Author Archives: Emily Pote

Special Session Letter to the MS Legislature regarding PERS

Posted on by

Dear Members of the Mississippi Legislature,

House Bill 1 has now passed the House and Senate and has been signed into law by the Governor. The bill over time eliminates the state income tax which makes up approximately 28% of the state’s general fund revenue. Elimination of the individual income tax could lead to shortfalls in general fund revenues which would negatively impact the state’s ability to fund PERS and other essential government services. This action was taken despite lagging general fund revenues for the current fiscal year and impending federal budget cuts that will negatively impact Mississippi. While the ultimate depth of budget cuts at the federal level is not known at this time, they will cause significant job losses and funding reductions in our state, which will impact our state’s economy. I remind you that a significant portion of funding for employee positions in the PERS system comes from the federal government.

Last year, the Legislature removed the authority of the PERS board to increase rates that member agencies pay to fund the system, instead giving the final authority to implement rate increases to itself. The Legislature has received two advisory letters from the PERS board confirming the actuary’s recommended employer contribution rate of 25.92% on December 23, 2024, and March 28, 2025. This is based on the PERS actuary’s (CavMac) annual actuarial valuation report dated November 17, 2024, which states: “We recommend that the Board and Legislature consider increasing the Fixed Contribution Rate to the Actuarially Determined Contribution (ADC). This recommendation would remove the phase-in approach altogether, and the contribution rate for the fiscal year beginning July 1, 2026, would be equal to the ADC of 25.92% of annual compensation.” The two additional actuarial firms required by the Legislature agree in substance with the proposed rate and the need for significantly more funding. It should be noted that this recommendation was made before recent declines in the stock market.

Fund PERS. There is currently no funding for PERS in House Bill 1 or elsewhere. The Tier 5 hybrid plan contained in House Bill 1 is not a solution in and of itself to PERS funding needs because it does not begin reducing the unfunded liability for decades. An ongoing multi-year commitment to reducing the unfunded liability of the system must be made now, whether it comes in the form of annual cash infusions from a dedicated source, increases in the employer contribution rate beyond those passed during the 2024 legislative session, or a combination of both. Any funding plan should be constructed in accordance with actuarial recommendations.

Support the Defined Benefit (DB)Tier 5 Plan Option. The PERS Tier 5 hybrid plan contained in House Bill 1 will provide significantly lower benefits to future members with no guarantee that projected benefits will be achieved. It does not include a guaranteed cost-of-living adjustment (COLA). The Tier 5 DB plan alternative to the Tier 5 hybrid plan is comparable to the hybrid plan in terms of its impact on system funding, but it provides substantially higher benefits to future PERS members including a 1% COLA, and benefits are guaranteed. We believe that the DB plan will assist in attracting and retaining Mississippi’s public sector workforce of the future. Charts comparing the two plans are attached.

PERS has 368,000 members. They and their families are counting on you to protect their retirement system. Please honor your promise to pay retirement benefits for active employees and retirees who are members of the system now by funding the system. Support the DB Tier 5 plan for future members of the system.

Sincerely,

Bonnie P. Granger, MRPEA President


Open Letter to the MS Legislature

Posted on by

To the Members of the Mississippi Legislature,

PERS has 368k members. Assuming each one has an adult significant other you arrive at 736k potential voters that rely on PERS. They are counting on you to protect the system. At its last meeting the PERS board discussed the serious financial situation that the system finds itself in. The Mississippi Retired Public Employees’ Association (MRPEA) urges you to work with the PERS actuary to arrive at a multi-year funding plan that will protect the system. If a Tier 5 option is to be adopted, we request that you support the Tier 5 defined benefit option.
At this time there is no funding for PERS in House Bill 1 and new PERS members will have the Senate’s Hybrid Tier 5 as their retirement system unless legislation is passed to change either of these issues.

Fund The System. Last year, the Legislature affirmed its support for paying retirement benefits to active employees and retired members of PERS in passing Senate Bill 3231.  As of June 30, 2024, the unfunded liability of PERS stood at $26.6 billion.  An ongoing multi-year commitment to reducing the unfunded liability of the system must be made, whether it comes from cash infusions, increases in the employer contribution rate beyond those passed during the 2024 Legislative session, or a combination of both. Any funding plan should be constructed in accordance with actuarial recommendations.

