Mississippi Today
Lawmakers ponder stripping state retirement system authority after board votes to raise rates
Lawmakers ponder stripping state retirement system authority after board votes to raise rates
After Public Employees Retirement System Board of Trustees voted to require an additional $345 million annually from state and local governmental entities to fund the pension plan for their current and former employees, lawmakers are considering changes to the system’s authority.
The PERS board voted in December to increase the employer contribution rate, which is paid by state governmental agencies, school districts, county and city governmental entities. The current government contribution is 17.4% of the employees’ paycheck. The board voted to increase the rate to 22.4%.
Ron Higgins, PERS executive director, said the increase is needed to ensure the system is properly funded long-term.
The increase means state agencies will have to provide an additional $265 million toward their employees’ retirement, and local governmental entities will have to provide the rest. If more money is not appropriated by the Legislature to pay for the increase, the state agencies, university and community colleges and local school districts will have to make cuts in other areas so they can meet the mandate of the PERS Board. Local governmental entities also are required to provide the funds for the increase. Under current law, the Legislature cannot prevent the employer increase from going into effect.
A bill is pending in the Legislature, though — House Bill 605 — that could be used to give the Legislature final authority over whether to enact such an increase. Legislators have expressed frustration this year with the PERS board’s decision to increase the employer contribution rate.
When asked if he planned to bring the bill up for consideration before the full chamber, House Appropriations Chair John Read, R-Gautier, said, “All I can say is the bill is on the calendar. It is out there. It might need some more research.”
During a recent meeting, Senate Appropriations Chair Briggs Hopson, R-Vicksburg, said he understands the need to ensure the pension plan is properly funded, but also expressed concern that the actions of the PERS Board have “a direct impact on the state agencies and programs and opportunities for other people to have jobs and salaries and not get laid off and have cuts in a number of areas.”
Higgins, the executive director of PERS, said, “We just have to make sure it is fiduciary (and) that the system is funded property.” Higgins said the board postponed recommendations of its financial experts to increase the rates in earlier years because of the impact it would have on state and local budgets.
But he said under state law, the only option the board has to correct any funding deficiencies is to increase the employer contribution rate. It would take the Legislature changing the law to allow the board to increase the employee contribution rate or to change the level of benefits. The Legislature has the authority to take such action.
Higgins said more than 300,000 people are members of the system, meaning they are current retirees receiving benefits or are eligible to receive benefits in future years because of their public service. He said the average retiree receives an annual benefit of $26,000.
The planned increase in the employer benefit, which is not slated to go into effect until October, comes on the heels of a year when the system lost more than 8% on its investments. The board postponed recommended increases in the employer contribution rate the past two years in part because of investment earnings of 32.71% in 2020.
But Higgins said the rate increase is not because of investment earnings for any one year. He said it is being enacted because of the long-term prognosis for the system.
The system’s current full-funding ratio is about 61%, meaning it has the assets to pay the benefits of 61% of all the people in the system, ranging from the newest hires to those already retired. It is recommended that a state retirement system has a funding ratio of about 80%.
Hopson pointed out that the Mississippi Public Employee Retirement System employer contribution rate and the rate paid by employees (9% of their paycheck) is among the highest in the country. Higgins agreed, saying the national rate for employees in similar plansis about 6% of their paychecks, and for employers about 15%. The employer rate in Mississippi is currently 17.4%.
Lawmakers questioned whether the board is hiring competent experts to oversee the system and to make investments.
Higgins responded the system’s investment earnings are comparable to those in other states.
But he said the system is stressed by the fact that additional benefits were added for employers in the late 1990s and early 2000s without a method to pay for those benefits.
In addition, the current governmental workforce is shrinking while the number of retirees in the system is growing. Higgins said during the past 10 years, the governmental workforce is down by about 10%, while the number of retirees has increased by more than 25%.
“Every time we take a public service at the state or local level that was performed by a PERS contributing employee and privatize and give it to a someone who is not contributing, that ratio gets more out of whack,” said Sen. David Blount, D-Jackson.
Higgins said the board could provide recommendations on how to reduce the cost to the system. In the past some legislators have talked about temporarily suspending or altering the annual automatic 3% cost of living increase. But outcry from retirees who represent about 10% of the state’s population has stymied those efforts.
Higgins said another option would be to change the benefits for new hires. While that would help long term, Higgins said it would not be an immediate fix.
Sen. Jason Barrett, R-Brookhaven, asked if the board had made any recommendations for the 2023 Legislature to consider. Higgins said it has not, but added it is his understanding that there is not an appetite to address the issue during an election year. But he said the board could provide recommendation.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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Mississippi Today
On this day in 1997
Dec. 22, 1997
The Mississippi Supreme Court upheld the conviction of white supremacist Byron De La Beckwith for the 1963 murder of Medgar Evers.
In the court’s 4–2 decision, Justice Mike Mills praised efforts “to squeeze justice out of the harm caused by a furtive explosion which erupted from dark bushes on a June night in Jackson, Mississippi.”
He wrote that Beckwith’s constitutional right to a speedy trial had not been denied. His “complicity with the Sovereignty Commission’s involvement in the prior trials contributed to the delay.”
