PERS Committee Recommends Changes State Retirement SystemBy Jeffrey Hess | Published 14 Dec 2011 06:07pm |
Current and future Mississippi retirees could experiences changes to the state's Public Employee Retirement System. MPB's Jeffrey Hess reports Governor Haley Barbour established the committee to examine the long term stability of the system.
The Public Employees Retirement System, known as PERS, currently has enough funds to cover only 62-percent of its expected liability.
Governor Haley Barbour says he established the committee to look for ways to increase its funded status and long term future.
Among the changes is a temporary freeze to the annual 3-percent cost of living adjustment, Barbour says that would account for retirees getting additional money even though the cost of living did not increase.
"For three years, there would be no increase. It would stay static to catch up for the over payment. And then after three years, we would go to a real cost of living adjustment based on a consumer price index, based on something similar to what Social Security is based it," Barbour said.
The committee also recommended raising the retirement age from 60 to 62, lowering the assumed return on PERS investments, and looking at adding a defined contribution plan...similar to a 401K...that employees could voluntarily contribute to.
Any of these changes would have to be approved by the new legislature that takes office January third.
Senator Hob Bryan of Amory is skeptical of the need for immediate changes, saying that current economic turmoil make the system appear to be in more trouble than it is.
"Its true that if you look at this brief period of time, during which there has been the stock market collapse and the economic collapse, things don't look good right now. But things are getting better," Bryan said.
The recommendations, if adopted by the legislature, could affect current retirees like Rick Anderson, who worries about losing his cost of living adjustment because he spend up to 25-percent of his income on health insurance.
"With the COLA being frozen for three years, will my health insurance be frozen for three years? I don't think so. After three years when we go on a totally different plan, is that going to be connected with my health insurance? I don't think so," Anderson said.
The 20-billion dollar PERS system currently covers more than 80-thousand retirees and 160-thousand active members.
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