Thursday, February 18, 2021

State Auditor: PERS Faces Rocky Road

 State Auditor Shad White issued the following statement

The Public Employees’ Retirement System of Mississippi (PERS) operates well in some areas when compared to pensions in other states but could be improved in other areas according to a report released today by State Auditor Shad White. The study was conducted for the Office of the State Auditor for no charge by the Pew Charitable Trusts, an internationally-respected non-partisan public policy research organization.

Key findings listed in the report include:

·         As of 2018, Mississippi ranked 39th among all states when it comes to the “funded ratio” of our pension. The funded ratio is the pension’s assets over its liabilities.

·         Mississippi ranks 42nd among states when it comes to the ratio of our operating cash flow to our assets. Unfortunately, that ratio has deteriorated over the last twenty years.

·         PERS’ investments have underperformed the S&P 500 since 2010. The performance of PERS’ investments during that time has been in the top quartile of states, though.

·         Over the next twenty years, if the state increases the employer contributions as a percentage of state revenue to around 12%, the financial stability of PERS will improve over time.

“In late 2018, I requested this study to determine how Mississippi’s pension plan is doing compared to other states,” said Auditor White.My hope is that this overview will provide policymakers and PERS leadership with information that can help them make decisions in the future. I also hope that it provides state employees, pensioners, and taxpayers with transparency into how PERS is performing.”

 

The full report can be found online at the Auditor’s website.

 

52 comments:

Anonymous said...

Ponzi schemes fail. It's what they do.

Anonymous said...

Who are the people making the investment decisions, and how much is being paid in fees to some well connected brokers and firms? The state employees need to know what is going on in this “good ole boy” investment for their future. There seems to be very little oversight, as the beneficiaries know the state will maneuver a scheme to get the already over taxed citizens to “bail out the plan”.

Anonymous said...

Better plan: take the 10% you steal from workers checks every month and put it in a money market account or 401k and earn double or even triple what the state gets. Not that hard.

Anonymous said...

Just an observation, but if you've underperformed the S&P 500 every year since 2010, it might be time to take a look at the individuals responsible for the portfolio mix. A third grader could deduce that incompetence abounds there. I'll bet those money managers pay wasn't tied to returns produced. Definition of insanity personified, right here.

Anonymous said...

All the studies in the world cannot convince the legislature (both parties) to exercise the courage to tackle this problem. They will treat it like all other large complex government problems - ignore it until it becomes a disaster and then try to find someone else to blame for their own lack of initiative.

Anonymous said...

Where Mississippi's PERS ranks compared to other states and how it performs compared to the S&P 500 is technically completely irrelevant. One would think an auditor would know that.

Whether its performance is sufficient to meet its obligations is what is relevant, no matter what anyone else is doing. We could be dead last and still in outstanding condition, or we could be in first place and in complete abysmal failure. Let's go for outstanding. Let's compare to relevant indicators.

Anonymous said...

Hey retirees, the barber will see you now.

Anonymous said...

Is there anything really new in this study? The problem is huge and only getting bigger. Okay, forget eliminating the personal income tax. That doesn't fix anything related to PERS and the state's taxing capacity is already nearly tapped out. Welcome to your Hobson's Choice. Fund PERS or fund education or empty the damn prisons but you don't have enough untapped tax dollars available for confiscation to fix all of the problems.

Anonymous said...

11:20 nailed it, but I refer you to 11:00.

Anonymous said...

@11:20- it’s a binding contract. You taxpayers will pay up one way or another. Meanwhile, I am 57 and enjoying my retirement.

Anonymous said...

Well its not getting bigger. Its huge, but its not getting bigger. Its just not getting smaller either.

Anonymous said...

"Ponzi schemes fail. It's what they do. February 18, 2021 at 10:44 AM"

Defined benefit plans are not ponzi schemes, dumb ass. We've covered this many times. Please either take notes or copy someone's else's.

Haircut guy is back with his head firmly up his ass.

Note to class: Please review both posts at 11:00 a.m.

Anonymous said...

It's the Mississippi equivalent of Texas's power grid problems. The political price of preventing failure ahead isn't deemed worth the cost until it happens.

Anonymous said...

11:28 - especially true when you dare not mention the possibility of the government increasing taxes to pay for all three.

Anonymous said...

