Sparks, Senate attempt to revive chambers’ PERS reforms

• From lowering the years of service to setting aside funds for a COLA for the new Tier 5, the Mississippi Senate continues the push for its preferred PERS changes.

The Mississippi Senate passed a strike-all amendment earlier this week to a House bill in an effort to revive its reforms to the Public Employees Retirement System, or PERS.

The Senate amendment places language from its six bills that have died this session into a House bill as the chamber again seeks to address changes in PERS.

“Those bills didn’t make it, so we’re back here,” said State Senator Daniel Sparks (R).

The amended bill would lower the years of service in the new Tier 5 established last year from 35 years to 30 years. First responders had requested a reduction to 25 years, which was in the House version of the bill, but the Senate is seeking the middle ground. One longtime senator said 25 years of service is unrealistic.

State Senator Hob Bryan (D) told members that the 25 years has been tried and proven not to be sustainable.

“The 25-year retirement was terribly unfortunate, could never be sustained,” Bryan said, noting that retirement was originally intended to support people in their 60s, 70s, and 80s from living in poverty.

PERS is facing a $26 billion unfunded liability.

However, House Democrats believe serving 25 years as a public employee could be sustainable if more there were more state employees paying into the system.

“Serving 25 years would get more people’s attention and help with recruitment and retention,” said State Rep. Robert Johnson (D), the House Minority Leader.

Senator Sparks’ response to the House Democrats’ notion was succinct.

“That’s a Ponzi scheme,” Sparks said, adding that it goes against the goal of stabilizing the system.

In an interview earlier this week, Senator Sparks noted that the two main questions when trying to solve PERS were, “Who is going to pay for it, and what’s it going to cost?”

The Senate amendment added the previously proposed $500 million transfer from the Capital Expense Fund to the PERS account while also reviving the provision to add $5 million per year over 10 years for future cost-of-living adjustments (COLA) for new state employees hired after March of this year under the new Tier 5. Both measures passed the Senate earlier this session.

Under the new Tier 5, a COLA is not guaranteed for incoming state employees. Sparks said in January when presenting the initial bill on this provision that each year the Legislature would determine if a COLA was possible by examining funding and the Consumer Price Index.

“We feel this bill would show once again that the Senate is taking the position that we’re in the process of stabilizing the PERS system,” the senator said at the time.

The amendment would also allow retired state employees to return to work with up to 80% of their pay, with three exceptions, said Sparks: elected officials, college and university administrators, and K-12 school systems superintendents. Sparks said the return to work provision could allow the state to reduce the number of contractors on Mississippi’s payroll while returning valuable institutional knowledge that is lost when a longtime employee retires.

Another provision in the amendment would lower the “sit-out time” for retired state employees to return to work from 90 days to 30 days.

Finally, at the request of the PERS Board, the amendment would “clear up” Mississippi law concerning the Roth Catch Up provision, which allows persons age 50 and over to save beyond standard IRS limits. Several employees, he said, would like to contribute more to their retirement account as their end-of-service date approaches.

Sparks praised his fellow Senators for sticking with him as the chamber deliberates the changes to PERS.

“This hasn’t been a comfortable experience, and it will continue to be an uncomfortable experience,” Sparks said. “We are making uncomfortable decisions.”

The House proposals to reform PERS have died in the Senate this session. Among the chamber’s proposals was the implementation of mobile sports betting. The House sought to use the tax revenue generated from the enterprise as a dedicated revenue stream to shore up PERS. That measure died in the Senate Gaming Committee.

Whether the House and Senate can reach an agreement on the reforms to PERS this session remains to be seen as the session winds down.