The executive director of the Public Employees’ Retirement System told lawmakers in May that PERS needs additional funding more in line with actuarial recommendations, according to a new report from the Joint Legislative Committee on Performance Evaluation and Expenditure Review.
Ray Higgins told the PEER committee that the actuary recommended an actuarially determined contribution of 25.98% of payroll for fiscal 2025, a figure the PERS board urged the Legislature to adopt. “Any assistance you all can provide in reiterating the importance of significant and/or recurring funding for PERS with your committee would be greatly appreciated,” Higgins said, according to the report.
The Legislature instead set the employer contribution rate at 18.40% for fiscal 2026 and ordered a 0.5 percentage-point increase phased in over five years, bringing the rate to 19.90% in fiscal 2029. The employee contribution rate is 9%, the PEER report said.
PEER and PERS data cited in the report show nearly $26 billion in unfunded liabilities and a falling ratio of active to retiree members. PEER reported the ratio declined from 1.52-to-1 in fiscal 2016 to 1.20-to-1 in fiscal 2025, a drop of about 21%, and noted that contributions from active members and their employers account for roughly 37% of PERS revenues.
PEER said employer groups such as counties, municipalities and school districts have raised concerns about the effects of higher employer rates. “If funding increases become necessary in the future, decisions will have to be made on what employers will bear these costs increases,” the report said, and recommended the Legislature could consider appropriations to reduce pressure on employer contributions. PEER also said recent changes, including a new Tier Five, show actuarial projections that could reduce liabilities if actuarial assumptions are met. The report found two of the plan’s sustainability metrics at a red signal-light status and one at yellow, and said the plan’s projected funding level rose to 63.7% for the year ended June 30, 2025, up from 53.7% the prior year.
Jon Ross Myers is the executive editor and publisher of the Mississippi News Network, Mississippi's largest digital only media company. He can be reached at editor@tippahnews.com