Support The Defined Benefit Plan Tier 5 Option. The PERS Tier 5 hybrid plan would provide significantly lower benefits to future members with no guarantee that projected benefits will be achieved. It does not include a guaranteed cost-of-living adjustment (COLA).

The Tier 5 defined benefit (DB) plan alternative to the Tier 5 hybrid plan is comparable to the hybrid plan in terms of its impact on system funding, but it provides substantially higher benefits to future PERS members including a 1% COLA, and benefits are guaranteed. We believe that the DB plan will assist in attracting and retaining Mississippi’s public sector workforce of the future. Charts comparing the two plans appear below.

Thank you for considering this information.

Sincerely

Bonnie P. Granger, MRPEA President

March 25 Update

Posted on by
Good morning,

This week was a historic week for Mississippi due to the shenanigans in Jackson concerning legislation. Despite calls and letters from MRPEA and many of our friends to our Legislative Representatives, the Senate modified the language of the original House Bill 1 replacing it with the Senate’s tax plan that includes eventual elimination of the income tax. At the same time, they also removed the House’s language to divert $100 million per year to PERS until the system funding ratio reaches 80%. The Senate’s income tax plan was more conservative than the House’s plan. Unfortunately, House Bill 1 as returned by the Senate to the House contained technical errors that removed some of the safeguards that the Senate intended to include. In spite of this on Thursday, the House passed House Bill 1, as amended by the Senate, sending it to the Governor who indicated that he would sign the bill. The state’s income tax makes up approximately 28% of the state’s general fund revenue. Elimination of the individual income tax could lead to shortfalls in general fund revenues which would negatively impact the state’s ability to fund PERS and other essential government services.

At this time there is no funding for PERS in House Bill 1 and new PERS members will have the Senate’s Hybrid Tier 5 as their retirement system unless legislation is passed to change either of these issues. We must keep making calls and emails to both the House and Senate. Please contact your Legislative members and ask them to:

Fund The System. Last year, the Legislature affirmed its support for paying retirement benefits to active employees and retired members of PERS in passing Senate Bill 3231.  As of June 30, 2024, the unfunded liability of PERS stood at $26.6 billion.  An ongoing multi-year commitment to reducing the unfunded liability of the system must be made, whether it comes from cash infusions, increases in the employer contribution rate beyond those passed during the 2024 Legislative session, or a combination of both. Any funding plan should be constructed in accordance with actuarial recommendations. 

Support the Defined Benefit Plan Tier 5 option. The PERS Tier 5 hybrid plan would provide significantly lower benefits to future members with no guarantee that projected benefits will be achieved. It does not include a guaranteed cost-of-living adjustment (COLA). The Tier 5 defined benefit (DB) plan alternative to the Tier 5 hybrid plan is comparable to the hybrid plan in terms of its impact on system funding, but it provides substantially higher benefits to future PERS members including a 1% COLA, and benefits are guaranteed. We believe that the DB plan will assist in attracting and retaining Mississippi’s public sector workforce of the future. Charts comparing the two plans appear below. PERS%20Tier%205%20Comparison.png2.jpgSincerely,
Bonnie Granger
MRPEA President

MRPEA Position Statement On PERS

Posted on by
 To the Members of the Mississippi Legislature:

The Mississippi Retired Public Employees’ Association (MRPEA) offers the following thoughts on The Public Employees’ Retirement System (PERS) for your consideration.

The Unfunded Liability. Last year, the Legislature affirmed its support for paying retirement benefits to active employees and retired members of the system in passing Senate Bill 3231. To do this, the unfunded liability must be reduced. As of June 30, 2024, the unfunded liability of PERS stood at $26.6 billion.  Currently, House Bill 1, as amended by the Senate, provides no new funding for PERS.  Senate Bill 2439, as amended by the House, provides $100,000,000 of the net proceeds from the Mississippi Lottery annually to fund PERS until the system’s funded ratio reaches 80%. This meaningful step towards funding the system is appreciated, but additional funding beyond this amount is needed.  MRPEA respectfully requests that an ongoing multi-year commitment to reducing the unfunded liability of the system be made, whether it comes from cash infusions, increases in the employer contribution rate beyond those passed during the 2024 Legislative session, or a combination of both. Any funding plan should be constructed in accordance with actuarial recommendations. 

