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Mississippi’s retired public employees are raising a red flag about a bill pending at the State Capitol
By Courtney Ann Jackson
Published: Feb. 6, 2023, at 7:21 PM CST
JACKSON, Miss. (WLBT) – Retired public employees are keeping a close watch on the State Capitol. They’re worried a pending bill would insert the legislature into some decision-making for the retirement system.
For some background, public employees around the state pay into Public Employees’ Retirement System of Mississippi, known as PERS. Right now, decisions about how much employees’ current contributions are made by the PERS board. But pending legislation could put the legislature in the middle of those decisions.
House Bill 605 isn’t the same as when Rep. Charles Busby first filed it.
“I filed House Bill 605 as a bill to allow teachers that have retired, come back and teach in the classroom and still draw their retirement,” said Busby during a personal point of privilege on February 1.
Busby started getting flooded with calls and messages, and that’s when he realized it was “hijacked completely.”
“I was never told about it,” Busby said.
The bill went from 30 to 10 pages when it was amended in the appropriations committee. Now its aim? Require the legislature to sign off on any future contribution increases by PERS. It was those changes that spurred the calls to action from the Mississippi Retired Public Employees’ Association.
“When we retired, we were told what our benefits were gonna be,” said retiree and MRPEA board member Sam Valentine. “And we could plan our retirement income around that until, like, the day of our death.”
Retiree and MRPEA board member Sam Valentine says the board makes decisions based on financial advice to maintain the health of the system.
“We’ve got a lot of people who are retired that are elderly,” explained Valentine. “And to hear that there’s something jeopardizing their system is very upsetting to those individuals. And that’s one of the things that we don’t want to happen and hopefully will not happen.”
The association’s past president says the impacts could go beyond those who’ve already retired.
“To be quite honest, and I’m not saying that they necessarily would…but if the legislature would choose not to continue to make the contributions necessary to keep the system actuarily sound, it’s actually going to have more potential bad things happen to the people that are currently working,” described Ed LeGrand, MRPEA Past President.
The PERS board did vote in December to increase the employer contributions from 17.4 to 22.4% beginning in July of next year.
We received this statement from PERS Executive Director Ray Higgins.
“We are closely watching HB 605 and all other legislation that could affect PERS. The PERS Board has historically always acted as fiduciaries in the best interest of the membership, which they did recently when raising the employer contribution rate based on actuarial recommendations. Long term, ensuring the System is adequately funded is critical for those we serve. We are always willing to work with the Legislature, membership, and others for the betterment of PERS.” —Ray Higgins, PERS Executive Director.
The bill hasn’t been taken up by the full House yet. They have until Thursday to do so in order for it to clear the next deadline.
See the article on WLBT’s website below.
https://www.wlbt.com/2023/02/07/mississippis-retired-public-employees-are-raising-red-flag-about-bill-pending-state-capitol/?outputType=amp
Friday, February 3 Update
Good Morning!
Update on House Bill 605: A member alert was sent out by MRPEA on January 31 regarding the dangers posed by House Bill 605 to the Public Employee Retirement System (PERS) and its beneficiaries. As of 2/2/2023 House Bill 605 has passed out of the House Appropriations Committee and sits on the House calendar. Members are urged to immediately contact their State Representative and Senator to express their concerns regarding this legislation.
What the Bill does:
–It orders that current contribution rates for employees and employers shall not be increased unless authorized by the Legislature.
–It directs PERS to present recommendations for making changes to the retirement system that would apply to future members of the system.
Background: At present, the PERS Board and staff are responsible for ensuring the financial integrity of the retirement system. A vital part of this responsibility involves reviewing and acting on reports and recommendations of the actuary hired by the Board to study and monitor the financial soundness of the system. At its meeting on December 20, 2022, the Board heard recommendations from the actuary and voted based on those recommendations to increase employer contributions during the upcoming year. This action was taken in accordance with the standard operating procedures of PERS.
Talking points when contacting legislators:
–The professional staff and Board of PERS need to make decisions to ensure the financial integrity of PERS.
–Changes do not need to be made to the PERS system that would cut benefits to retirees, now or in the future.
–Retirees oppose House Bill 605
Quick facts on PERS:
–PERS system members total 353,000.
–PERS paid $3.1 billion in retirement benefits last year.
–92 percent of all benefits paid remain in the state.
–Millions in benefit payments flow to virtually every county benefiting Mississippi’s economy at the local and state levels.
–Over the 30-year period that ended June 30, 2022, member contributions and earnings from investments provided 72% of the retirement system’s total funding.
–Each dollar “invested” by Mississippi taxpayers in the plan supports $4.50 in total economic activity in the state.
