Is PERS solvent? - USM Forum -- Message Board

Date: Jun 25, 2005

Is PERS solvent?

Date: Jun 25, 2005

qwerty wrote:

The SunHerald has a story on how the WVa. state pension is basically broke. What about Mississippi's plan? Does anyone know about this? Here's the story: http://www.sunherald.com/mld/sunherald/11986803.htm

My understanding is PERS is one of the nation's strongest state retirement systems. Mississippi may be 50th in a lot of things, but not this.

Date: Jun 25, 2005

qwerty wrote:

The SunHerald has a story on how the WVa. state pension is basically broke. What about Mississippi's plan? Does anyone know about this?

I am the happy recipient of 12 monthly checks per year from PERS, plus another check (called the "13th check") at the end of each year. PERS provides regular communication to its members. PERS retirees recently received a brochure which probably provides some of the information you seek, but I can't put my hands on it at the moment. I am also a TIAA/CREF participant and I regularly compare them. I am very pleased with PERS, but I do not make financial projections, interpretations or suggestions. In the past I have been under the impression that PERS is one of the healthiest public retirement systems in the nation, but you'll have to make that judgment for yourself. I guess PERS retirees will have a better idea of the health of PERS when the time comes for them to issue the 13th check.You might want to take a look at the PERS website, and particularly the section called FINANCIAL that is accessible at the upper right of their website.

Public Employees' Retirement System of Mississippi Home Page

Date: Jun 25, 2005

Googler wrote:

qwerty wrote: The SunHerald has a story on how the WVa. state pension is basically broke. What about Mississippi's plan? Does anyone know about this? Here's the story: http://www.sunherald.com/mld/sunherald/11986803.htm My understanding is PERS is one of the nation's strongest state retirement systems. Mississippi may be 50th in a lot of things, but not this.

one advantage of paying out lousy benefits is you get cash in reserve to let the administrators brag and have fun

Date: Jun 26, 2005

PERS is solvent now but I believe that in the last legislative session the legislature considered stopping to allow PERS members to count unused sick leave toward retirement years and they also considered stopping PERS members from purhasing years from other states to count toward the total required 25 years of retirement. Very few states allow retirees to retire as early as Mississippi does. I fear that the excellent PERS benefits may be under attack in upcoming sessions of the legislature.

Date: Jun 26, 2005

ha wrote:
one advantage of paying out lousy benefits is you get cash in reserve to let the administrators brag and have fun

Your statement makes no sense. PERS retirement benefits are among the best in the nation. The fund is well managed. As Googler suggested, this is one area where Mississippi does not rank at the bottom. How does the PERS system "let the administrators brag and have fun?"

Date: Jun 26, 2005

PERS Beneficiary wrote:

PERS is solvent now but I believe that in the last legislative session the legislature considered stopping to allow PERS members to count unused sick leave toward retirement years and they also considered stopping PERS members from purhasing years from other states to count toward the total required 25 years of retirement. Very few states allow retirees to retire as early as Mississippi does. I fear that the excellent PERS benefits may be under attack in upcoming sessions of the legislature.

Would any such changes affect people currently enrolled or only those who enroll after the changes are enacted?

Date: Jun 26, 2005

Just curious wrote:

PERS Beneficiary wrote: PERS is solvent now but I believe that in the last legislative session the legislature considered stopping to allow PERS members to count unused sick leave toward retirement years

My old back injury just started to feel much worse. I could use a couple of semesters off to catch up on research. Just kidding, but this would be a real slap in the face for both staff and faculty members who have come to work on the bad days we all have and have avoided taking "sick" days to catch up on personal issues so that the students could get taught and the work of the university could get done. A part of this bargain has always been that there would be a small future reward for doing so. In the private sector, the use it or lose it rule leads to a different set of choices.

If the legislature wants to fool with this, so be it. They should understand that this choice will have some consequences for the provision of services in the public sector. Imagine life at USM if ever employee took every eligible sick day every year. If some of our staff members judiciously timed those days, preview for instance, all hell would break loose.

We won't even think about some of our fellow state workers that protect our lives and property and have been hit for years with the same sort of budget cuts we're all laboring under.

Date: Jun 26, 2005

The biggest "real" threat to PERS solvency would come if the Legislature manages to pass some law allowing them to "borrow" PERS funds to make up general fund deficits. They've tried this in the past. Watch for such a move next year (perhaps spearheaded by Haley) if tax revenues don't go up.

Date: Jun 26, 2005

Muddle Head wrote:

How does the PERS system "let the administrators brag and have fun?"

As an administrator, I'll tell you: The average of my "highest four" is going to be quite a bit more than the average faculty member's.

Of course, I sold my soul to get them-there "big bucks"

Date: Jun 26, 2005

Invictus wrote:

The biggest "real" threat to PERS solvency would come if the Legislature manages to pass some law allowing them to "borrow" PERS funds to make up general fund deficits. They've tried this in the past. Watch for such a move next year (perhaps spearheaded by Haley) if tax revenues don't go up.

That's if we're lucky. An even worse possiblility would be the use of PERS funds for economic development boondoggles like "Momentum Mississippi". You could see your retirement contributions invested in auto plants, beef processing plants, and steel mills. Hey, one out of three ain't bad.

I wish I was making this up, but I'm not. It's all about "economic development" ya' see.

Date: Jun 26, 2005

fiduciary responsibility wrote:

That's if we're lucky. An even worse possiblility would be the use of PERS funds for economic development boondoggles like "Momentum Mississippi". You could see your retirement contributions invested in auto plants, beef processing plants, and steel mills. Hey, one out of three ain't bad.
I wish I was making this up, but I'm not. It's all about "economic development" ya' see.

That would still require an act of the Legislature, since PERS money is protected by law right now. IIRC, the type of investments that are permissible for PERS do not extend to economical developmentation stuff.

Of course, PERS lost a pile of bucks investing in WorldCom, but at the time it looked like a good investment in a "proven" Mississippi corporation... <SIGH>

AFAIK, PERS money didn't go to buy any defective cows.

Date: Jun 26, 2005

Invictus,

You are right, for now. Some tinkering with who is managing the money (can't talk about that one) coupled with official listings of economic development projects (a low bar) and bingo you have PERS money flowing. I hope this is unlikely, but it is not fantasy. In the mid 1980s a vicious little battle was fought to keep PERS from buying municipal bonds issued by local governments in the state. PERS owned a lot of this stuff and it was a fight to "dump" these questionable investments for a pension fund. The current financial health of PERS is related to some unsung people who fought that battle and won plus the luck of getting into stocks at almost exactly the right time.

I'll admit to a little paranoia on this. However, I'll never forget how far my jaw dropped when I learned that PERS owned local municipal bonds.