Executive Director's Message
By Pat Robertson
To Our Members and Retirees:
December 15, 2011
PERS Study Commission Chairman George Schloegel and Governor Haley Barbour held a press conference Wednesday, December 14, 2011, in Jackson to present the Commission’s recommendations regarding PERS. The Study Commission was formed by Governor Barbour August 9, 2011, to analyze the program’s structure and recommend improvements of the System.
The PERS Board of Trustees will now give the report prudent and thoughtful review then, if appropriate, respond to the Legislature and make that response public on the agency’s website.
As has been continually emphasized since this Commission was formed, any recommendations regarding changes to benefits will require legislative action. Concerned individuals should contact their state representative or senator to voice thoughts about any potential changes to PERS.
August 10, 2011
August 9, 2011, Governor Haley Barbour announced the creation of the Public Employees’ Retirement System of Mississippi (PERS) Study Commission to analyze the program’s structure and recommend improvements.
This announcement has stirred much concern among both our members and retirees. So, let me be clear about the financial state of our Retirement System. As I have said in the past, we are not as well funded as we should be; however, adjustments have been made and time should “right the ship.” For the year ended June 30, 2011, our investment return was 25.40 percent and our assets had grown to $20.8 billion, providing sufficient liquidity to pay retirement benefits for many years to come. PERS has been around for nearly 60 years, and we plan to be providing retirement security for public employees after their careers in public service for many more years.
We recognize that any discussion surrounding the benefits promised to individuals can cause anxiety and concern, especially when a resulting action may affect their financial future. Bill Benson, chair of the PERS Board of Trustees, is a member of the Governor’s Study Commission and PERS will be involved as a resource in this process.
During recent legislative sessions, employee contributions were increased from 7.25 percent to 9.00 percent; retirement eligibility was increased from 25 to 30 years for individuals hired on or after July 1, 2011; and the benefit formula was reduced for individuals hired on or after July 1, 2011. However, these changes do not address the System’s accumulated unfunded accrued liability (UAL). In fact, the only ways to address the UAL are by achieving investment returns in excess of 8.00 percent on a long-term basis; through increased employee and/or employer contributions; by decreasing benefits for current members and/or retirees; or some combination thereof.
I wish I could say that I know what the Commission will recommend, but I don’t. As a career public employee, I share some of the same angst each of you may feel. However, I have been assured that no biases exist among the members of the Commission relative to the conclusions that the Commission may reach through its study and that the ultimate goal is to ensure that PERS remains well-funded and continues to appropriately serve the interests of its beneficiaries and the taxpayers.
Therefore, we patiently await the November 15 results and appreciate the dedication of the Commission members, though we ask them to keep open minds while studying PERS and the benefits we provide. We further ask that they consider that retirement benefits are only one part of an overall human resources package.
Also important to remember is that this is a Study Commission and whatever recommendations made must be voted on by members of the Legislature before being enacted into law. If you, as a member or retiree, have concerns about this study and its potential impact on your retirement security and/or the retirement security of future public employees, you may wish to discuss the matter with your state senator and/or state representative.
PERS is here for our members and retirees, and we take seriously our role in administering the benefits established by the Mississippi Legislature. We are proud to be a fundamental part of the overall compensation package needed to recruit and retain quality public employees in Mississippi. We also take great pride in the fact that we are now paying annual benefits of $1.8 billion to 88,000 retirees, most of whom live in Mississippi, and that these benefits act as an economic stimulus to every Mississippi community and keep many individuals off public assistance rolls.
UPDATE: The PERS Study Commission held a Public Comment Opportunity Sept. 14 in Jackson to give concerned individuals a venue to share thoughts about the Commission and its work.
Commission Chairman George Schloegel began the meeting by emphasizing that the 12-member Commission, appointed by Governor Haley Barbour, had confidence in the state retirement system and reiterated that the Commission was charged solely with studying PERS and making recommendations to the new Legislature by November 15. The Commission has no authority to make any changes to PERS; only the Legislature can make changes.
Schloegel introduced Ken Alberts of Gabriel, Roeder, Smith & Company (GRS), the actuarial consulting firm hired by the Commission to help study PERS. Schloegel said the funds used to pay GRS fees were “federal grants” intended for “investigating” and were not paid out of PERS money.
A total of 15 individuals from the public and private sectors took advantage of the three-minute allotment for comments before the Commission. Organizations represented by the speakers were Mississippi Professional Educators, Grenada Lake Medical Center, Mississippi Association of State Employees, Retired Education Personnel Association, Mississippi Gulf Coast Community College, Canton Public School District, Clinton Public School District, Mississippi Association of Educators, Mississippi Fire Chiefs Association, Medley & Brown Financial Advisors, Mississippi Retired Public Employees’ Association, and Mississippi Center for Public Policy.
After hearing the 15 presentations, Schloegel took time to thank the forum participants and to commend the PERS Board of Trustees and the Legislature for the steps they have already taken to improve PERS’ funded status. These steps include an increased employee contribution rate, a longer vesting period, and implementing stricter provisions relative to returning to employment with covered employers while continuing to receive a retirement benefit. However, he emphasized the severity of the Great Recession and said areas already identified as needing to be studied are the Cost-of-Living Adjustment (COLA) and the 8 percent rate of return.
He also shared with the group of the possibility for a second public comment opportunity within the next six weeks, to get public response to the Commission’s report. This second forum would be held at the will of the Commission.
The Commission encouraged continued input from concerned citizens and has updated its website with a report about the Public Comment Opportunity.
If you have questions regarding PERS, please contact us at 601-359-3589 or 800-444-7377.
To view the Study Commission’s webpage on the Governor’s website, click here. This page will direct you to the original Executive Order, signed by the Governor, as well as a public comment form for download. Should you have any specific questions about the Study Commission and/or its objectives, please contact the Governor’s Office at 877-405-0733 or 601-359-3150, or retirementstudy@governor.state.ms.us.