The decision did more than ensure that Beckwith would stay behind bars. The conviction helped clear the way for other prosecutions of unpunished killings from the Civil Rights Era.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
Medicaid expansion tracker approaches $1 billion loss for Mississippi
About the time people ring in the new year next week, the digital tracker on Mississippi Today’s homepage tabulating the amount of money the state is losing by not expanding Medicaid will hit $1 billion.
The state has lost $1 billion not since the start of the quickly departing 2024 but since the beginning of the state’s fiscal year on July 1.
Some who oppose Medicaid expansion say the digital tracker is flawed.
During an October news conference, when state Auditor Shad White unveiled details of his $2 million study seeking ways to cut state government spending, he said he did not look at Medicaid expansion as a method to save money or grow state revenue.
“I think that (Mississippi Today) calculator is wrong,” White said. “… I don’t think that takes into account how many people are going to be moved off the federal health care exchange where their health care is paid for fully by the federal government and moved onto Medicaid.”
White is not the only Mississippi politician who has expressed concern that if Medicaid expansion were enacted, thousands of people would lose their insurance on the exchange and be forced to enroll in Medicaid for health care coverage.
Mississippi Today’s projections used for the tracker are based on studies conducted by the Institutions of Higher Learning University Research Center. Granted, there are a lot of variables in the study that are inexact. It is impossible to say, for example, how many people will get sick and need health care, thus increasing the cost of Medicaid expansion. But is reasonable that the projections of the University Research Center are in the ballpark of being accurate and close to other studies conducted by health care experts.
White and others are correct that Mississippi Today’s calculator does not take into account money flowing into the state for people covered on the health care exchange. But that money does not go to the state; it goes to insurance companies that, granted, use that money to reimburse Mississippians for providing health care. But at least a portion of the money goes to out-of-state insurance companies as profits.
Both Medicaid expansion and the health care exchange are part of the Affordable Care Act. Under Medicaid expansion people earning up to $20,120 annually can sign up for Medicaid and the federal government will pay the bulk of the cost. Mississippi is one of 10 states that have not opted into Medicaid expansion.
People making more than $14,580 annually can garner private insurance through the health insurance exchanges, and people below certain income levels can receive help from the federal government in paying for that coverage.
During the COVID-19 pandemic, legislation championed and signed into law by President Joe Biden significantly increased the federal subsidies provided to people receiving insurance on the exchange. Those increased subsidies led to many Mississippians — desperate for health care — turning to the exchange for help.
White, state Insurance Commissioner Mike Chaney, Gov. Tate Reeves and others have expressed concern that those people would lose their private health insurance and be forced to sign up for Medicaid if lawmakers vote to expand Medicaid.
They are correct.
But they do not mention that the enhanced benefits authored by the Biden administration are scheduled to expire in December 2025 unless they are reenacted by Congress. The incoming Donald Trump administration has given no indication it will continue the enhanced subsidies.
As a matter of fact, the Trump administration, led by billionaire Elon Musk, is looking for ways to cut federal spending.
Some have speculated that Medicaid expansion also could be on Musk’s chopping block.
That is possible. But remember congressional action is required to continue the enhanced subsidies. On the flip side, congressional action would most likely be required to end or cut Medicaid expansion.
Would the multiple U.S. senators and House members in the red states that have expanded Medicaid vote to end a program that is providing health care to thousands of their constituents?
If Congress does not continue Biden’s enhanced subsidies, the rates for Mississippians on the exchange will increase on average about $500 per year, according to a study by KFF, a national health advocacy nonprofit. If that occurs, it is likely that many of the 280,000 Mississippians on the exchange will drop their coverage.
The result will be that Mississippi’s rate of uninsured — already one of the highest in the nation – will rise further, putting additional pressure on hospitals and other providers who will be treating patients who have no ability to pay.
In the meantime, the Mississippi Today counter that tracks the amount of money Mississippi is losing by not expanding Medicaid keeps ticking up.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
On this day in 1911
Dec. 21, 1911
Josh Gibson, the Negro League’s “Home Run King,” was born in Buena Vista, Georgia.
When the family’s farm suffered, they moved to Pittsburgh, and Gibson tried baseball at age 16. He eventually played for a semi-pro team in Pittsburgh and became known for his towering home runs.
He was watching the Homestead Grays play on July 25, 1930, when the catcher injured his hand. Team members called for Gibson, sitting in the stands, to join them. He was such a talented catcher that base runners were more reluctant to steal. He hit the baseball so hard and so far (580 feet once at Yankee Stadium) that he became the second-highest paid player in the Negro Leagues behind Satchel Paige, with both of them entering the National Baseball Hame of Fame.
The Hall estimated that Gibson hit nearly 800 homers in his 17-year career and had a lifetime batting average of .359. Gibson was portrayed in the 1996 TV movie, “Soul of the Game,” by Mykelti Williamson. Blair Underwood played Jackie Robinson, Delroy Lindo portrayed Satchel Paige, and Harvey Williams played “Cat” Mays, the father of the legendary Willie Mays.
Gibson has now been honored with a statue outside the Washington Nationals’ ballpark.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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