By Bobby Harrison/NEMS Daily Journal
JACKSON – The 14-member Legislative Budget Committee went on record Thursday opposing changes to the so-called 13th check people in the Public Employees Retirement System are eligible to receive.
Committee members said there is fear among public employee retirees that a commission formed by Gov. Haley Barbour to make recommendations on the system would try to alter the 13th check, which is an annual cost of living adjustment.
Rep. George Flaggs, D-Vicksburg, said that to alleviate fear among retirees, members of the Budget Committee – who include Lt. Gov. Phil Bryant and Speaker Billy McCoy – should sign a letter saying they do not support changing the cost-of-living adjustment. Instead, Sen. Billy Hewes, R-Gulfport, made the motion, and it passed without a dissenting vote.
“Perhaps that will help alleviate any concerns,” Bryant said.
House Appropriations Chair Johnny Stringer, D-Montrose, said he wants more safeguards for the Public Employees Retirement System that covers 162,600 state employees, county and city employees, university and community college faculty and public school employees, including teachers and 82,900 retirees. He said he will try to incorporate language into the committee’s budget proposal opposing any change in benefits.
In recent years, Barbour has expressed concerns about the increase in the employer (or taxpayer) contribution to the system. He had called the system unsustainable.
The state and local governments currently must contribute an amount equal to 12 percent of each employee paycheck. That contribution level will increase to 12.93 percent in January. Employees contribute 9 percent of their paycheck to the system.
Pat Robertson, PERS executive director, said the current projection is that the retirement system would need increases to 14.34 percent in taxpayer contributions over the next three years before those contributions begin dropping to below the current level of 12 percent during the next 10 years. Recent adjustments made by the Legislature would lead to the decrease, Robertson said.
Robertson explained to the committee that the 13th check is in reality an annual 3 percent cost of living adjustment that retirees can receive as a lump sum payment at the end of the year or spread out over 12 checks.
She said the average retiree receives $19,000 annually in state retirement benefits. Without the cost of living adjustment, the average check would be $13,000.
“Not a grand fortune,” Bryant said.