Legislators lived up to expectations that changes to the $20 billion Mississippi Public Employees Retirement System, or PERS, would be too politically radioactive to take on this past session.
Gov. Haley Barbour left office in January with an urgent call for lawmakers to reform a system he said was inching toward placing a $1 billion burden on Mississippi taxpayers. He wanted action on a host of reforms proposed by a 12-member PERS Study Commission he appointed, including measures to bring balance to a system that pays out about $400 million more a year than it takes in.
With more than 85,000 retired workers receiving PERS benefits and another 120,000 public service workers currently enrolled in the defined benefits plan, legislators apparently saw too much risk in following Barbour’s wishes.
In the end, they limited PERS legislation to passage of a $13 million allocation to cover the retirement system’s capital needs, including a $10 million computer system.
Not even a bill that would forbid PERS to invest in nations that sponsor terrorism could make it out of committee.
And to no one’s surprise, death came quickly to a bill proposed by Rep. George Flaggs Jr. to switch 2012 incoming members of the Legislature from the Supplemental Legislative Retirement Plan to PERS, which would subject new and future lawmakers to the same retirement contribution requirements as public employees and limit benefits to those granted by PERS.
On the release of the 40-page PERS Commission Report, Barbour said initiating its reforms would save tens of millions of dollars in taxpayer contributions to the retirement system through increases in retirement ages, changes in the way retirement benefits are calculated and freezing of cost of living allowances for retirees.
Barbour said implementing the changes for future accruals of current members and retirees as well as all new hires would eventually result in lowered contributions of 2.12 percent for employees. Further, they would increase the ratio of PERs assets-to-obligations to 67 percent from the current 62 percent.
And most important in Barbour’s goal of reducing the cost to taxpayers, implementing the changes would lower the employer (or government) contribution by $122.2 million in the first year alone, Barbour said.
The departing governor insisted “employees and retirees ought to be beating on the door of the legislators saying we cannot accept this — not a system that is in this bad of shape.”
There’s no evidence that came close to happening, though PERS executive director Pat Robertson issued a promise that some sort of action to create a better asset-liability ratio would be considered. “The PERS Board is reviewing its funding policy to see what intermediate steps can be taken toward stabilizing contribution rates as a fixed percent of payroll while increasing the ratio of assets to accrued liabilities,” she said in a Jan 17 response to the Study Commission.
Republican legislators ultimately decided that embarking on reform of the public employee retirement system after taking total control of state government for the first time since Reconstruction would not be prudent.
State Sen. Hob Bryan, an Amory Democrat who chaired Judiciary Committee B, offered them a way out. Wait four or five years to get a better picture of the trust fund’s outlook, he suggested upon the release of the report by the PERS panel.
Legislators were happy to take his advice.