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.
30 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.
no kidding - think about investing 9 effin percent of your salary in the S&P 500 for the last 10 years versus being pissed away in a PERS account somewhere
Yes he did.
Yes, but there are a lot of administrators eating out of the PERS public trough.
Found Rukia/Lumumba username
No
LEO needs to start paying for their on lawsuits instead of taxpayers paying when they F up
MHP wasn't included in Tier 5, what makes that job more special than any other first responder role? Can't have it both ways....
What’s the Mississippi Legislature Retirement Plan?
@ 1:35, this is 1:08. I am aware of that - I am also in the system. But that's not what they want.
Is the Legislature’s retirement plan changing as well??
LEO need to pay for law suites that they caused instead of the tax payers
Perfect example of a MS male response. Arrogant and has no couth! And u are right - the government cannot invest their way out. They promise what they cannot deliver and their constituents drink that koolaid every time and vote them back in. A generation of people will be caught paying the biggest price - they have spun the wheel and now we wait to see which generation. It will be sooner than u think.
A typical LEO/Fire Agency that employs 100 people has less than 10% Administrative positions. That means the non “combat” positions include 40 & 50 year olds. Under Tier 5 it would mean 60 year olds.
If you think that a 35 year career is sustainable then go apply for the job. Good luck making it up through the ranks to an administration position and retirement.
Don’t be surprised when you dial 911 and a 50 year old shows up because you won’t hold the legislature and municipalities accountable for funding LEO/Fire.
You get what you pay for.
I’m encouraging them all to leave Mississippi for greener pastures. Then you can throw a “tantrum” when you get the bottom of the barrel showing up to your 911 emergency.
Law Enforcement also needs to start counter suing those that file law suits that have no merit just because they want an easy payday. Law Enforcement also needs to start arresting those that file false complaints under the statue of filing a false police report
Career LEO and Fire combined make up a whopping 7% of PERS as a whole. To say that they can’t have their own Tier is admitting that you’re ignorant of what they do on a daily basis and how PERS is funded… FOR 30 YEARS. And they’re the ones throwing a tantrum because they will now be required to do 35 years under Tier 5 day for day with no accrued leave/sick towards service credit, no COLA, and 1% per year for 35 years totaling 35% at retirement, down from 50% in Tier 4?
Yeah, I would throw a tantrum too. Good for them.
Delbert is too old to run again.
Frankly, the real problem is that the Federal Government made it impossible for individuals or employers to choose on our stock market investments wisely. Indeed, it's worse now because a company's prospectus to be a traded stock no longer has to be accurate. I couldn't do my own investments if I wanted to due to lack of reliable information.
I did better before Charles Swab got to decide which companies' stock I got to buy and mixed " dogs" into the one's I'd have bought on my own.
Thankfully, all this hand-wringing over PERS is wasted energy. As long as we have elected officials like Brice Wiggins and Jeremy England promising to stay tuned to the problems and being transparent, you can trust that things will work out.
Formulating and recommending a plan to achieve solvency, without crippling current employees, future employees and retirees is irrelevant as long as an elected official stays tuned and remains transparent. Right?
FYI: both of them are still promised a future PERS full retirement, PLUS the enviable Supplemental Legislative Retirement Program (SLRP) benefit on top of regular PERS retirement. 20 years legislative PERS plus a free ten year SLRP bonus = a 30 year retirement.
Let the little people eat cake.
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