Tier 5. The new PERS Tier 5 hybrid plan passed by the Senate would provide significantly lower benefits to future members with no guarantee that projected benefits will be achieved. The new Tier does not include a guaranteed cost-of-living adjustment (COLA). 

The PERS board met in a special called meeting on February 5 to review a Tier 5 defined benefit (DB) plan alternative to the Tier 5 hybrid plan. The Tier 5 DB plan is comparable to the hybrid plan in terms of its impact on system funding, but it provides substantially higher benefits to future PERS members including a 1% COLA, and benefits are guaranteed. We believe that the DB plan will assist in attracting and retaining Mississippi’s public sector workforce of the future. Charts comparing the two plans are attached for your review. MRPEA supports the DB plan as the preferred Tier 5 plan option.PERS%20Tier%205%20Comparison.png2.jpgTax Cut Proposals. The House and Senate have differing proposals on cutting/eliminating the individual income tax in the state. The House also proposes to increase the sales tax. Both chambers seek to reduce grocery taxes and increase gas taxes. ALL retirees in Mississippi, including PERS retirees, do not pay state income tax on distributions from qualified retirement accounts. Reducing or eliminating the individual income tax does not assist them financially. Raising the sales tax from 7% to 8.0% would increase taxes for retirees.

Further cuts in individual income taxes could lead to shortfalls in General Fund revenues which would negatively impact the state’s ability to fund PERS and other essential government services. State revenues are below estimates and substantial uncertainty exists regarding federal funding and the economy in general.  MRPEA opposes cutting/eliminating the income tax along with increasing the general sales tax.

Thank you for reviewing and considering this information. 

Sincerely,
Bonnie Granger
MRPEA President

2025 Legislative PERS Issues

Posted on by

Monday, February 17 Update

Dear MRPEA Members,

PERS Key Issue-The Unfunded Liability
Last year, the Legislature affirmed its support for paying retirement benefits to active employees and retired members of the system in passing Senate Bill

To do this, the unfunded liability must be reduced. As of June 30, 2024, the unfunded liability of PERS stood at $26.6 billion. It is time for the Legislature to take action to fulfill that commitment. Senate Bill 2439 which recently passed the Senate provides no new funding for PERS. House Bill 1 provides $100,000,000 of the net proceeds from the Mississippi lottery annually to fund PERS until the system’s funded ratio reaches 80%. This meaningful step towards funding the system is appreciated, but additional funding beyond this amount is needed. Message to the Legislature: Fund PERS Now in accordance with actuarial recommendations.

Tier 5
Senate Bill 2439 creates a new Tier 5 Hybrid retirement plan for employees hired on or after March 1, 2026. The new Tier 5 hybrid plan would provide significantly lower benefits to future members with no guarantee that projected benefits will be achieved. The new Tier does not include a guaranteed cost-of-living adjustment (COLA).

The PERS board met in a special called meeting on February 5 to review a Tier 5 defined benefit (DB) plan alternative to the Tier 5 Hybrid plan. The Tier 5 DB plan is comparable to the hybrid plan in terms of its impact on system funding, but it provides substantially higher benefits to future PERS members, and benefits are guaranteed. See below for two chart comparing the two plans. Message to the Legislature: Support the DB plan as the preferred Tier 5 plan option.

Tax Cut Proposals
House Bill 1 eliminates the individual income tax and increases sales taxes to 8.5%. The Senate proposes to reduce the income tax from 4% to 3%. Both bills seek to reduce grocery taxes and increase gas taxes. Retirees in Mississippi, including PERS retirees, do not pay state income tax on distributions from qualified retirement accounts. Reducing or eliminating the individual income tax does not assist them financially. Retirees in Mississippi, including PERS retirees, will pay more taxes under House Bill 1. Further cuts in individual income taxes could lead to shortfalls in General Fund revenues which would negatively impact the state’s ability to fund PERS and other essential government services. Message to the Legislature: Oppose proposed cuts in income taxes and increases in sales taxes.

