PERS Commission Recommends Cuts | Jackson Free Press | Jackson, MS

PERS Commission Recommends Cuts


Gov. Haley Barbour's PERS Study Commission calls for changes to public employees' retirement benefits.

After a four-month wait and much speculation, a commission studying the Public Employees Retirement System has recommended freezing the cost-of-living adjustment paid to retirees for three years.

Gov. Haley Barbour appointed the 12-member commission in August to make recommendations for PERS' improvement. Much of the controversy surrounding the commission has stemmed from concern that the commission might recommend changes to the so-called "13th check," or cost-of-living adjustments for retirees.

The 13th check is money state retirees get every year to account for the rising cost of living, though Gulfport Mayor George Schloegel, who chaired the committee, said right now the cost-of-living adjustment that retirees get each year is much higher than the actual rate of inflation.

The commission recommended freezing cost-of-living adjustments for three years, and tying any future adjustment to the Consumer Price Index with a three-percent cap. If the Legislature were to adopt the commission's recommendations, new retirees would not receive a cost-of-living adjustment for the first three years after they retire.

The commission is calling for the Legislature and the PERS board to make other changes to the system, such as lowering the amount they expect to get back on their investments from 8 percent to 7.5 percent.

Schloegel said several years ago the Legislature passed a bill to raise benefits through PERS without providing funding. That, combined with the recent stock market decline created the "perfect storm" for PERS.

"In the short term, PERS can pay its benefits," he said. "However, unless the Legislature takes action, the long-term sustainability and affordability of PERS is at serious risk."

Rick Anderson, a local artist and retired teacher, shook his head as Schloegel and Barbour detailed the changes the commission wants to make. He said he went to almost all the commission meetings and doesn't like what he has heard.

Anderson said the commission should have had more public employees, such as retired teachers like him, that would feel the impact of cuts.

"What angers me about that study committee is they met, they had an agenda; when they leave, they're done," he said. "Nothing that they do or propose or suggest will have any impact or influence on them whatsoever. They're gone."

Barbour sees the PERS issue from a different perspective, and said public employees and retirees should be concerned that the system is not sustainable.

"I think that the public, I think the employees, I think the retirees ought to be beating on the door of the Legislature, saying we cannot accept this," he said. "It's not fair to the younger retirees, much less the current employees, to have a system that we know is in this bad of shape."

Anderson said his insurance costs will continue to go up whether his cost-of-living adjustment does or not, and he thinks teachers and public employees might leave the state and look for a better deal elsewhere.

Any changes, though, would have to be approved by the Legislature. In past discussions about the study commission, legislators have proven reluctant to take such an unpopular step as reducing the 13th check.

"Charlton Heston said it would be very hard to get the gun out of his hand unless he was dead," Rep. Diane Peranich, D-Pass Christian, said in September. "That's how it'll be if they come after state retirement."

The commission has recommended a one-year study period and fiscal analysis before modifying PERS, and Schloegel said it will be difficult for the Legislature to make changes to the system.

"There's a lot of hype out there because people are so scared," he said. "It's going to be real difficult to calm the masses down so the Legislature can give it a real objective look, but I hope they're able to (overcome) that."

Schloegel said he hopes now that the report is out, people will be reassured that the commission does not have the authority to make any changes, and that legislators will "do what's right for the future."

"The fund is not in any danger currently, for those people who are retired, but if we don't make some changes it will be, in 10 years, in bad shape," he said.

Read the full report online at

Previous Comments


Is this really a surprise? Did we really think they were going to come back with anything positive to say about the program? The objective was clear from the start.


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