See who is managing the money and what they are charging. Their are so many fingers in that pie that investment returns would have to be astronomical to offset the fees. Fire all the managers. Re-invest in retirement year oriented ETFs that match the ages of participants and move on.

Anonymous said...

@11:20: It is actually your time with the barber, not the retirees’ time. Retirees have a vested property interest in their PERS account. It would be a violation of the Constitution to take it away. I know you support the Constitution even when it is not convenient.

Anonymous said...

Will the last person to leave the room......

Anonymous said...

Good thing the state passed all those business (friend/political donor) tax cuts a few years back. Much better they keep it than fixing roads/bridges with it or giving teachers a living wage.

Anonymous said...

eh. just do away with it. real mississippians don’t need a big government handout.

Anonymous said...

Once again, Shad White punted. Yes, he apparently did an "audit" so he can say he did one - but of course refrained from any real criticism or concern that would sound any alarms about mismanagement or malfeasance. He rapidly replaced corrupt Stacy Pickering sooner than was expected, so he can politically survive on MS tax-dollars. Such a disappointment.

All three of the 11:00am posts are about as well stated as could be.

Anonymous said...

This can will be kicked as far as possible down the road until draconian cuts to benefits are needed or other government services get eliminated. Also, a little discussed finanical reckoning that will be coming sooner is the MPACT plan and funding the remaining contracts..

Anonymous said...

10:47 - your 'concern' over those poor state employees that 'need to know' is misplaced.

The problem with PERS is that those very state employees are the ones that elect the Board of PERS, who make the decisions over who is hired, what firm advises, etc. And the folks those poor state employees ELECT generally have no idea, no training, no educational background to put them in that position. The Board of PERS is possibly managing the largest investment in the state, and the members are totally out of their league in this responsibility. Largely their 'qualification' for this position is nothing more than they worked for an agency with a large number of state employees, and their name was known due to their working in that agency for several years.

If those poor state employees were concerned about their retirement, they would agree to let the system get reorganized, put a quality board of trustees in place, and start bringing the system into the real world.

But no, they don't give a damn as long as the system stays sound enough to continue their 13th check (can't touch that COLA that the legislature bought votes with 20 years ago) for the rest of their life. And since it isn't doing it now, they want us taxpayers to pony up again another 3% (this year, more to come next year) of state contribution, while not touching the employee contribution.

Anonymous said...

This can be fixed without hurting current retirees or raising taxes, but the legislature doesn't have the guts to take it on.

Anonymous said...

Calendar year 2020 total return on investment portfolio, which included bonds, cash, real estate, and foreign equities, was about 15%. Not bad.

Anonymous said...

@3:13pm Perfect description of every hick agency in Mississippi....a bunch of nobodies, except to kin and friends. You could replace "PERS" with any other function in Mississippi.

"The problem with _______ is that those very state employees are the ones that elect the Board of ________, who make the decisions over who is hired, what firm advises, etc. And the folks those poor state employees ELECT generally have no idea, no training, no educational background to put them in that position. The Board of _______ is possibly managing the largest investment in the state, and the members are totally out of their league in this responsibility. Largely their 'qualification' for this position is nothing more than they worked for an agency with a large number of state employees, and their name was known due to their working in that agency for several years." Yep, their qualifications were: "He seems nice."

Round and round it goes, until it doesn't.

@3:46pm
True, but the ship is foundering.....59% funded and plummeting? The rigging is collapsed, and with no officers alive on deck.

Anonymous said...

Shoulda put the whole thing in Bitcoin back in 2010.

Anonymous said...

Raymond James could fix it. P

Anonymous said...

@5:31 PM
There wasn’t enough crypto currency in 2010 to convert that much paper fiat currency. The reason crypto has any value is that it is finite and mobile. It can’t ever be counterfeited

Anonymous said...

WHO MANAGES THE DAMN INVESTMENTS. We can not seem to get an answer?

Anonymous said...

@7:38 go to the PERS website and do some digging yourself. It's all there.

Retired In Rankin said...

3:13 - You obviously don't know much about the Retirement System Board. Only a few are voted on by employees and retirees. Those few represent retirees and employees. The rest make investment decisions...you know, the ones appointed by the governor and lieutenant governor and the state treasurer who serves on the Board. Most are appointed. Get yourself some learnin'. Or don't.

Anonymous said...

