Public workers oppose major PERS changes

By Bobby Harrison/NEMS Daily Journal

JACKSON – Opposition to any major changes to the state’s Public Employees Retirement System was the consensus of speakers Wednesday at the state Capitol.
Groups representing state employees, firefighters, school teachers and county and city employees told a PERS Study Commission formed by Gov. Haley Barbour that retirement benefits are a major inducement to recruit people to public sector jobs that often pay less than similar positions in surrounding states.
“These public servants could have worked in other states for higher pay,” said Philene Allen of Cleveland, a member of the Mississippi Professional Educators Board of Directors. “They chose to invest in Mississippi.”
The commission is charged by Barbour with studying PERS to make recommendations in mid-November that can be considered by the 2012 Legislature. In announcing the commission, Barbour said the current system “relies too heavily on increased contributions from taxpayers” and was unsustainable.
Barbour has voiced concerns through the years about a system that is currently 67 percent funded.
“We know he is coming after us,” said Scott Valentine of the Retired Public Employees. “We are going to do our best to let retirees in the state know what it really means.”
Gulfport Mayor George Schloegel, chair of the commission, said the panel had no preconceived notions of what, if any changes need to be made to the system. But Schloegel added that the commission, which is being funded through a federal grant, should look at every aspect of the system, which according to last reports had an unfunded accrued liability of $11 billion.
He also said the commission is not releasing its report until mid-November to prevent it from being an issue in the upcoming elections.
“When we hear the system is hard on the taxpayers, we are taxpayers, too,” said Ann Thames, a retiree from the Department of Mental Health. She said the state’s personal care workers take care of mentally ill patients and developmentally disabled people for less than $20,000 per year and view the retirement system as a incentive to continue to do a difficult job.

A few of the speakers did acknowledge concerns with the system. Tim Medley, a Jackson investment adviser, said he served on the PERS Board of Directors as a non-voting member, and believes that more investment professionals should be on the board. He also said the 8 percent rate of returns on investments might be “ambitious.”
Part of the problem facing the system has been caused by the poor economy and poor performance by the stock market in recent years. But that was offset at least in part by a 25 percent rate of return for the past year.
Rep. Preston Sullivan, D-Okolona, a non-voting member of the commission, said the Legislature has taken steps in recent years to deal with PERS problems, such as changing the required years of service for new hires, changing the formula for benefits and increasing the employee contribution from 7.25 percent to 9 percent of their paychecks.
“Some of these things take time to have an impact,” Sullivan said. “Like raising an oak tree, it takes time. It has to be nurtured. You can’t just go on one year or five years.”

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