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PERS bills strike certain benefits from retirement salary calculations

A pair of identical Mississippi House and Senate bills that tinker with compensation calculations for public employee retirement purposes survived last Tuesday’s cutoff for advancing out of committees.

Legislators held off this year tackling major reforms to the Public Employees Retirement System suggested by former Gov. Haley Barbour’s 12-member study commission. Barbour created the commission and pushed for aggressive reforms to reverse what he said is an annual imbalance of more than $12 billion between what the retirement system is taking and what it is paying out.

Not getting addressed this session is a key proposal of Barbour’s study panel that called for a three-year moratorium on cost of living allowances, or COLA, for Mississippi’s retired public employees.

The moratorium recommended by the study commission could save the Public Employees Retirement System about $40 million annually but would deprive about 80,000 retirees of income needed to keep up with higher prices for housing, food, energy and other necessities.

That doesn’t mean, however, that lawmakers are keeping their hands entirely off the retirement system.

A House bill by Rep. Herb Frierson and Senate companion bill by Sen. Joey Fillingane would remove “maintenance” benefits such as medical and life insurance coverage from salary calculations for retirement benefit levels.

The bills also would limit the amount of a pay increase used in retirement benefit calculations to 8 percent if the raise came within 24 months of the employee’s retirement. An exception would be granted if the raise came because of a substantial chance in the employee’s job duties.

The provisions would apply to benefits accrued after July 1 of this year.

Frierson’s legislation, HB 517, has passed the House. Filligane’e bill, SB 2218, stayed alive by clearing the Senate Finance Committee.

Removing maintenance pay from retirement pay calculations was among the several recommendations to come from Barbour’s study commission in mid December.

The $20 billion PERs fund covers 86,000 public service retirees whose ranks include former state, county and city workers and public school and community college teachers and administrators.

About 120,000 current workers are enrolled in the defined benefits plan. Workers pay 9 percent of their wages into the retirement system while employers contribute 12 percent.

The employer share increased to 12.93 percent on Jan. 1. Barbour contended when the study panel’s report came out that implementing the changes would lower the employer contribution by $122.2 million in the first year alone.

Brenda Scott, president of the 4,500-member Mississippi Alliance of State Employees/CWA, said last week she thinks legislators are waiting for their election districts to become official before moving on the politically sensitive bulk of the Barbour study commission’s proposals. They want to know how many current public employees and retirees they will have in their district before deciding how to vote, she said.

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3 comments

  1. this bit of legislature should be dropped and left alone people earned this benefit and retired in good faith depending on this income to survive its easy for a fat greedy slug like barbour to try to save the state or business money after all he s never earned an honest dollar in his life

  2. Bull. You know who is paying for those benefits? Your fellow citizens. So why don’t you sometime go next door and thank your neighbors, who most likely don’t have a fat state pension, and thank them. Meanwhile, ask them if they mind that the state adds in all the little extras like when your neighbors paid for your life insurance and your medical insurance, so that you can bump your pension up a few extra bucks at their expense.

  3. Strange, but I don’t see mention about legislators’ retirement calculations. If everyone would read the USA Today article dated April 16, 2012, an explanation is given that Mississippi legislators, along with Kentucky, South Carolina, Texas, New Mexico, Illinois, Indiana and many others, add their yearly expense accounts (even mileage reimbursements) to the yearly salary as a basis for the yearly retirement amount, which often ultimately amounts to 17 times more than their annual base legislative salaries. Shameful.

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