JACKSON – Gov. Haley Barbour is proposing that the state’s roughly 30,000 employees, plus about that many teachers, pay a greater percentage of the cost for their retirement benefits.
While the plan has not gained much attention, it could be one of Barbour’s touchier proposals during the 2010 session of the Mississippi Legislature, which begins Tuesday.
“I really can’t see either house passing that,” said House Appropriations Committee Chair Johnny Stringer, D-Montrose.
Barbour said it is the fair thing to do. Plus, he said it is not an issue that must be dealt with by the Legislature.
Barbour said the Public Employee Retirement System board, which manages the state’s pension plan, has the authority under existing law “to set the employee contribution rate in order to maintain the benefits that have been promised to state employees.”
But Stringer said he is working on a plan to ensure that state employees, who have not had a raise since the 2007 session, are not hit with a smaller paycheck because of an increase in their share toward their retirement benefits.
Barbour says PERS has requested a 1.56 percent increase in state contributions – an additional $70 million – “to ensure pension sustainability.”
Plus, an additional $20 million would be needed from local governments, whose employees also are covered by the state pension plan.
Barbour said the employee contribution toward the retirement plan has remained at 7.25 percent since 1991 while the benefits provided to them have risen by a collective price tag of more than $3 billion.
Mississippi taxpayers already pay more than $700 million annually into the system, he said.
“This is obviously unfair to taxpayers,” Barbour said.
In his budget proposal, the governor says he will not recommend the 1.56 percent increase in state contributions. Any increases, he says, should be funded by higher employee contributions “until we have reached a fair balance” with what the employer puts in.
He did not specify an amount.
But others, such as Stringer, says it would be unfair to state employees to essentially reduce their pay during these tough economic times.
While Stringer says he hopes to prevent a dramatic increase in the employee contribution toward retirement benefits, the matter was not dealt with in the budget proposal he and legislative leaders on the House and Senate side adopted in December.
Plus, Stringer expressed hope that the problem might not be as bad as first believed because of recent improvements in the stock market that should boost the earnings of investments made by PERS.
Contact Bobby Harrison at (601) 353-3119 or email@example.com.
Bobby Harrison/NEMS Daily Journal