By Joe Rutherford
STARKVILLE – When Gov. Haley Barbour and Treasurer Tate Reeves first talked publicly in 2010 about concerns about the state’s Public Employee Retirement system in the wake a critical study citing unfunded liabilities, state legislators in essence turned a deaf ear to discussions of reforming PERS.
That after the two GOP state officials simply had the temerity to point out that over the last decade, the Mississippi Legislature raised state employee retirement benefits without providing a funding mechanism while simultaneously failing to set aside funds to meet future retiree health care benefits. Those actions cast some financial shadows over the state’s once-pristine retirement system.
There was a reason legislators balked. Lawmakers simply don’t want the increased scrutiny that any discussion of PERS reform will have on the Legislature’s own enhanced retirement benefits.
Since 1989, Mississippi’s 174 legislators and the lieutenant governor have enjoyed a preferential state retirement system that is 1.5 times more lucrative than that provided “regular” state employees like school teachers or highway workers. In a story this week, the USA Today newspaper claimed that “Mississippi legislators get two pensions that on average add up to 165 percent of their salary.”
The special legislative system – called the Supplemental Legislative Retirement Plan (SLRP) – allows legislators to pay into the Public Employees’ Retirement System (PERS) at a rate 50 percent higher than for regular employees. At the same time, the state contributes to the SLRP at a rate 50 percent higher for legislators than it does for regular state employees.
“Regular” state employees are only members of PERS while legislators are members of both PERS and SLRP. The acronym SLRP – referred to as “slurp” by some aware of the dual system – has since its inception drawn criticism as a legislative perk that is unfair to regular state employees and other elected officials.
In the 2000 session, lawmakers attempted to increase their retirement benefits from 1.5 times better to more than 2 times better than PERS benefits. The provision, slipped into a bill in a conference committee, set off a firestorm of public criticism after it was revealed by the media. The Legislature was forced under intense public pressure to reverse itself in a special session and forego the increased benefits.
In the wake of that political nightmare, lawmakers avoided the subject of retirement during the 2001 session. But during the 2002 session, one provision of the 2000 legislative retirement improvement package came back to life in the form of House Bill 1148.
On Page 56 of the voluminous bill, a simple deletion was made from Section 25-11-309 of the Mississippi Code: “However, in no case shall the aggregate amount of the retirement allowance from the Supplemental Legislative Retirement Plan and the Public Employees’ Retirement Plan on legislative service or service as President of the Senate (the lieutenant governor) exceed 100 percent of the average compensation.” In other words, the law was amended to allow longtime legislators with 33.5 years of qualified PERS service to draw retirement benefits in excess of 100 percent of their average salaries.
A 2010 Pew Center on the States study declared “serious concerns” about Mississippi’s management of the state’s long-term pension liabilities and says the state needs to improve how it handles state retiree health insurance and other benefit obligations – citing an unfunded state pension liability of $8 billion and an unfunded health insurance liability of $570 million.
Some PERS reforms, primarily for new state hires, are necessary. But it’s unlikely in 2012 that state lawmakers will want to tackle major PERS reform any more than they did a decade ago because to do so puts a huge spotlight back on the politically gangrenous SLRP.
Sid Salter is a syndicated columnist. Contact him at 662-325-2506 or email@example.com.