Lawmakers agree on PERS Tier 5 changes

• The years of service requirement is being reduced from 35 years to 30 years, among other revisions to the new Tier 5.

Lawmakers agreed on a conference report Sunday that changes the service requirement from 35 years to 30 years under the new Tier 5 in Mississippi’s state employee retirement system.

Tier 5 was passed during the 2025 session and became effective on March 1 of this year. The move was made to help the state address PERS’ $26 billion unfunded liability. It has since drawn critics over the past year, particularly from the law enforcement community. 

Under the conference report on HB 4073, lawmakers also agreed to change how the retirement amount is calculated. Tier 5 will return to using an employee’s highest four years of salary instead of the highest eight years as adopted last year.

Additionally, retirees will be able to return to state employment after a 30 day hiatus. This provision is intended to fill gaps in agencies as well as at the school district level struggling to fill vacant teaching positions. 

State Senator Daniel Sparks (R) told the Senate that the measure is employer-friendly.

State Rep. Trey Lamar (R) told the House the provision applies to nearly all state employees but does not apply to certain positions such as school superintendents.

Senator Sparks said the first responder community was receptive to the bill’s hire-back section.

“What I hope this bill does is that we get empty pens for which we get a PERS contribution,” Sparks said. “We get experience back, we get institutional knowledge back, and I do believe this is an opportunity to cut back on contract labor which circumvents the PERS program.”

The agreement also allows state employees to voluntarily contribute to a Roth IRA or other after-tax retirement plans. The provision revised a state law that did not allow catch-up plans.

“This bill contains language the Senate has passed on two different occasions,” said Senator Sparks, the chamber’s point person on PERS.

After the vote, Sparks told Magnolia Tribune the bill “is everything we’ve done,” adding that the changes will not bankrupt the state.

The House passed the conference report off the floor by a vote of 120-0 while the Senate adopted it with one vote in opposition, that being State Senator Hob Bryan (D).