Jackson Jambalaya

While I can see the fact the economy is in the dump and returns are expected to drop, I do not understand why the PERS management cannot adjust and throw up the signal, "Hey, we are drowning, and it doesn't look rosy, even IF the economy recovers." Can we get some help to solve this? Apparently, it took HB to finally tell them, "if you won't do it, I will."

PERS, currently, is a recipe for disaster. Bureaucrats who have been cozy in positions for years as the economy has allowed them to publish "Everything is OK" with oversight from other bureaucrats who say the same.

Wonder when they are going to say, in unison, "Hey we better raise taxes on the taxpayers to keep PERS solvent."

Notice previously, they floated the "We are going to increase employee contributions" and that went over like a brick balloon.

IMO the rolling IRR data Kingfish has posted is the key takeaway for discussion and damns the decision makers who have been stupidly clinging to the 8% assumed RR for at least a minimum of one decade too long.

For perspective here is a 50-year chart for the S&P 500.

It is also important to note when reviewing the yearly performance data that the ups and downs in growth are not straight calculations. In order words $1000 invested in PERS Jan 1 2009 lost (19.4%) of its value in 2009 AND was still down (9.2%) on Dec 31 2010 despite the overall performance bump of +14.6%.

If you are a CURRENT public employee contribution to PERS you are a fool if you don't DEMAND that it get fixed right here, right now. If you don't shout loud and clear for accountability then you have no one to blame but yourselves as you continue to throw money into this shit performing system.

Burchfield also gave away the dirty little secret. Government employees HAVE to participate in the program. State. County. City. They have no choice. Personally I have no problem with defined benefit programs as some do BUT if you are going to have them, then run them right and that means being up-front about everything.

If PERS was a selling point to prospective employees -- which is a vastly overstated piece of propaganda -- then it can only be presented that one gains more in retirement than one contributes during employment.

The PERS participants will never tell the truth.

Of all the teachers I know hired, I've yet to hear one mention PERS as a reason for employment.

One thing I noticed in all the comments made at the hearing, few of those opposing the commission mentioned any numbers. One lady cherry picked the returns. She picked the best 15 year period and went off of that. Brenda Scott focused on the $21 billion in assets. Not one..... not one, discussed the half a billion dollars more in payouts than contributions made in 2010. Mr. Valentine was long on accusations and short on actual facts as well.

What tools you commenters are if you actually think 'taxpayers' are coughing up heavy cash to prop up PERS. So, now it's a 'secret' that participation in the system is mandatory if you work in jobs covered by the system? What a revelation! In bad economic times, every program becomes a PONZI scheme, only difference is the employee can't opt out of the scheme. Get over it.

No one has said taxpayers are coughing up heavy cash to prop up PERS although lets be real honest here, the taxpayers pay for every dime put into PERS either through employee salaries or contributions appropriated by the legislature.

I've had more than one government employee contact me raising hell over the fact no one mentions how they are forced to join the system and how much they resent it so take it up with your fellow members.

The problem with you is when we mention PERS is only funded at a 64% level, there are few on the board with any investment expertise, and we are paying out $400 million more than we take in a year, you want us to ignore all that and just let the markets recover. Well you know what, Tate tried that argument with Cecil and Johnny at the MPACT hearings and they didn't think much of it. But because this time its the retirees and government employees in the line of fire and not evil Republicans, its a different story.

64% funded is almost unrecoverable. 80% isn't a benchmark for funding, it is a minimum. 100% funding should be the goal. It is going to take substantial contributions and/or investment earnings in excess of benefit payouts to overcome that kind of deficit.

The main problem I see is the unrealistic 8% rate of return. While the 30 year return does indeed exceed that, the 20 year does not and the 10 year is woefully short. One thing to keep in mind regarding the 30 year return is that you are starting at a historically low point in history (July 1, 1980). The economy had been stagnant through most of the 1970's, and even though returns for the decade averaged almost 6% annually, real rates of return sucked because inflation was out of control and averaged almost 10% annually. A stock investor would have actually lost 40% in real purchasing power over the 1970's. We were overdue for a positive correction.

I do think we will eventually get back into the 8% - 10% rates of return, but not for five or ten more years and even then it won't be forever. The cash flow issues are going to catch up to them, and by the time returns do improve they won't have the investable assets to make the income necessary to cover their benefit shortfalls.

The PERS commission has its work cut out for them. I don't envy their jobs one bit. The first thing they need to do is adjust their expected returns over time and assume no more than a 4% return over the next five years. The Fed has already pledged to keep their interest rate at around 0.25% for the next two years. A 3.75% return above that is still what I would consider agressive. If they don't have the funds necessary to invest it won't matter what the return rate is in 10 years.

One telling point in the actuarial report is that the unfunded liability increased from $10 Billion to $11.25 billion from 2009 to 2010. That is a 10.25% increase in one year despite having earned 14% on their assets. Their funded status dropped from 67% to 64% during that same time. That kind of negative change is unsustainable.

One final point to my rambling. While I didn't watch to all of the hearing video, I didn't hear any of the PERS supporters actually coming up with ideas where the benefit money is going to come from. They all wanted to keep the system the same, but the staus quo is burning through net assets like there is no tomorrow. How are the future retirees supposed to live when there is no money left to pay benefits? I don't care how many promises the politicians made, unless the money is there they will get nothing.

Full disclosure, I have a vested interst in PERS. I'm 42 with 8 years of service but no longer work with a public agency. My wife is 39 with 15 years of service and is a currently employed teacher. We would like to receive benefits at some point, but with at least 20 more years before we will be able to retire I am beginning to wonder if the benefits will be there at all.