@7:38pm The culture of silence is what makes Mississippi what it is.

Anonymous said...

Next up, Chad says the capitol city has potholes.

Anonymous said...

10:44 AM said: “Ponzi schemes fail. It's what they do.”

Very well said!

Eventually tax payers will pay for the fat cat government employee retirements, including their 13th checks that reportedly can, by themselves, end up being more than than salaries the government employees earned while going to work 5 days a week.

While the rest of us get 1/2% returns on savings accounts due to fake interest rates DICTATED by the Fed in this so-called free market society.

Don’t blame the government employees though as it is not their fault.

Why not go back and identify the greedy shits that created this mess (gonna be some Republicans that while running for election said “I’m really a Democrat but have to run as a Republican to win, wink, wink” in that group.

We are living in a heads the bureaucrats and bankers win, tails the tax payer keeps getting F’ed country.

Anonymous said...

11:55 is correct, but only up to a point.

PERS is a contractual obligation of the State, but if the system is in imminent danger of failing (admittedly not there yet) the State can jettison it. Don’t think that the government has to pay PERS regardless if the system crashes; it doesn’t.

Also, the 3% COLA (13th check) is not part of what employees earned, but rather an adjustment meant to preserve the value of what was earned. It is not a contractual obligation of the State, even though a reasonable COLA (not an artificially high one) is the right thing to do. The COLA can be altered without breaking any contract.

Beer Drinkers In The Bleachers said...

7:58 - You're right up to a point. An employee handbook (and the PERS handbook serves that purpose) is a contract. The state can re-write the PERS handbook regulations and that would have to be done in order to act in a manner that violates the current handbook. So, in effect the state could do that, yes, but they have the unilateral right to violate the contract by dumping and re-writing it.

The next time you hicks in the bleachers need to call a policeman, a fire department, people to fix your city water line, somebody to clear your wreck out of the highway, a teacher to explain your child's behavior, a medicaid worker to explain your mother's policy as relates to her nursing home stay, the dean to explain why your daughter was expelled, the building inspector to thank him for finding your electrician's shortcuts, the highway patrolman who blue lighted the drunk who ran your wife off the road, the worker who moved you swiftly through the absentee voting process or the junior-auditor who discovered that your county tax assessor stole half a million dollars....REMEMBER, these are just a handful of the thousands of state/municipal and other worthless-assed employees covered by the state retirement system.

Anonymous said...

@9:14am Your list of very valued employees is noted.....but they are NOT the ones many are railing about.

There are a few THOUSAND bullshit and yes, WORTHLESS administrative positions that people had, and who gamed the system all the way up to the end - and had their friends position them in a high paying slot toward the end JUST to maximize their 4 years. Obscene salaries we're talking about here....and that's why in the last 10 years ALONE, the retirements SKYROCKETED for their fear of not getting locked in to their windfalls.

Those service sector workers are very much valued, and thank you for singling them out....but if Mississippi were a "company"....sheesh - it would be beyond "top heavy". They know who they are, the truly expendable superintendents, presidents, vice-presidents, associate vice-presidents, directors, coordinators, board chairs, etc. etc. etc. So, be careful - they'll crush anyone who tries to point out how worthless their role really is.

In fact - because PERS was meant to be a sort of social security for public sector folks - why in the hell ARE people like Carey Wright and hundreds of others making twice what the dang Governor makes even allowed to be in the retirement system? There's no reason for them to be!

Anonymous said...

Anyone who thinks PERS retirees are immune or protected from a haircut is living in denial or ignorance or probably both.

Anonymous said...

Thanks for the red herring @9:14.

Anonymous said...

9:14 AM, WOW!
How does one become so, so special?
Please tell us…so maybe we can all be like you one day.

We commoners that transport and stock the shelves with the food you eat,
that keep the hospitals clean where you might need medical care,
that provide and maintain the plumbing, electrical, heating and cooling for your home,
that work in the places that keep you supplied with fuel,
etc., etc., etc.

We private sector commoners do realize how very special you are,
and that we should work 40 years prior to retirement,
and that we should just suffer the real world ups and downs when our retirement accounts returns hit a bump, i.e. just do without,
but since state employees are the modern day Mother Teresa’s of our world,
we should also be responsible for making sure that you never ever have any of the bumps we do.

Please tell us how we can become so special.

Anonymous said...

