November 23, 2012 10:24:24 AM
JACKSON -- The governing board of the state retirement system has increased -- as expected -- the amount employers contribute to the program.
Pat Robertson, executive director of the Public Employees Retirement System, had told lawmakers in September that the increase was coming and would affect state agencies, the public schools and cities and counties.
The board acted in October to implement a new employer contribution rate of 15.75 percent in October. That would be up from 12.93 percent paid into the system by employers in fiscal 2011.
Robertson told the Mississippi Business Journal that the fixed rate is designed to provide more stability in the budgeting process of participating employers and could put the trust on track to achieve an 80 percent funded ratio by 2042.
Robertson had said there is no plan to increase the amount employees pay into the system. Only the Legislature can increase or lower employee contributions.
"While the fixed rate is an increase from the current rate, the fixed rate is lower than the 15.83 percent rate that would have been required effective July 1, 2013, under the prior policy," Robertson said in a notice to the state, county and local officials who must plan for the increased contribution.
Ten years ago, Mississippi PERS had enough money to cover 88 percent of its long-term responsibilities. Now, it has enough money to cover 62.2 percent.
Robertson has said the retirement system was "stable and the benefits are secure" for the more than 91,000 retirees.
Under the current structure, all of PERS is a defined benefit plan, with managers making investments for all participants and retirees receiving a guaranteed payout based on how many years they work and how much they earn on the job.
Mississippi PERS manages pension funds for state and local government retirees and 163,000 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.