Wednesday, April 10, 2024

PERS Bill: Dead Once, Dead Twice?

It is a truism in the Mississippi Legislature that a bill can die three deaths before it is truly dead.  Such applies to the PERS "reform bill" the Senate killed last week. 

HB #1590 would have replaced the current PERS Board of Trustees with a new Board comprised of 9 trustees appointed by the Governor and Lieutenant Governor while the retirees would elect the remaining two members.  The retirees elect all members of the current board.  

The bill also would have rescinded a 2% increase in the employer contribution scheduled to take place later this year.  The PERS Board voted last year to implement a 5% rate hike spread out over three years (2% in 2024, 2% in 2025, 1% in 2026).   

The bill passed the House but died in the Senate last week when Government Structure Committee Chairman Chris Johnson killed the bill.  Speaker Jason White and Lieutenant Governor Delbert Hosemann fired press releases at each other and that was the end of that, right.  

Well, not so fast my friend.  Sometimes a bill can be revived if another bill with the relevant Mississippi Code sections is still alive.  Such a bill fit the bill in the form of HB #1618.  The bill addressed using health care collaboratives but it is enough to give HB #1590 backers some hope.  

The Senate amended and passed the bill yesterday.  The amendment rescinded the 2% rate 2024 rate hike but made no changes to the Board: 

(c) Employer's accumulation account. The employer's accumulation account shall represent the accumulation of all reserves for the payment of all retirement allowances and other benefits payable from contributions made by the employer, and against this account shall be charged all retirement allowances and other benefits on account of members. Credits to and charges against the employer's accumulation account shall be made as follows:

(1) On account of each member there shall be paid monthly into the employer's accumulation account by the employers for the preceding fiscal year an amount equal to a certain percentage of the total earned compensation, as defined in Section 25-11-103, of each member. * * * From and after the effective date of this act, the increase in the employer's contribution rate scheduled to take effect on July 1, 2024, is rescinded and shall not take effect.

(2) For the public good, any recommendation by the board to adjust the employer contributions shall be accompanied by at least two (2) assessments from actuaries who are independent from each other and the retirement plan. The actuaries shall analyze the economic impact of any such recommendation to the system and state, including, but not limited to, information showing the fiscal impact to every agency and arm of the state, including, but not limited to, state agencies, cities, counties and school districts. The actuarial assessments, with any such recommendation to adjust the employer contributions, shall be submitted to the Lieutenant Governor, Speaker of the House, Chairman of the Senate Appropriations Committee and Chairman of the House Appropriations Committee.

(3) The board shall have the authority to make recommendations regarding additional funding sources for the retirement plan, including employer contribution increases, based on the assets and liabilities of the retirement plan, and the analyses required by paragraph (2) of this subsection (c). The Legislature shall have the sole authority to implement any such recommendations.

(4) This section shall not be construed to provide authority to reduce or eliminate any earned benefits to be provided by the state to persons drawing a retirement allowance or to members of the system as of the effective date of this act.

Thus the legislature gives itself the right to raise the employer contribution rate while handcuffing the Board.   History & text of bill.

Kingfish note: The legislature can rescind the rate hike scheduled for this year but it will need to dump some money into PERS if the bill passes.  

JJ estimated what the cost would be for the five-point increase in a December 2022 post.  Take the numbers posted below and double them if the consultant's recommendation is followed. 

Public School Districts

The PERS rate hike hits public schools the worst.  JJ estimates JPS will pay an additional $7 million while Rankin County schools will pay more than $5 million.  

JPS: $6.8 million

Rankin County School District: $5.2 million

Madison County School District: $4 million

Clinton Public School District: $1.3 million

Hinds County Public School District: $1.2 million

Pearl Public Schools: $1.1 million

Canton: $906,003 


Rankin County: $1 million

Madison County $870,834 (based on 2020 audit)

Hinds County: The Budget & Finance Department estimated the increase will be $1.5 million. Hinds County has not produced an audit since 2019 when the current Board assumed office. 



The PERS pain hits the cities as well although not as badly as the public school districts.  Most of the burbs are in the $400-$500,000 range.  However, Jackson is going to suffer an estimated $3 million hit.  To say Jackson can't afford the increase is putting it mildly.  City Council President Ashby Foote said the city estimates it will be around $2.7 million. 

Jackson: $3 million (based on 2020 audit.)

Ridgeland: $574,000

Pearl: $482,000 (Mayor Windham said it would be approximately $570,000). 

Clinton: $496,000 (Mayor Fisher said it would be close to $600,000.) 

Flowood: $506,000

Madison: $477,913 (City Clerk said it is estimated to be $580,000.)

Brandon: $336,000

Canton: $280,000 (Based on 2019 audit.)

Richland: $289,000

Byram: $50,000 



Anonymous said...

Senate revision basically just sticks the legislature’s head in the sand. Let’s do do anything, but reserve the right to do something down the road. Spineless.

Anonymous said...

Attn 10:13. You sound like one of those underworked, over paid state of Mississippi employees.

Anonymous said...

"Attn 10:13. You sound like one of those underworked, over paid state of Mississippi employees.

April 10, 2024 at 10:31 AM"

I disagree, and am no fan of the "underworked, over paid" employees. However, you cannot possibly be on the side of the undereducated do-nothings in the legislature. There is not much difference between the two.

Anonymous said...

Who you gonna believe, an actuary with a masters degree, or a Mississippi legislator? Trust me, this will lead to PAIN down the road. I mean even more pain than was already coming.

Cut benefits or increase funding. That is the only solution. It is not that hard.

Anonymous said...

The math don’t work.

Anonymous said...

IF the employee is doing their job there is no overpaid Mississippi public employee. Haters can hate on, but I can't find a state that pays less to their employees. You can cherry pick a few jobs but overall, who wants to work for Mississippi if they can go to another state.

Anonymous said...

The legislators should be careful about for what they wish. Moving the responsibility for rate hikes to the legislature moves the fiduciary responsibility to do what best for the PERS system to them as well. Failure to follow the actuaries' recommendations for rate increases would violate that fiduciary responsibility and if PERS funding and/or benefits ever makes it to the courts, the legislature would have a hard time justifying how they refused to adequately fund the system with over $7 billion in general funds available.

Anonymous said...

At 10:31 - I've never known of a Municipal, County or State employee who was overpaid unless he/she was elected. Can you share your wage and salary survey?

Anonymous said...


"Failure to follow the actuaries' recommendations for rate increases would violate that fiduciary responsibility and if PERS funding and/or benefits ever makes it to the courts, the legislature would have a hard time justifying how they refused to adequately fund the system with over $7 billion in general funds available."

Mississippi legislators (and executive branch administrators) violate their fiduciary responsibilities year in and out, and Mississippi courts don't give two shits about it. Only the lawyers get their money.

Anonymous said...

There is one reason Legislators won’t address this problem: self-preservation over doing what’s best for the state.

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