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Senate kills bill that would have taken PERS board from elected to appointed

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One of the most controversial bills of this legislative session died on Tuesday after the Senate decided not to move forward with the House’s initial plan for the public employees’ retirement system (PERS).

House Bill 1590 would have restructured the 10-member board in charge of the government pension – which is currently made up  of the State Treasurer, the commissioner of revenue plus eight PERS participant members, both retirees and active employees, elected by PERS members.

Under the new structure proposed in HB 1590, the board would increase to 11 members, with four appointed by the governor, three by the lieutenant governor, one state employee elected by all current state employees, and one retiree elected by all PERS retirees. The commissioner of revenue and state treasurer would remain as board members.

On top of transitioning the board from a mostly elected structure to a mostly appointed body the bill aimed to block the enactment of a 2% increase in the amount governmental bodies contribute to the retirement system, previously authorized by the current PERS board in December 2022. Originally the increase was scheduled to go into effect October 1, 2023. The board delayed it until July 1, 2024. Now that the bill has died, it’s unclear if the board will either rescind or delay the increase. Many local leaders have expressed concerns about how they would cover the additional expense.

Sen. Chris Johnson, a Republican from Hattiesburg in charge of the Senate Government Structure Committee, told his peers that a board overhaul is not the solution to the looming PERS issue. Rather, he believes any issues within the board can be fixed with more sunlight.

“I believe the correct course of action right now is to not bring up House Bill 1590 for a vote,” Johnson said. “I would encourage the board to be transparent. Do live webcasts like we do. Not only for their board meetings but for their working groups, so that everyone can see the dialogue that they have and better understand what goes into their decision making.”

House Speaker Jason White, who has led the charge on a handful of avant-garde bills for a state such as Mississippi (e.g., Medicaid expansion, rewriting the current education formula) only to be stopped by the Senate, was not pleased with his cross-chamber counterparts’ decision to shut down the PERS legislation.

“I am disappointed to learn of the Mississippi Senate’s inaction on HB 1590, the PERS bill which in no way changed or modified retiree benefits but restructured the board and rescinded the scheduled employer’s contribution increase,” White said in a statement, once again clarifying that the legislation would not affect the current benefits governmental employees are receiving – a massive fear among those 25,000 some odd people who work for the state.

The Republican speaker went on to blame Hosemann directly, saying time is of the essence when it comes to fixing PERS and the Senate not moving forward with the bill was “irresponsible.”

“Refusing to address the employer’s contribution increase, as recently enacted by the PERS board, will have serious ramifications for our state, our city, and county governments, and school districts, potentially resulting in historical tax increases by cities and counties,” White said. “Over the next three years, and the foreseeable future if no action is taken, the proposed 5-10% increase requested to fund PERS will also have the effect of limiting government services and eliminating state and local government employees.

“The Lt. Governor and Senate’s failure to address the long-term sustainability of our state’s retirement program is irresponsible to not only PERS retirees and participants in the system but Mississippi taxpayers.”

In a statement also released Tuesday afternoon, Hosemann acknowledged that balancing the PERS budget, which he previously told us is a $25 billion issue, is still a priority for the Senate; they just did not feel this bill was the answer.

“The PERS system’s long-term viability continues to be a serious concern,” Hosemann said. “The Senate and the House need to work together to find a solution. Transparency and trust, from both the legislature and retirees and employees, will be critical for us to move forward. The Senate is committed to protecting retiree and current employee benefits while balancing the budget.”

As of now, Johnson has assured those in the Capitol that PERS is sound for the time being. The agency recently confirmed that 30 years from now, if a fix is not decided on by lawmakers, the system would be dangerously underfunded. PERS projects that the system’s funding ratio will plummet to 35% by 2047, putting the program’s ability to meet its obligations to pay earned retirement benefits at risk.

Gerard Gibert contributed to this report. 

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