Contact your state Senators, Representatives, and other key state elected officials now!

Your Elected Officials
Governor’s office (601) 359-3100
Lt. Governor’s office
(601) 359-3200
House Speaker’s office –
(601) 359-3300
Senators and Representatives during session
(601) 359-3770
MS Legislature website: www.legislature.ms.gov for Senator and
Representative contact info, bill status, calendars, committee membership,
and more.
Find your state legislator – www.openstates.org
·
Thank you as always for letting us serve you!
MRPEA

    4/26/24 Member Alert – What You Need to Know

    Posted on by

    Senate Bill 3231 was just passed out of the Senate and has been referred to the House of Representatives State Affairs Committee, headed by Hank Zuber.  The bill creates a direct appropriation of $110 million (per Senator Parker) into PERS, and it increases the employer contribution by .5% each year over the next 5 years for a total of a 2.5% increase.  While we know getting the PERS-funded liability healthy will take more than that, MRPEA supports this bill. This is a good start.  Further, the Parker bill provides for actuary advisors to be available for the PERS Board and makes no other changes to the PERS Board.  It also allows for a new Tier 5 for the 2025 Legislative Session as needed to help the PERS system become healthy.  The bill also ensures that no benefit changes will be made to current or retired employee’s benefits.  We want our House members and Governor to support this bill.  We also want to thank our Senators who supported this bill.  Please make sure Representative Hank Zuber from Ocean Springs and the rest of the State Affairs Committee, as well as your State Representative, know that we need them to support this bill without changes!

    Representative Zuber is the Chairman of the State Affairs Committee where Senate Bill 3231 is sitting right now. The names and contact information for the committee members are as follows:

    Henry “Hank” Zuber III, Chairman – 228-875-4866(H), 228-875-1097(W), 601-359-3364(Capitol), hzuber@house.ms.gov, Republican-Jackson County
    Robert L. Johnson III, Vice-Chair – 601-445-5690(H), 601-442-9371(W), rjohnson@house.ms.gov, Democrat- Adams, Franklin, Jefferson
    Willie Bailey – 662-335-5310(H), 601-359-3363(Capitol), wbailey@house.ms.gov, Democrat – Washington, Greenville, MS
    Donnie Bell – 601-359-3396 (Capitol), dbell@house.ms.gov, Republican – Itawamba, Tishomingo
    Bryant W. Clark – 662-834-4074(H), 662-834-6133(W), 601-359-2845 (Capitol) bclark@house.ms.gov, Democrat – Attala, Holmes, Yazoo
    Joey Hood – 662-547-9818(H), 662-285-4663(W), 601-359-2428 (Capitol) jhood@house.ms.gov, Republican – Attala, Winston, Choctaw, Webster
    Kevin Horan – 662-226-1817(H), 662-226-2185(W), 601-359-3311 (Capitol) Republican – Grenada, Carroll, Holmes, Leflore, Tallahatchie
    Jonathan Ray Lancaster 662-631-5065(H), jlancaster@house.ms.gov, Republican – Chickasaw, Pontotoc
    Steve Massengill – 662-815-5000(W) 601-359-3353(Capitol) jmassengill@house.ms.gov, Republican – Benton, Lafayette, Marshall, Union
    Jansen Owen – 601-746-5201(W), 601-522-3337(Capitol) jowen@house.ms.gov, Republican-Lamar, Pearl River -From Poplarville
    Omeria Scott – 601-649-7677(H), 601-359-4084(Capitol) Democrat – Clarke, Jasper, Jones
    Fred Shanks – 601-540-0041(H) fshanks@house.ms.gov, Republican – Rankin
    Shanda Yates – 601-487-6997(W) syates@house.ms.gov, Independent – Hinds, Madison

    Please also call your family and friends who are PERS members – both active and retired – and share this information. We will continue to post updates on the MRPEA website and Friends of PERS on Facebook.