HB 605 would have given the Legislature more autonomy over when, if, and how much rates could be increased for employer contributions.
State Representative Charles Busby (R) took to Facebook on Wednesday to announce a bill that could change the timeline to implement a new employer contribution rate for the Public Employment Retirement System (PERS) will not move forward this year.
Busby, who is also running for Southern District Transportation Commissioner, indicated that an agreement had been made with the PERS Board for a compromise in lieu of HB 605. Instead of action this year, the contribution increase will be delayed until July 1, 2024.
“I am pleased to inform you that we have worked with the PERS board to reach a solution that is in the best interest of all Mississippian’s. HB-605 will not be passed out and the employer’s contribution increase will be delayed until July 1, 2024,” Rep. Busby, the bill’s author, wrote on Facebook. “In the interim we will continue to work with the PERS board to find alternate plans that protect the benefits of our valued employees and retirees while lessening the burden on our counties, cities and school districts. I appreciate very much all of your input.”
The legislation would have prevented the employee’s contribution rate from increasing above the January 1, 2023, rate unless authorized by the Legislature prior to July 2024. Because PERS is a state retirement system, an employer contribution is funded by taxpayer dollars.
The PERS board has recently expressed concerns regarding cash flow. The 10-member board voted in December to increase that taxpayer contribution from 17.4 percent to 22.4 percent which comes to a roughly $345 million increase. In hearings with the state Senate during the 2023 session, Executive Director of PERS Ray Higgins recommended finding a modified revenue stream.
Three board members were against the rate increase from the start – State Treasurer David McRae, Commissioner of the Department of Revenue Chris Graham, and retiree representative and former Insurance Commissioner George Dale.
HB 605 would have given the Legislature more autonomy over when, if, and how much rates could be increased for employer contributions, a role typically reserved for PERS.
A letter, written by Higgins to Speaker of the House Philip Gunn, outlined the terms of agreement Busby alluded to in his social media post.
“I plan to recommend to the PERS Board that the effective date of the previously approved employer contribution rate increase be moved from October 1, 2023 to July 1, 2024,” Higgins told Gunn.
Higgins indicated that he expected that the board would vote favorably, during the February meeting. This would will allow for additional planning and “acting in the best interest of the membership to ensure the plan is properly funded long term.” He added that they will discuss the potential option of phasing out the rate increase altogether.
Higgins said PERS is currently working to develop a Tier 5 for new employees and plans to provide an update at the February meeting.
The letter from Higgins is shown in the image below.
Sarah Ulmer