Leave it to 9:14 am to use the emotional argument when cornered.

Contracts are broken all the time. What is sacrosanct about PERS?

Take your COVID mask off while typing. No need to opine with reduced oxygen.

Anonymous said...

The S&P500 is not the right benchmark for a pension I wouldn't think. You'd expect a pension to have some cash or bond assets, which would reduce its return. Even if a pension fund were fully invested in stocks, trailing the S&P 500 consistently would be a fairly reasonable track record, as if the fund were just put in index funds, you'd still trail the S&P 500 because administrative and trading costs aren't zero, and then there will be tracking error, although that could in theory help or hurt performance at any particular time.

Anonymous said...

Social Security's already put us on notice that benefits very likely will be reduced 20% in 10-15 years. (And thats coming from those who can PRINT $$)

Seems little ole miss with its ELEPHANT PERS should start action now.


*good comment 11:39... that actually represents the 80-90% non-PERS.

Anonymous said...

9:14's point was missed.....please see 10:31am.

PERS has been, and still - terribly abused. those making over - let's say $65,000 a year shouldn't be a part of (much less need) a system like PERS. The simple reason it's upside down is because too many fat-cat nothing administrators cashed in over a ten year period. Can't someone look into this and see who all retired in the last ten years? I'll guarantee you there was a ton of $100-200,000 a year upper level "administrators" that things would have been fine without. Those positions are truly only for the connected good ole' boys/girls.

If you think that hundreds and hundreds of police,firefighters, nurses, teachers, state service personnel, etc. retired and tipped the PERS system completely upside down, you really don't want to know the truth. Lots of cushy admin folk got rich in Mississippi, and are now getting richer off its taxpayers.

Anonymous said...

PERS and Rocky Road? Are the State Government retirees having an ice cream social?

Anonymous said...

" There are a few THOUSAND bullshit and yes, WORTHLESS administrative positions that people had, and who gamed the system all the way up to the end - and had their friends position them in a high paying slot toward the end JUST to maximize their 4 years. Obscene salaries we're talking about here....and that's why in the last 10 years ALONE, the retirements SKYROCKETED for their fear of not getting locked in to their windfalls."

That's a concise and accurate explanation.

And while such has been there from the start of PERS,
thank Haley Barbour for elevating this PERS abuse to an even higher level.

The first month after his election ... very important (and veteran) administrative staff within State Government were replaced by his relatives and his political donors.

What was his catch phrase on every interview on CNN,FOX & MSNBC ?

We "hitch up our britches in Mississippi"

Gawd ... what an embarrassing comment from a Governor.





Anonymous said...

Pop Quiz: How many of the last ten comments were posted by the same Goober?

No red herrings in this fish market. Only Goobers.

Anonymous said...

If the (respectfully) "lowly" 25 yr school teacher or secretary gets $12-13M on her 13th check, I'd really like to know what the middle & top level management get for their 13th... $60, $75... $100M?

Anonymous said...

@9:01 - you're delusional.
The COLA for a person with a high 4 average of around 60k will get about 5 grand after 5 years of retirement, around 12 grand after 10 years, and around 25 grand after 20 years. It's simple math and spelled out on the PERS website.

Anonymous said...

10:04 - 70% of covered employees never see 60k in salary. Rework your example with a realistic figure, like 43k.

Anonymous said...

Someone at PERS or one of their actuaries has a calculated estimated using ages of participants and retirees, benefits paid and expected to be paid, actuarial data like life expectancy etc to calculate when PERS will run out of cash. I have never heard that year mentioned. Anyone else heard? For example, it is projected that Social Security will not be able to pay full benefits around 2034. There should be a similar calculation made for PERS.

Anonymous said...

EXCELLENT Post 6:31pm So, what's the year that should be being openly talked about, and not hidden by the local media? The numbers never lie, and the clock IS ticking down no matter all the dithering that's going on.

"Someone at PERS or one of their actuaries has a calculated estimate".....and has likely been threatened in numerous ways to adhere to the culture of silence as expected in MS government.

Interesting that even the neutered State Auditor Shad White didn't have the balls to mention that date in his circus "audit". He's part of the cover-up...or else it should have been reported. It's like there's a small fire started in the front row of the theater, but shhhhhhhh.....don't say anything, we're up here in the back row - we'll be fine.

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