Report: MS Public Employee Retirement System won't reach current funding goals

Report: MS Public Employee Retirement System won't reach current funding goals

JACKSON, MS (WLOX) - A new study of the Mississippi Public Employee Retirement System shows the state will not reach its minimum goal of being 80 percent funded by 2042. In fact, as of June 2017, the PERS funding ratio was sitting at 61.1 percent. And that's an increase over 2016, when the funding ratio was just 60 percent.

The report released Tuesday by the Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER Committee) is titled 2017 Update on Financial Soundness of the Public Employees' Retirement System. A PDF of the entire report can be found at the end of this article, or you can find it online here:

According to the PEER Report, the latest projects show the Public Employee Retirement System's funding ratio is more likely to be around 70.1 percent by 2042. To fix this, the PEER Committee offers several suggestions including:

  • The PERS Board could request additional employer contributions.
  • The PERS Board could make adjustments to the funding policy.
  • The PERS Board could maintain the current employer contribution rate and funding policy.
  • Ask the Legislature to make adjustments to the plan.
  • Ask the Legislature to change the plan for new members.

The ratio of active employees paying into the system and retirees drawing from the system is also changing. There are now 1.42 active employees for every one retiree. Ten years ago, that ratio was 2.22 to one. Although that might sound alarming at first, the report says that's better than the national average when compared to other pension plans across the United States.

The bad news is PERS active membership has continued to decline, whereas the national average plan's membership has grown over the past two fiscal years.

Some of the committee's other major findings include:

The PERS Board adopted a decrease of 0.50% to the wage inflation assumption for the PERS plan, reducing it from 3.75 percent to 3.25 percent.

For fiscal year 2017, the PERS plan's combined investment portfolio experienced a return of 14.96 percent, and the market value of the system's assets was approximately $26.9 billion.
PERS paid $95.6 million to investment managers during fiscal year 2017, which represents a combined investment expense rate of 0.36 percent of the PERS plan's total assets (the expense rate for fiscal year 2016 was 0.36 percent also).

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