Kingfish; Please allow me to correct you on one point with your lambasting me as uninformed and having a meaningless opinion. Your claim that 'every dime' put into the system is contributed by Mississippi taxpayers.

That is simply not true. Many of these agency position, and at least one or two entire agencies, are federally funded and not in any way paid for by Mississippi taxpayers.

This time you popped off at the mouth without facts. Imagine that.

gee Shadow, who do you think pays for federal funds?

Taxpayers.

Seems like you're the one popping off with no facts.

You've been caught with your britches down on this one. You know damned well you were implying that Mississippi taxpayers are on the hook for the system. And that's simply not true in the cases I just illustrated for you. Actually, at the risk of correcting you once again, citizen taxpayers don't fund the federally financed jobs either. Employers do, through FUTA taxes. Please open yourself up to facts that you haven't necessarily discovered on your own. Although rare, they sometimes do exist.

OK, I'm a public employee with a recommendation for change -- roll back the benefits increase that happened in the late 1990's. None of that needed to happen, it was a boondoggle for legislators and agency heads who were close to retirement.

The COLA at that time was 3% simple, not compounded, and people were fine with it. I would be interested in looking at the relative percentage of benefits paid out in COLAs prior to the changes in the 90's, and afterward.

You might have to exempt people who retired between the time of the increases and now -- it's one thing to make a change to a "promised" benefit, totally another thing to change an active benefit. The lawsuits that would produce would last for years.

Finally, I am TOTALLY fine with Board membership changing to include investment professionals, though I think they should remain non-voting. And something ought to be done about how we vote for our reps on the Board. Seems like the same old guys all the time, and I know that in many agencies, employees are INSTRUCTED who to vote for.

The only reason I pay attention to PERS is because my dad had trouble with his application a while back and I had to help him, and I learned more that I ever knew. I pay attention now. I don't know why no one does a better job educating public employees about PERS, the HR people usually just tell you the money has to come out of your check, pat you on the head, and send you on your way.

I'm sensing a theme here.

I think the new GOP theme now is " every man for himself". If you don't see the wisdom in retirement plans or health insurance as a young person, then it's your fault. Go beg on the street at 70 or die because you don't have a pension or investment fund and aren't covered for health insurance so you can't afford a life saving procedure. So what, too, if you have children who are sick and you didn't get covered. Let them die while you try to raise money in the community.

Society apparently should have no interest in keeping beggars and the dying off the streets. After all, it's part of the charm of Third World countries.

The richest Nation in the world should totally be about accumulating personal wealth and to hell with everything else. Besides, isn't THAT what being a Christian is all about...just helping the few we decide through our churches are deserving as our churches can't help everyone and are busy reaching out to those in the Third World as they are surely more ignorant? That Sermon on the Mount should be ignored in favor of the Old Testament wisdom. The " Christ" part of Christian doesn't mean we have to place more importance on His Word, or does it?!

9:14

I don't remember anything from Sunday School that said our Christian charity should be extended to taking care of the irresponsible or lazy.

However, God does take care of drunks and fools, so you should be covered.

I work my ass off. I can't afford health insurance. If I get moderately (not even seriously) ill, I will have to file bankruptcy. We are headed for the rich, the working poor, and the dirt poor. The middle class is the golden goose that both democrats and republicans seem content to eat, and supporting these people as a way of ingratiating yourself will not protect you.

I work my ass off too, but not for your benefit. If you can't afford health insurance examine your personal expenditures. I have a feeling that EVERYONE has some room to cut expenses to pay for something if it rises to the level of what they feel is important. Cell phones, tv service, X-box games and Domino's are not entitlements.

I would love to go get something for nothing, but I have this nagging medical condition called personal responsibility. And the sad thing is it's genetic, I'm afraid I'm passing it on to my kids, who I guess will wind up supporting yours.

Bravo, 11:41, bravo.

11:26 and 11:41, get over yourselves. This is a real issue that impacts a lot of people for better and worse. And it deserves thoughtful discussion. Please take the "rich people are mean to me" and "poor people get what they deserve" crap to another board. I know they have room at the C-L.

Please tell me where in the 11:41 post you read "poor people get what they deserve"? It merely states that someone who has the ability to cut back and afford something should do it if it is important to them. This includes red&yellow, black&white, rich&poor, left&right. Spending your money is descretionary on your part. Spending mine is not.

That goes for someone living in a $30K home driving a $60K vehicle, or someone living in a $400K home driving a $10K vehicle. CHOICES

How does any of the last ten posts apply to the PERS dilemma, if one exists?

'Do'.........

SFax; I notice some of your posts have been left up. Congrats.

The reason why some of SF's posts are not appearing is because they have turned into a series of comments complaining about how I'm not being fair to SF, how I can't handle any criticism from SF, and just plain whining about the treatment of SF's comments. When SF makes a good comment, the comment goes up and we all know SF is capable of making good comments. No one would mistake him for Alvin Edney.

However, this all got started when SF started accusing me of posting under different screen names. Which was not true. Then SF accused me of not approving comments. Problem is said comments were never submitted. So SF is already on thin ice for making false accusations. As SF now repeatedly whines about being treated unfairly, I will say I don't have to put up with it and won't. SF makes good comments, the comments will be posted. SF used up his mulligans on stupid posts. Its my board and I make the rules. I allow more stuff on this site than do other sites in this state. however, I'm not going to let it turn into the CL forums either. That, my friends, is the bottom line.

Does anyone but me think it's strange that PERS is included in the committee's review, but not the Highway Patrol's retirement system? PERS is a 25 year retirement (30 years as of next year!); MHP's retirement is 20 years. Has anyone considered the burden of the HP retirement on the system? The legislature for some reason won't touch this sacred cow.