Resources:
Senators and Representatives during session – 601-359-3770
Measure Search | MISSISSIPPI LEGISLATURE (ms.gov) Read the full text of House Bill 605
Find Your State Legislators – Open States
We just received word that House Bill 605 has passed the appropriations committee. If voted into law, this bill would allow for the legislature to have veto power over the PERS board. It would greatly hinder the PERS board’s ability to make fiscally responsible decisions for the system, as well as allow the legislature to tie the board’s hands when making contribution increases. We cannot overstate how dangerous this would be for the health of the system. We ask you to call your legislators and let them know that as a PERS member, you do not support this bill! This will affect ACTIVE members just as much as it would retired members as it would jeopardize the health of the system. Please share this with your friends and neighbors and encourage them to call as well!
House Bill 531 would:
Senate Bill 3164 would:
House Bill (HB) 531 would increase the sales tax that all Mississippians pay on
most items by 20% raising the rate from 7% to 8.5%. The House plan would eliminate
state income taxes for most taxpayers in 2023 and phase it out totally in future
years. The state income tax accounts for 1/3 of general fund revenue at present.
If you are at least 59 years old, half Mississippi does not impose income tax
on your retirement income. This includes distributions from 401ks, IRAs, pensions, deferred compensation plans, and Social Security and applies to all Mississippi retirees (in both the private and public sectors). Because your retirement income is already exempt from state income tax, retirees living on a fixed income from these sources will receive no benefit from the elimination of the state income tax while paying 20% more sales tax on most items under HB 531.
The Senate has also filed a tax cut bill: SB 3164. Overall the Senate plan has a number of elements that could benefit PERS members and other retirees but does include a phase-out of the 4% state income tax bracket and up to a 5% one- time tax rebate in 2022 only for those who paid income taxes. Further erosion of the state income tax revenues is not in the best
interest of PERS members. Tax rebates which can be implemented periodically
based on available revenues represent a more prudent approach to managing the
state’s finances. However, these rebates should be made to all Mississippians who filed a tax return, not just those who paid income tax. This would benefit all retirees including PERS members who pay substantial amounts in sales, local and other taxes each year.
Recommended Action
Oppose HB 531. Request amendment of SB 3164 by eliminating the
proposed phase-out of the 4% income tax bracket and making the tax rebate in 2022
available to all Mississippians filing a tax return, not just those who paid income tax.
Contact Speaker of the House, Phillip Gunn, Ways and Means Chairman, Trey Lamar, Lieutenant Governor, Delbert Hosemann, Senate Finance Chairman, Josh Harkins, and your local Representative and Senator at the Capitol Switchboard (601) 359-2220.
What the State Economist’s Office says
The State Economist’s Office has studied the House tax cut plan and
determined that by 2032 it would result in a loss of population and a reduction
in employment and personal income in Mississippi. By 2035 there would be a
reduction in state gross domestic product. These findings have negative implications
for current and future PERS retirees and for the state as a whole.
What state business leaders say
“The Mississippi tax environment was not high profile nor even discussed
significantly as a priority,” said a report released by the Mississippi Economic
Council at the state Capitol on Wednesday, based on dozens of meetings and hundreds
of surveys of business leaders across the state last year.”
“A businessman raised the topic (at one meeting) and dismissed it as a bad
idea (a distraction issue, but not really a hindrance to most businesses).”
State business leaders consider the lack of skilled workers, Mississippi’s image, and problems from the pandemic far more pressing issues.
LEGISLATIVE ALERT
Sen. Josh Harkins, (R), Rankin County has introduced Senate Bill 2726 which would bring forward provisions of the PERS law for purposes of a possible amendment. The bill does not specify what the amendment may be, but if it is brought up in the Finance Committee, which Senator Harkins chairs, anyone on the committee can offer any amendment to the law including:
This is a dangerous bill for PERS members since it does not specify exactly what the bill is intended to do, but has the potential to do a great deal of damage to PERS.
WHAT TO DO: Please contact Sen. Harkins at (601) 359-3770, and let him know MRPEA does not want this bill to be brought out, ESPECIALLY those who live in Rankin County. You will be leaving a message with whoever answers the phone, You may also email Senator Harkins at jharkins@senate.ms.gov.
WHAT TO SAY: Be sure to mention that the bill opens PERS law for possible amendment as well as giving the bill number (SB 2726).
ARE THERE OTHER BILLS I SHOULD WORRY ABOUT: Five other bills have been introduced dealing with various PERS issues which also do not need to be brought out because they also open PERS law up for possible amendment.
WHO SERVES ON THE SENATE FINANCE COMMITTEE:
You may use the phone number above to send a message to any of these members ((601) 359-3770) or email them using their first initial, last name@senate.ms.gov.
The deadline for committees to report bills is February 11, 2021 so please contact as many of these legislators as you can prior to that time—especially Senator Harkins.
