Democratic legislators said they are opposed to “reneging” on the contractual obligation.
Collins’ bill, which is still yet to be filed, would freeze the increases for three years. Currently, retirees receive a 3 percent increase each year. Many take their cost of living adjustments in what is known as a 13th check.
Among other things, her proposal also would halt the cost of living adjustment any year that PERS funding dropped below a designated level and expand the PERS Board to include more appointees of the governor and lieutenant governor. Currently, PERS members elect a majority of the board.
PERS oversees the pension plans for employees of state and local governments, school districts, universities and community colleges.
Collins, R-Tupelo, said she wants to begin a dialogue about a retirement system she fears is unsustainable and is costing taxpayers more each year to prop up.
The system has 58 percent of the funds needed to cover its liabilities over a 30-year period. The desired industry average is 80 percent. But Pat Robertson, PERS executive director, has said the program is solvent and steps have been taken to ensure its continued sustainability, the most recent to increase state and local governments’ contributions from 12.83 percent to 15.75 percent of an employee’s salary starting July 1.
Rep. Steve Holland, D-Plantersville, referring to Collins as his “dear friend” said, “She wants a dialogue. We can do it. The members of the House say no.”
Sen. Hob Bryan, D-Amory, said people currently in the system went to work in the 1960s and ’70s at low-paying jobs with money taken out of each paycheck for their retirement and it would be unfair to change their benefit package now.
The Legislative Performance Evaluation and Expenditure Review Committee, of which Collins is a member, in a recent study acknowledged “the seriousness of the funding concerns facing PERS,” but “believes PERS’s current financial condition is sufficiently sound to make any modification of current employees’ and retirees’ benefits legally inadvisable.”
PEER did recommend an expansion of the PERS Board to include “individuals with expertise in investment or financial management.”