December 14, 2011 12:36:00 PM
By EMILY WAGSTER PETTUS
JACKSON -- A report being released today could recommend a three-year elimination of cost-of-living increases for Mississippi government retirees and a long-term change in the pension rules for new hires, according to a nonvoting member of the group that produced the document.
Sen. Hob Bryan, D-Amory, said he read a draft that included a recommendation to halt, for three years, the 3 percent annual increase now given to people receiving benefits from the state Public Employees Retirement System.
"This is after the governor said people who worried about their 13th checks were silly," Bryan told The Associated Press on Tuesday.
The cost-of-living adjustment is typically referred to as a "13th check" because many retirees take it as a lump payment at the end of each calendar year. However, they have the option to receive the COLA each month.
Bryan said the draft also included a recommendation that new government employees have different pension rules. Half of their retirement money would go into a defined benefit plan that all PERS beneficiaries have now, and the other half would go into a defined contribution plan with the employees either managing their own investments or hiring someone to manage the investments for them. Bryan said the defined contribution plan would be riskier for employees.
"This obsession with the defined contribution plan is just a philosophical difficulty with having the system that we have," Bryan said.
Republican Gov. Haley Barbour appointed the 12-member commission in August to study the investments, management and other financial aspects of Mississippi PERS. The group on Wednesday is releasing the report with recommended changes to shore up the system's finances.
The group can only make recommendations. Any changes would have to be approved by new lawmakers who take office in January. Barbour's term expires Jan. 10.
During public hearings this fall, public employees expressed concern about the possibility of reduced benefits for their retirement. Many said a reduction would make it difficult for them to retire comfortably. Union leaders said many public employees already work for lower wages than private-sector workers and a defined-benefits retirement package is incentive for many to stick with government work.
The study group was meeting during the legislative election season, and the uproar over possible changes in benefits prompted Democratic and Republican candidates to pledge to protect the system, including preserving the 13th check, if possible.
Barbour's PERS study commission includes business people, elected officials and financial experts and is led by Republican Mayor George Schloegel of Gulfport.
Bill Crawford of Meridian, a retired state employee and former lawmaker who also serves as a voting member of the study commission, would not discuss details of the report in advance. But he said Tuesday that he disagrees with Bryan's assessment of what's in it.
"I don't think Hob read the same draft that I did," said Crawford, a Republican.
Crawford said discussions of the 13th check have been used for partisan purposes. He said current public employees and retirees should focus on the long-term viability of PERS.
"I think the concern, for state employees, ought to be really around the increasing unfunded liabilities of the system, which is really the genesis for the study," Crawford said.
Mississippi PERS manages pension funds for 80,000 state and local government retirees and 167,000 active employees. The members include teachers, firefighters, state hospital workers, prison guards and other nonfederal government workers. State troopers have a separate fund, while legislators have a supplemental fund on top of the regular plan.
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
1. Hollywood comes to Columbus COLUMBUS & LOWNDES COUNTY
2. Prescott to face trial for DUI STARKVILLE & OKTIBBEHA COUNTY
3. CMSD commits Lee property for redevelopment COLUMBUS & LOWNDES COUNTY