State retirees can soon serve in legislature while drawing pension

By Steve Wilson
February 12, 2019

The state pension board ordered its staff to write a new regulation Tuesday that will remove a long-standing prohibition and allow legislators to draw both their salary and pension benefits.

The 10-member Board of Trustees for the Public Employees’ Retirement System of Mississippi voted on a motion to replace its existing regulation, which forbids legislators and other state elected officials who are PERS retirees from collecting both a salary and their retirement benefits.

The new regulation will go into effect on January 1, 2020, just in time for the next legislative session.

State Sen. Sollie Norwood (D-Jackson) asked Attorney General Jim Hood’s office for an opinion on sitting legislators receiving both a salary and their PERS retirement.

An AG’s opinion doesn’t carry the force of law, but can protect an agency from legal action if followed.

Hood’s opinion said that there was no basis in law for the prohibition by PERS regulations since most who serve in the legislature have a full-time job in addition to their legislative duties.

This prohibition doesn’t apply to local elected offices, such as mayor, alderman or county supervisor, who can receive both their retirement benefits and 25 percent of the retiree’s average compensation.

PERS Executive Director Ray Higgins said the new regulation would work similarly to those governing former retirees serving as elected officials with their local governments.

“Essentially, the AG’s opinion says we should apply those same parameters (with PERS retirees serving as local elected officials) in state law to those serving in the legislature,” Higgins said.

The opinion also said that PERS retirees who are elected to the legislature could be treated like those who return to the state workforce after retirement.

Under this opinion, a legislator who is a PERS retiree could receive pay on a half time/half pay scenario using the time and pay of a full-time position or receive 25 percent of what they were paid during their four highest years of service.

They would still have to contribute to PERS, but would receive no benefit from those contributions. Taxpayers would also have to contribute as the employer portion of each retiree serving in the legislature.

Higgins said that the agency would write a new regulation that would satisfy both the AG’s opinion and maintain the plan’s qualified status with the U.S. Internal Revenue Service.

Losing this status as a defined benefit plan means the plan’s investment income could be taxed and member contributions would cease to be pre-tax.

“It’s very important that we protect that qualified status and not do anything that could put us out of compliance with federal tax law,” Higgins said. “That’s very important to the system as well as our membership.”

There were several bills proposed in the Mississippi legislature that gave legislators the right to collect their retirement pay while serving at the Capitol, but all died in committee.


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