Groups express concerns over possible PERS changes

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Published: September 15,2011

Tags: benefits, retirement, state government

JACKSON — Groups representing current and former state employees in Mississippi say they are worried about the possibility of changes in the Public Employees Retirement System.

More than 100 people attended a hearing yesterday at the state Capitol. Many expressed concerns to a group that’s studying ways to make PERS more financially stable.

Republican Gov. Haley Barbour appointed the study group last month, and it’s supposed to make recommendations in mid-November. Barbour leaves office when his second term ends in January, but a new group of legislators could consider any proposed changes.

Some speakers yesterday said many people make less money working for the state than they could make in the private sector, but the public sector jobs are attractive because of a relatively generous retirement plan.

Philene Allen of Cleveland, who is on the board of a teachers’ group called Mississippi Professional Educators, told the study group that government employees deserve to have their pensions protected.

“These public servants could have worked in other states for higher pay,” Allen said. “They chose to invest in Mississippi.”

Gulfport Mayor George Schloegel, a Republican, chairs the governor’s study group and said members have no preconceived notions about what recommendations they’ll make.

Brenda Scott, president of the Mississippi Alliance of State Employees, said workers are worried.

“Our phones have been ringing off the hook,” Scott said. “No one should be making scapegoats of public employees.”

Sam Valentine, president of the Mississippi Retired Public Employees Association, said some lawmakers have told him Barbour’s goal is to alter the benefits structure.

“We know he’s coming after us with this plan,” Valentine said.

Mississippi PERS manages pension funds for 80,000 state and local government retirees and 167,000 active employees. The members include teachers, firefighters, state hospital workers, prison guards and other nonfederal government workers. State troopers and legislators have separate funds.

Tim Medley, a Jackson investment adviser, served on the PERS Board of Directors as a non-voting member. He said yesterday he believes that more investment professionals should be on the board.

In appointing the study commission, Barbour said it will look for ways to improve the state system’s financial management and investment structure. Among other things, it will examine what portion of the system is funded by taxpayers and what portion is funded by government workers’ contributions toward their own retirement.

Barbour said the commission also would examine the legality of changing retirement benefits for current and future state employees. He said the current system “relies too heavily on increased contributions from taxpayers” and is unsustainable. The system is currently about 67 percent funded.

The state last year temporarily increased the amount that PERS members have to pay toward their own retirement. Starting July 1, 2010, and lasting for two years, the contribution rate for educators and employees of state and local governments rose to 9 percent from 7.25 percent of their salary.

When he signed the change into law, Barbour said that if workers don’t pay more into their own pension, more state tax dollars would be needed to keep the fund solvent. Opponents said some workers are struggling, and the pension change amounted to a pay cut.

The state retirement system says in a report posted on its website that it “is not as well funded as we should or would like to be.” PERS says it has been affected by the poor performance of the stock market in recent years. It also says its unfunded accrued liabilities have more than doubled during the past 12 years.”

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