Mississippi Senate reintroduces $1 billion plan for pension system
Legislation that would allocate more than $1 billion over 10 years to Mississippi’s Public Employees’ Retirement System is back in consideration after being rejected by the House earlier this session. Sen. Daniel Sparks, a Republican from Belmont, revived six proposals related to the pension system by attaching them to House Bill 4073, which passed the Senate on Tuesday.
The proposed funding would begin with $500 million this July, followed by an additional $50 million annually for a decade. The plan also includes funding for cost-of-living increases for Tier 5 employees, though such adjustments require annual legislative approval, according to Sparks.
The pension system covers approximately 350,000 public employees and retirees, representing about 10% of Mississippi’s population. It faces about $26 billion in unfunded liabilities. Last year, lawmakers created a hybrid retirement plan for new hires that combines elements of defined contribution and defined benefit plans, aiming to address funding shortfalls. Critics argue that benefit reductions could hinder the state’s ability to attract and retain workers, many of whom earn about $50,000 annually.
Sparks emphasized that while he opposes some aspects of the newer tier, he supports the overall goal of meeting the system’s obligations. His revisions would reduce the years of service needed for full retirement from 35 to 30 for employees hired after March 1 and allocate $50 million for potential cost-of-living increases for Tier 5 workers.
The bill also seeks to clarify employer contributions toward unfunded liabilities, correct legal issues preventing catch-up contributions to Roth retirement plans, and allow retired employees to return to work at up to 80% of their salary while retaining benefits. Exclusions include elected officials and certain educational administrators.
House leaders declined to approve the bill last Friday, leaving negotiations ongoing. The House’s primary PERS proposals are part of a broader teacher pay raise plan, but Senate leaders have indicated they do not support that approach, putting the legislation at risk of expiration when the session ends on March 26.
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