Jackson Jambalaya

A 2010 PERS report on Jackson's Municipal Retirement Account states it has an unfunded liability of $60 million. Municipalities maintained their own pension plans for police and firemen prior to the creation of PERS. PERS Executive Director Pat Robertson said PERS took over the management of these defined-benefit plans in 1987 since most plans were severely, as well as chronically, underfunded. Although 17 cities still maintain these accounts, PERS is not responsible for any shortfalls in the accounts. Any unfunded liabilities must be covered by the municipality, as they are funded by the municipality, not PERS. The municipal retirement accounts were closed to new employees in 1976. Employees hired after 1976 enroll in the state retirement system.

Jackson Jambalaya obtained through public records requests ,the actuarial reports for 2010, 2004, and 1997. The 2010 report states Jackson has an unfunded liability of $60,430,225. The unfunded liability grew from $54,029,943 in 2009. The plan has 665 active retirees, assets of $70,753,803, a liability of $131,195,121, and is 54% funded.

Jackson paid $13,195,121 in benefits and a monthly benefit of $2,543. A member is paid 50% of his average compensation and an additional 1.7% of average compensation for each year of service over twenty years (the maximum level is 66%.).

Jackson faced a similar problem in the mid 1990s. Jackson's plan was below a funding level of 50% from 1991 (38%) to 1996 (46%). The unfunded actuarial liability was $73,861,000 in 1996 and after reaching $80,568,000 in 1994. Jackson issued $50 million in retirement bonds (actually $49.8 million) that were paid off in 2009. The interest cost was $23 million of the bonds. The average interest rate paid on the bonds was 6.3% (not a weighted average) and the average annual principal payment was $4.1 million. The proceeds gained from the sale of the bonds paid the unfunded liability down to $15.8 million in 1997 and improved the funding level to 88%. The plan had a surplus of $6.2 million in 2002 and was funded at 104%. Unfortunately, the funding level has declined since 2004:

1998: 90%
1999: 98%
2000: 102%
2001: 104%
2002: 94%
2003: 88%
2004: 83%
2005: 76%
2006: 73%
2007: 72%
2008: 70%
2009: 59%
2010: 54%

Jackson dedicates 5.75 mills (slightly over $1 million per mill) to funding the plan. The funds generated by the property taxes were used to retire the bonds. Thus Jackson only contributed $280,482, 7.9% of the PERS-required contribution of $3,563,516. However, Jackson paid more than the required amount in 2010: $5,735,113 while PERS required $5,005,779 - a payment of 114%. Jackson is scheduled to end contributions in 2020 as it projects the system to be fully funded as it winds down to zero beneficiaries.

Some facts from the reports:

1997
Assets: $120.4 million
Liabilities: $137.5 million
Unfunded liability: $17.1 million
Average monthly benefit: $2,034

2004
Assets: $119.7 million
Liabilities: $144.6 million
Unfunded liability: $24.8 million
Average monthly benefit: $2,543

2009
Assets: $79.1 million
Liabilities: $133.2 million
Unfunded liability: $54.0 million

2010
Assets: $70.8 million
Liabilities: $131.2 million
Unfunded liability: $60.4 million

Note: Efforts to contact representatives from the city of Jackson as well as the council were not successful.

2010 PERS report on Municipal Retirement Accounts
2010 PERS report on Jackson's Municipal Retirement Account
2009 PERS report on Municipal Retirement Accounts
2004 PERS report on Municipal Retirement Accounts
1997 PERS report on Jackson's Municipal Retirement Accounts
1997 Jackson Special Obligation Bonds