Governor calls for reform of state retirement system - MSNewsNow.com - Jackson, MS

Governor calls for reform of state retirement system

Posted: Updated:
JACKSON, MS (Mississippi News Now) -

Governor Haley Barbour is calling for reform of the state's public employees retirement system.

The main issue isn't in the short term but rather the long term in making sure the system is sustainable.

Governor Barbour said currently the system is underfunded by about 40% and pays out more benefits than it's structurally set up for.

"We need to look at this system," said the governor.

He feels the state's public employees retirement system is on a path leading to concern.

Barbour said, "We do need to get a head of it and the legislature and the next governor need to look at it seriously before it does get to be a crisis or a problem that becomes unmanageable."

To avert a potential crisis, Governor Barbour is appointing a commission to look at improving the system known as PERS through it's financial management and investment structure.

Barbour said, "In the short term there's no issue, the question is as we get out years and years from now."

Right now, Barbour says, the system is only funded at about 60% of where it should be. That's combined with an increase in benefit payouts over the years but not much of an increase of payment into the system.

Currently, anyone in the system pays in 9% of their salary while taxpayers are responsible for 12%.

The state's retirement board proposed increasing the taxpayer amount to 18% over a four year period which would end up being about $350 million dollars a year.

Barbour says that would be unfair to taxpayers and even outlined in his 2012 budget recommendation the need to look at the system and make it more financially sustainable.

Barbour said, "It needs to just be a very serious study by people who are independent and don't have the vested interest."

With about 165,000 active members in the system and about 79,000 retirees, Barbour says the state needs to get ahead of the issue rather than wait for it to become one.

The governor also said, "It's critically important that the former state employees that are already PERS beneficiaries, but also the current employees and future employees are sure that they're going to have a system that they can rely on, that's going to be there for them."

Previous steps have already been made such as increasing the state's vesting period from 4 years to 8 years, but the question Barbour wants answered is will those steps be enough.

Copyright 2011 WLBT. All rights reserved.

@

@

@

 

Powered by WorldNow