RINO, real Republicans would choose spending cuts and try to deliver on promises for smaller government.

They’ve got a problem though. Many boxed themselves in with other promises during recent campaigns.

The biggest single budget item in state government is education. Most candidates, Republicans and Democrats alike, pledged to support education. And education, from K-12 schools to community colleges to universities, is clamoring for more spending. So cuts, like freezing teachers’ STEP increases for a year or consolidating K-12, community college, and university back-room administrative services, seem off the table.

The biggest overall costs in state government come from salaries and benefits, whether paid directly by the state or by universities, colleges, or schools using state money. Again, Republicans and Democrats alike pledged not to touch retirement benefits for existing employees and retirees. This was promised in the face of escalating retirement benefit costs being shifted to taxpayers. Taxpayer-covered contributions have risen from 9.75 percent to 12.93 percent of employees’ salaries and are projected to surpass 14 percent next year. And that’s the conservative projection.

via Will RINO hunts come to Miss.? | Hattiesburg American | hattiesburgamerican.com.

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PERS report won’t be issued by today’s deadline


The committee studying changes to the Mississippi Public Employees’ Retirement System won’t be able to complete its recommendations by today’s deadline.

In August, Gov. Haley Barbour appointed a committee of business leaders, legislators and government officials to study the system’s investments, management and other financial information. Gulfport Mayor George Schloegel heads the commission, which is also looking at which portions of PERS is funded with tax dollars and which comes from the funds workers contribute from their own paychecks into their retirements. Barbour also tasked the commission with studying whether it would be legal to change benefits for both current and future state employees.

When it was set up, the commission was tasked with completing its work by Nov. 15 and to report its findings to the governor and the Legislature. Barbour said Friday he was told the complicated nature of the group’s work requires it to work past the deadline.

via PERS report won’t be ready by today’s deadline – Legislature – SunHerald.com.

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Interactive Poll: What are your policy predictions for the Mississippi Legislature in 2012?


What are your policy predictions? Feel free to leave a comment below.

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Filed under Democrats, Economic Development, Education, Elections, Ethics, Federal Government, Legislature, Mississippi, Mississippi State House, Mississippi State Senate, PERS, Politics, Redistricting, Republican, Retirement, SLRP, Spending, State Bonds, State Government, Tate Reeves, Taxes

Video statement from Senator Michael Watson: “REPUBLICAN SENATORS UNDERSTAND THE 13TH CHECK IS IMPORTANT AND WE WILL PROTECT IT.”


November 4, 2011– MSPERS.ORG today released a video statement by Republican State Senator Michael Watson regarding the Mississippi Public Employee Retirement System(PERS). Since the naming of a PERS Study Commission by Governor Haley Barbour, many Democrat‘s running for office have attempted to scare public employees into thinking that Republicans were planning to cut retirement benefits, and eliminate the annual cost of living adjustment, often referred to as the “13th check.”
A group of current Republican State Senators launched MSPERS.ORG to help clear up the misinformation, and assure state employees that their retirement benefits represent a contract that will be honored.
mspers.org Press Release.

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