Collins’ bill, among other things, would have frozen the annual 3 percent cost of living adjustment for the 83,000 public employee retirees.
She said in January she introduced the controversial legislation to begin a conversation about the retirement system that she said is underfunded and a drain on state taxpayers who in recent years have contributed more toward its support.
Her legislation died for the 2013 session this week when she chose not to bring it up before a key deadline in the Accountability, Efficiency and Transparency Committee she chairs. While she killed the legislation for 2013, Collins said she wants to continue the discussion.
She said she received “a lot of excellent feedback” and hopes to put those recommendations into a concise form and perhaps hold a hearing on PERS.
“I do not believe there is an immediate crisis, but I believe there is a looming crisis,” she said. “That is why we cannot put our heads in the sand.”
Collins pointed out that the system, which provides retirement benefits to state employees, local government workers, local school district staff and university and community college staff, is at 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 was to increase the amount paid by the state and local governments from 12.83 to 15.75 percent of an employee’s salary starting July 1.
Besides freezing the cost of living adjustment, Collins’ plan would have given the governor and lieutenant governor three additional appointments to the PERS board. Currently, the governor has one appointee.
Most of the nine-member board are in the retirement system and elected by fellow members. Former Gov. Haley Barbour appointed a study commission that recommended revamping the board to include more financial and investment experts.
Collins’ proposal would have halted the cost of living adjustment any year that the system’s funding dropped below a certain level. It would also have eliminated the enhanced retirement plan provided to legislators, which is separate from PERS.
Many of her recommendations were taken from Barbour’s 2011 study commission. She expressed disappointment that those recommendations had not received more attention.
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.”
It did recommend an expansion of the PERS Board to include “individuals with expertise in investment or financial management.”