I mention these things because I’ve been asked repeatedly why I introduced legislation to reform the state’s retirement system. My goal is simple: To ensure the financial solvency of a system that is so critical to thousands of Mississippians – like my family – who depend on it. My mother, my father and my relatives have all participated in PERS. Frankly, I want to make sure the fund has enough money to pay them (and every other public servant). Both as a daughter, an aunt, and legislator, I feel it is my responsibility to make sure we have a strong healthy retirement plan to last for generations.
Let’s consider the facts. Financial liabilities of the plan have been growing at a rapid pace. Last year, the plan was funded at only 64 percent. Today, the system’s funded status is 58 percent, well below the recommended level of 80 percent, and unfunded accrued liabilities exceed $14.5 billion. This means more money is needed to get the system solvent.
The PERS Board has increased what taxpayers pay into the system from 9.75 percent to a recommended 15.8 percent, an increase of more than 61 percent without the approval of the Legislature. (Beneficiaries of the plan have also seen their contribution to the plan increase from 7.25 percent to 9 percent.)
This means that millions of taxpayer dollars are being diverted from education, public safety, and other services to pay for the growing cost of the government retirement plan. I’m simply not willing to sacrifice funding for these areas when we could control the cost of the PERS plan.
To be fair, the financial problems faced by PERS aren’t new. They have been growing since the Legislature granted retroactive benefit increases in the late 1990s and early 2000s – which added tremendous costs to the plan. However, the Legislature did not pay for this benefit expansion at the time. Unfunded benefit expansion coupled with the recent market downturns have led to the system’s current funding gap.
But I know that together, we can fix these problems. My bill was introduced to begin a discussion on how we can fix the problems. The bill puts forth many options except for eliminating the 13th check. I want to repeat that in capital letters so that you can see it: THE BILL PUT FORTH DID NOT ELIMINATE THE 13TH CHECK.
However, we must look at all the provisions of the PERS plan to ensure they are fair for beneficiaries and to all taxpayers. I have heard from retirees who have proposed other good options to fix the system. State employees and all taxpayers deserve to have this conversation continued. Serious deliberation is essential and hard, but you deserve this.
We can consider a temporary freeze of the cost-of-living adjustment, or “13th check,” which will save the plan millions without harming any retiree or state employee. According to estimates, this proposal would save the plan $122 million annually.
We can consider modification of the benefits offered to make sure they are both affordable, fair, and lead to stability. Changes in the benefit structure, such as older retirement age and more years of service, can save more than $90 million annually.
We can consider adding more members to our PERS Board of Trustees to ensure that our plan is being managed by the best and brightest financial professionals available and have equal representation for taxpayers who are not in the PERS system, but are paying for it.
Finally, we must consider eliminating the special legislative retirement plan, known as “SLRP,” which has no basis in good retirement policy. Legislators should get no special treatment when it comes to retirement.
We need to come together to find a solution today rather than kicking the can down the road. That’s only fair to our public servants – like those in my family.
Sen. Nancy Collins is a Republican state senator from Tupelo representing District 6, which includes most of Lee and portions of Pontotoc County. She chairs the Senate Accountability, Efficiency and Transparency Committee.