Some might mistakenly believe that there is no way for the Legislature to deal with issues surrounding Mississippi’s behemoth public employee retirement program with the recent death of a key bill.
But people who follow the legislative process know the old saying that nothing is dead in that process until it is dead, dead, dead. And in reality, nothing is really dead until the Legislature adjourns sine die or until the time when the Legislature cannot come back into session until the next calendar year (or if the governor calls a special session).
Granted, the Senate Government Structure Committee killed a controversial House bill by not bringing it up for a vote on a key deadline day. But it could be revived.
That bill would have:
- Replaced the Mississippi Public Employees Retirement System Board of Trustees, most of whom are elected by the retirees and current public employees, with a board where most of the members would be appointed by the governor and lieutenant governor.
- Suspended the plan of the PERS Board to require governmental entities – state agencies, cities and counties, public schools and universities and community colleges – to contribute more toward the pension program.
Before the session began, Lt. Gov. Delbert Hosemann said PERS might be the most important issue facing the Legislature this session. What some saw as the only bill alive to deal with the problems facing PERS died in Hosemann’s Senate.
House Speaker Jason White, R-West, took the unusual step of quickly issuing a statement criticizing Hosemann for letting the bill die.
When Hosemann said PERS was the key issue facing the Legislature, he generally was referring to the need to address the potential financial woes facing the system. It is not too late to address those possible money woes, and the legislation to do so is very much alive.
The key is whether the House and the speaker will be amenable to dealing with those potential financial difficulties after the Senate killed the House bill.
To be sure, issues facing PERS are complex.
Those issues include:
- How much will the system earn from its massive investments?
- How many public employees will be employed by governmental entities in the coming years to pay into the system?
- And what is the life expectancy of members of the system?
While the issues are complex, the duty of the PERS Board is simple: ensure there is enough money to meet the financial obligation to current and future retirees.
Sen. Hob Bryan, D-Amory, colorfully points out there are two things he can do personally to ensure the financial sustainability of PERS: stay in office as long as possible contributing to the retirement system as all government employees and officials do, and die soon after leaving office so that he does not collect much in terms of retirement benefits. Bryan said he prefers the first option.
It is hard to overstate the importance of PERS. There are 360,000 people in the system – current employees, retirees and those who have worked previously in the public sector but who have not retired. Spouses and other dependents of PERS members also are impacted.
The PERS Board pays a lot of money to experts to assess all the relevant factors and make recommendations on the system’s financial viability. Senate Government Structure Chair Chris Johnson, R-Hattiesburg, points out that two years ago, based on the recommendation of those financial experts, PERS officials reported to the Legislature the system was on firm financial footing. Two years later, because of some changes, such as the assumption that in the coming years the system will not earn as much in the stock market, the board made the decision, based on the recommendation of the experts, to increase the amount contributed to the retirement system by governmental entities.
Some believe the board might have overreacted. But remember, it is complicated.
At any rate, the planned increase in the employer contribution rate created a near panic among many governmental leaders, especially those on the local level who said they would have to cut services or raise taxes to contribute more to the retirement system. The House responded by voting to dissolve the board.
At the heart of the issue facing PERS is some believe the system needs an infusion of cash – hence the call to increase the employer contribution rate.
The Legislature could address that issue with a cash infusion at the end of the session during the normal appropriations process instead of requiring local governments and other entities to provide additional revenue to PERS. The bill to do that is not dead.
The key might be whether House leaders will be willing to agree to that cash infusion.
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