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