The 2008 financial crisis hurt investments nationwide, but Mississippi’s pension plan has additionally been hurt by something less popular to mention: Legislation passed in 1999, which increased payouts to employees without providing a mechanism to cover those payouts.
Former Gov. Haley Barbour’s PERS Study Commission addressed this issue and others and offered suggestions (pages 4, 5 and 7 of pdf) to ensure the fund’s solvency.
What can we do about it?
State legislators will likely need to make some tough decisions to ensure the sustainability of PERS.
When asked how serious Mississippi’s PERS situation is, Barbour study commission member Bill Crawford told Bigger Pie:
“The system will not run out of cash any time soon, but if it starts paying out benefits with cash it’s supposed to be saving to pay future benefits, it starts to get into a bad fiscal situation.”
When asked what people should do, Crawford said:
“They should ask their legislators to be serious about making sure PERS is long-term viable. To set aside the politics and make sure it’s financially viable for the long term and let serious financial people look at it — not political people.”
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