The Mississippi Legislative PEER Committee has released its report titled 2019 Update on Financial Soundness of the Public Employees’ Retirement System.

MISS. CODE ANN. Section 25-11-101 (1972) requires the PEER Committee to make annual reports to the Legislature on the financial soundness of the Public Employees’ Retirement System.

Some of the Committee’s major findings include:

  • The PERS Board, in consultation with its actuaries, develops an actuarial model based on various assumptions.  Because of its most recent four-year experience study, ending June 30, 2018, the PERS Board adopted decreases in the plan’s price inflation and wage inflation assumptions and adopted amendments to components of the plan’s funding policy to install a method to reduce the plan’s investment return assumption to the rate most recently recommended by the plan’s actuary—i.e., 7.50%.

 

  • From FY 2009 through FY 2019, the ratio of active members to retired members decreased by approximately 36%, driven by an increasing number of retirees and a decreasing number of active members.

 

  • For FY 2019, PERS’s combined investment portfolio realized a return of approximately 6.87% while the market value of assets grew from approximately $28.1 to $28.6 billion, an increase of approximately $0.5 billion.  PERS investment performance for FY 2019 was below the current actuarial model’s target investment return of 7.75%, but was above the median return of 6.56% for its peer group. Additionally, PERS investment performance has exceeded its peer group median for each of the past three-, five-, and 10-year periods (ranking in the top 15% over each of these periods).

 

  • Under MISS. CODE ANN. Section 25-11-112(1) (1972), PERS retirees receive a 3% cost-of-living adjustment that automatically increases annually, either by a simple or compounding method depending on the person’s age and date of employment.  According to a national survey, 36 of 99 state-level pension plans like PERS provide some form of compounded cost-of-living adjustment to retirees.

The full report can be found here.

Release from the Mississippi Legislative PEER Committee.