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PERS Board Hearing: What We Learned

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Last week, the Senate Government Structure committee held a public hearing on House Bill 1590 which aligns Mississippi’s retirement board structure with national models and prevents the rate hike approved by the current board to increase by hundreds of millions of dollars what taxpayers contribute to the plan known as PERS (Public Employees’ Retirement System).

There were no fights or heated exchanges – just an open dialogue about PERS governance and how members view their roles, as well as opening comments from the current president of the Mississippi Municipal League, Hattiesburg Mayor Toby Barker.

Representing 290 member cities, towns, and villages, Mayor Barker told the committee that his organization is significantly represented in PERS (at 30 percent of total employers) and feels a “responsibility to voice concern when we see an unsustainable trend of shifting the burden of paying for PERS to employers, particularly cities, towns, counties, and school districts.”  Mayor Barker said that it’s “no secret the unfunded liability in PERS is a problem, and it’s a storm that’s been brewing for some time.”

He explained that the current PERS Board recently voted to phase in a five-point increase in what cities, towns, and villages pay to fund the system – an effective increase of 28 percent in retirement costs on local budgets.  “My encouragement first is to please call your mayor, your county supervisor, or school superintendent” to ask both how much it will cost to pay for the PERS Board rate hike and how they’ll pay for it.

Mayor Barker offered a few scenarios: “Raising property taxes? Yes, and probably multiple times. Cutting services and employees? Absolutely. Raises for city and state employees, including first responders at the local level? Doubtful at best.”

One of the critiques of the current PERS Board member structure is the lack of taxpayer representation.  The current board is made up of ten members, with just two members accountable to taxpayers.  How does this impact the governing mindset of the board?  Here’s what PERS Board members told the Senate Government Structure committee.

Jay Smith was the first PERS Board member to speak.  He’s the K-12 and community college representative on the board and works as superintendent of the North Pike School District.

Smith told committee members he considered a series of questions before casting a vote as a pension board member: Will his vote positively impact the employees who elected him to the board?  Will his vote positively impact current employees when they get to retirement age?  Will his vote positively impact future government employees, like those who will become teachers?  Then, Smith “casts my vote accordingly.”

Smith told the committee he does not consider costs to his school district (an estimated annual cost of $750,000) nor did he mention consideration of the impact on taxpayers.  “My role and responsibility as a board member is to try to ensure that the funding is in place for the plan. My role as a superintendent in trying to find the [money for

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