Some mayors raising a red flag about possible changes to PERS
JACKSON, Miss. (WLBT) - More changes are being discussed to the state employee retirement system.
The impact could go beyond current workers and retirees. Some can have a domino effect on all Mississippi taxpayers.
The PERS board works to make sure the state can uphold its end of the deal on benefits for workers who’ve retired or plan to do so. But those adjustments could have everyone paying more attention to what happens with the system.
Hattiesburg Mayor Toby Barker made this note.
“We believe that burdens can be passed on to us and our taxpayers,” said Mayor Toby Barker.
Cities and counties were already on high alert after the board said employer contributions were being raised from 17.4% to 22.4%. They voted Tuesday to phase that in. But they also had another vote that caught the attention of many.
“The board voted to reduce the assumed rate of return down to 7%,” explained PERS Executive Director Ray Higgins. “It is the rate at which your investments are assumed to grow long term.”
If it all sounds too technical to you, think of it this way... the lower the assumed rate of return, the higher the contributions need to be in order to pay for the benefits promised to retirees.
“At the moment based on what the change in the assumed rate of return the estimated employer rate if you recalculated things would be approximately 27%,” described Higgins.
That’s 10% more than what’s currently being paid and it’s sparking the latest worry.
“Our concern is this being passed to the local level and people getting hit, possibly up to three times by their city, your county, and their school districts having to raise taxes to cover this extra PERS tab,” added Barker.
If upped to 27%, that would amount to $2.8 million in Hattiesburg each year and $2.4 million in Oxford.
“It will require us to either decrease services or increase taxes,” said Oxford Mayor Robyn Tannehill.
Mayor Robyn Tannehill is hoping the conversations will include local leaders before any additional increase is adopted.
“The PERS board never discussed what these increases look like where the rubber meets the road,” she said. “And that is what is very concerning to me.”
Both mayors note that they believe more discussion should be had about how to share the sacrifice, whether that be money from the legislature or changes to benefits for future employees. So, whether you’re paying into PERS or not, it’s a conversation you’ll want to watch.
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