The cops and firefighters are beefing with Lieutenant Governor Hosemann.
Mr. Hosemann appeared on Supertalk with host Richard Cross Monday. As they rolled around in the weeds of state finance, the conversation turned to the exciting subject of PERS. Mr. Cross mentioned first responders are not happy with the new "Tier 5" retirement program for new employees.
The PERS Board instituted reforms as it created a "Tier 5" structure for employees hired after March 1, 2026 because of a funding level mired below 60%. The highlights of Tier 5 are:
* Employees will still contribute 9% of pay towards PERS. However, half will be directed towards a defined benefit plan and the other half will be deposited into a defined contribution account (Think 401k).
* Vesting in the defined benefit (pension) occurs after eight years of service while immediate vesting occurs in the defined contribution plan (401k-style)
* There is no COLA.
Translation: The new hires are in the equivalent of a 401k plan. No pension, no COLA's, no automatic increase every year.
The Lieutenant Governor said the new employees would be participating in a 401k plan. However, there was one sentence that drew the ire of first responders throughout Mississippi. Mr. Hosemann said (about first responders) "They live longer than most people do because they stay healthy."
Shrieks erupted as the police chiefs led the charge.
It's easy to understand why Mr. Hosemann said what he said because after all, first responders tend to be in better shape than the general population. It would not be surprising to learn the Lieutenant Governor thought he was being complimentary. However, the numbers tell a different story as the job takes a toll on first responders.
NIH study.
The Chiefs' Facebook post generated no less than 185 comments, most expressing outrage. Law enforcement's mouthpiece, Darkhorse Press, went on the offense as well, publishing a lopsided story that promoted the Chiefs' line while ignoring any and all financial reasons for creating Tier 5.
Well, here is what the Chiefs and their mouthpiece won't tell you. The reason why the legislature created Tier 5 was because PERS is in trouble. The funding level remains stuck in the mid-50 percent rage regardless of how well PERS investments perform. Indeed, the PERS portfolio earned a 11% return this year yet the funding level rose less than a point to 56.7%. Clearly, PERS can not invest the problem away.
The COLA cost $1 billion and increases $55 million every year. Thus when the Legislature dumps $100 million into PERS as it did this year, the COLA eats up more than half of the capitol's contribution.
Someone should point out to the Chiefs this whole brouhaha started when the actuaries told the PERS Board of Trustees it needed to raise the employer contribution rates by 5% in 2023. Such an increase meant an extra expense of $500-750,000 for cities such as Madison or Ridgeland while Jackson would pay several more million dollars. Translation: First responders probably would have been laid off or taxes would have been increased. The Legislature was faced with reforming PERS or allowing the 5% increase to take place as the ratings agencies breathe down their necks.
Of course, numbers mean little when tantrums are thrown.
13 comments:
PERS is unsustainable as current financial data points out. Thank goodness I’m an 80 year old state retiree with prospect that PERS won’t go broke before I pass on. But younger state employees won’t be that lucky.
One thing you can usually say About Delbert- Bless his heart.
Maybe Im under thinking this, but why can't the state just inject money into PERS? Like yeah tax dollars are going to help others, which I know doesn't sit well with some. But we are saving our Police, Firefighters, Teachers, and other important roles in our state. Now some of these professions going under doesn't impact me ( I have no kids so Teachers crumbling dont matter and I live in a safe rural area with little to no police already) I just hope we can figure this out.
The first responder crowd needs to be realistic about the fact that they typically move to another agency or get off the street and into administration at some point in their career . They don’t actually have to work 30 years on patrol to retire. They can and often do things like 10 years with LE and then another 20 with someone like MEMA, DPS, DHS, or a training or admin role. They are not entitled to work a specific job anymore than any other state employee.
Is this a bad time to abolish the state income tax?
Easy to forget fireman & policeman as Delbert lives behind his gated high end enclave in NE Jackson
@12:50 makes it up completely out of thin air.
The responders should be on exactly the same system as all other public workers covered by PERS.
Everyone reading this has a better chance of being the next Governor of Mississippi than Delbert.
@1:08, THEY ARE IN THE SAME SYSTEM. Only Highway Safety Patrol is a different system. Tier 5 is for all PERS members -- teachers, state employees, fire and police officers, etc. Read the comments in yesterday's PERS post.
@12:44, because it would take an ungodly amount of money. Into the hundreds of millions. But that's what happens when the 1999 Legislature passes benefit increases and retroactively applied them to people who were already retired -- they created a deficit in 1999. And rather than take action in the 26 years since, the Legislature has let the deficit get bigger and bigger to the point it is too enormous for a single appropriation to fix.
Plus, there is no political will to do what needs to be done -- people don't get elected to office in Mississippi for taking positive action to ensure benefits for public employees, they get elected by telling people how many public employees they are looking forward to firing.
Old man thought it was 2020 Covid and you could just gum flap whatever healthcare or medical related nonsense out. Thank you for correctly calling out Darkhorse as LEO propaganda.
Your returns will be better in the 401k.
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