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An analysis paid for by the Legislature reaffirms the position that the yearly cost of living adjustment — often referred to as the 13th check — that retirees in the state pension system receive cannot be reduced or taken away, Lt. Gov. Delbert Hosemann said.
Hosemann’s office refused to release the report provided by the Jones Walker Law Firm, saying it was the work product of an attorney-client relationship.
Instead, Hosemann released a statement saying, “I have never veered publicly or privately from our commitment to employee and retiree benefits. I do not and will not support removing or changing the cost of living adjustment for these individuals.
“Jones Walker law firm was hired to provide us with information about how the COLA operates in law when others were discussing freezing it. What we confirmed is exactly what we believe: the law protects the COLA in Mississippi for employees and retirees.”
Through the years there have been discussions about at least freezing the annual 3% cost of living adjustment that state retirees receive. Freezing the COLA has been viewed as a way to alleviate the financial stress that some maintain the system faces.
Many retirees opt to take the cost of living increase as a so-called 13th check in December instead of it being divided and added to their monthly retirement check.
According to the Transparency Mississippi web site, Ridgeland-based Jones Walker was hired by the Joint Legislative Budget Committee, which Hosemann chaired until July 1, to look at the COLA provided to the retirees in the state’s Public Employees Retirement System. Jones Walker was paid $8,500, according to the Transparency web site.
A letter from Jones Walker found on the state’s Transparency website outlines that the law firm “has been asked to advise you with regard for potential challenges in connection with a freeze or other adjustment to the COLA under PERS. Our engagement is limited to a review of and advise regarding this matter.”
PERS has about 360,000 members including current public employees and former employees and retirees. Those in the system include state employees, university and community college staff, local school district employees and city and county employees. While the system has assets of about $32 billion, there have been concerns about the financial viability of the system because of debt of about $25 billion.
READ MORE: Legislation to strip key power of PERS Board passes both chambers
Because of those concerns through the years, there has been talk of freezing or changing the COLA.
During an October meeting of the Joint Legislative Budget Committee, House Speaker Jason White, who is chairing the committee for the new fiscal year, asked PERS officials if they had looked at some type of reduction in the COLA. Senate President Pro Tem Dean Kirby asked similar questions.
Both said after the meeting they were not advocating for a reduction in the COLA, but trying to gather information.
Ray Higgins, the executive director of PERS, said his Board has looked into the COLA issue, but upon questioning, added, “But the prevailing and historical comment is you cannot make those changes.”
During various meetings in recent months, Hosemann has reiterated his commitment to maintaining the COLA.
In March on social media, he said, “To be very clear: I remain committed to protecting all of the retirement benefits of all of our retirees and our current employees. I also remain committed to shoring up the retirement system, which the executive director has now informed us is $25 billion underfunded.”
During the 2024 session, the Legislature pumped about $110 million into the system – far short of what some argued is needed to maintain its fiscal integrity. Legislation also was passed to strip a significant amount of the power of the PERS board and place that authority with the Legislature.
But the bill stripping that authority, also included language reaffirming a commitment to protect PERS benefits, such as the COLA.
The bill, in part reads, it “shall not be construed to provide authority to reduce or eliminate any earned benefits to be provided by the state” to members of the system.
The post Hosemann: Study confirms PERS ’13th check’ for Mississippi retirees protected appeared first on Mississippi Today.
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