Mississippi Today
PERS Board pondering changes to cost of living increases, other recommendations for Legislature
The board that governs the massive Public Employees Retirement System is working to develop recommendations for the Legislature to consider in 2024 in an effort to ensure the long-term financial viability of the pension plan.
PERS will provide or already is providing a pension to about 10% of the state’s population — people who worked or are working for local or state government entities.
For new hires, those legislative recommendations could include:
- No longer guaranteeing the annual 3% cost of living increase. Under a new system, the increase could be contingent on whether the system can afford to pay the cost of living increase any particular year and tied to the consumer price index, meaning it might be lower some years than the 3% increase.
- Creating a hybrid system where some of the benefits — a lower amount than under the current system — would be guaranteed while others would be provided through some type of investment portfolio.
- Lowering the amount of the benefits.
Such recommendations, which would have to be approved by the Legislature to be enacted, would not impact current employees. Instead, the changes would be for future employees. The Legislature would establish when the changes would go into effect for new hires.
Another recommendation could be a change to the payout method for the cost of living increase for both current and future employees.
Under the current system, many people take the annual 3% cost of living increase as one lump sum payment at the end of the year. PERS could recommend the increase be provided to retirees as part of their monthly retirement checks. Another option would be to make the “default” choice for retirees to receive the cost of living increase divvied up as part of their retirement checks. The employees would have to request specifically for the cost of living increase to be paid as a 13th check instead of monthly.
Changing the payout method from a lump sum to monthly one for the annual 3% cost of living increases would not result in less money for retirees. But it would give more flexibility since the system would not be taxed with paying the entire total at one time at the end of the year.
“These are recommendations and still a work in progress,” Ray Higgins, PERS executive director, said during a recent interview with Mississippi Today. “PERS is such a great system. It is important we work together to find solutions for generations to come.”
During an at times contentious 2023 session between legislative leaders and PERS, Higgins committed to providing recommendations to lawmakers on steps they could take to improve the financial viability of the system.
The contentiousness surfaced because before the 2023 session began, the PERS governing board voted by a 7-3 margin in December 2022 to increase the rate paid by state agencies, school districts and local governments from 17.4% of employees’ paycheck to 22.4%. The decision caused consternation with legislators and local governmental entities because of the additional cost of the rate increase.
The decision to increase the amount paid by governmental entities to support the pension program rests solely with the board and not with the Legislature or any other entity. But in the 2023 session, House leaders introduced a bill to strip some of the authority of the board that oversees the Mississippi Public Employees Retirement System.
After that bill was introduced, the board through Higgins committed to postponing the increase in the employer contribution rate and to introduce a long-term PERS fix for the Legislature to consider.
The PERS Board is working on those recommendations now and Higgins said he believes they will be finalized later this year before the 2024 session begins in January.
The effect of those recommendations, though, would be “long term in nature” and “does not alleviate the need for the increase in the employee contribution rate.”
As it stands now, that increase from 17.4% to 22.4% of an employee’s retirement check paid by the governmental entity is set to go into effect July 2024. The board’s original plan was to enact the increase in October of this year, meaning local government entities would be hit with an additional major expense during the midst of an election year.
The action of the board to increase the rate by 5% will cost state and local governmental entities, including school districts and public colleges and universities, $345 million annually, including $265 million for state agencies and education entities.
Higgins said the PERS Board of Directors could opt to phase in the that increase instead of enacting it all in July 2024.
The system’s current 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. Of course, all of the people in the system will not retire at once. Theoretically, though, it is recommended that retirement systems have a funding ratio of 80% or more.
The system has $30 billion in assets and is underfunded by about $20 billion.
Most state, city and county employees and public educators are in the system that currently has about 325,000 members, including current employees, retirees and others who used to work in the public sector but no longer do.
Employees in the system pay 9% of their salary toward their retirement. It was increased from 7.25% in the late 2000s. The average yearly benefit from the plan is $26,258.
Part of the issue causing the system financial woes is a decline in the number of governmental workers.
A study by the Mississippi Legislative Performance Evaluation and Expenditure Committee pointed out that between 2010 and 2020, the ratio of active employees to retired employees decreased about 33%, from 2.02 active to 1 retiree, to 1.35 to 1.
“As a result of the decrease, the payroll of fewer active members must fund future pension obligations, a factor made more important because contributions from active members and their employers comprise approximately 46% of PERS revenues” as of 2020, the report pointed out.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Did you miss our previous article…
https://www.biloxinewsevents.com/?p=256120
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.
-
News from the South - Arkansas News Feed6 days ago
Faith-inspired ministry opens health clinic in Little Rock
-
News from the South - Florida News Feed5 days ago
‘Dirty Dancing,’ ‘Beverly Hills Cop,’ ‘Up in Smoke’ among movies entering the National Film Registry
-
Our Mississippi Home5 days ago
The Meaning of the Redbird During the Holiday Season
-
Mississippi Today4 days ago
Mississippi PERS Board endorses plan decreasing pension benefits for new hires
-
Local News1 day ago
Hard Rock Hotel & Casino Biloxi Honors Veterans with Wreath-Laying Ceremony and Holiday Giving Initiative
-
News from the South - North Carolina News Feed1 day ago
Social Security benefits boosted for millions in bill headed to Biden’s desk • NC Newsline
-
News from the South - Missouri News Feed2 days ago
Could prime Albert Pujols fetch $1 billion in today's MLB free agency?
-
Mississippi Today6 days ago
On this day in 1976