Hosemann: Study confirms PERS ’13th check’ for protected Mississippi retirees

An analysis paid for by the Legislature reaffirms the position that the annual cost-of-living adjustment—often referred to as the 13^th check – that pensioners in the state pension system cannot be reduced or removed, Lt. Govt. Delbert Hosemann said.

Hosemann’s office declined to release the report provided by the Jones Walker Law Firm, saying it was the work product of an attorney-client relationship.

Instead, Hosemann issued a statement saying, “I have never publicly or privately deviated from our commitment to employee and retiree benefits. I do not support and will not support the removal or modification of cost-of-care adjustments. livelihood for these individuals.

“The law firm Jones Walker was hired to provide us with information on how COLA operates in law when others were discussing freezing it. What we confirmed is exactly what we believe: the law protects COLA in Mississippi for employees and retirees.”

Over the years there have been discussions about at least freezing the 3% annual cost of living adjustment that state pensioners receive. The COLA freeze has been seen as a way to ease the financial stress facing the system.

Many retirees choose to take the cost of living increase as a so-called 13^th check in December instead of being split and added to their monthly pension check.

READ MORE: The PERS board is considering changes to cost-of-living increases, other recommendations to the Legislature

According to Transparency Mississippi’s website, Ridgeland-based Jones Walker was hired by the Joint Legislative Budget Committee, which Hosemann chaired until July 1, to look at the COLA offered to retirees in the Retirement System of public employees of the state. Jones Walker was paid $8,500, according to Transparency’s website.

A letter from Jones Walker found on the state’s Transparency website describes the law firm “has been asked to advise you regarding potential challenges related to a freeze or other COLA adjustments under PERS. Our commitment is limited to a review and advisory regarding this matter.”

PERS has approximately 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 sustainability of the system due to debt of about $25 billion.

READ MORE: Legislation to strip key PERS Board power passes both chambers

Because of these concerns over the years, there has been talk of freezing or changing the COLA.

During an October meeting of the Legislative Joint Budget Committee, House Speaker Jason White, who is chairing the committee for the new fiscal year, asked PERS officials if they had seen any kind of reduction in the COLA. Senate President Pro Tem Dean Kirby asked similar questions.

Both said after the meeting that they were not advocating for a COLA reduction, but were trying to gather information.

Ray Higgins, PERS’ executive director, said his board has considered the COLA issue, but after questioning, added, “But the prevailing and historical comment is that you can’t make those changes.”

During various meetings in recent months, Hosemann has reiterated his commitment to preserving the COLA.

In March on social media, he said: “To be very clear: I remain committed to protecting all retirement benefits of all our retirees and our current employees. I also remain committed to supporting the system of the pension, which the executive director has now informed us is $25 billion unfunded.”

During the 2024 session, the Legislature pumped about $110 million into the system — far less than some argued was needed to maintain its fiscal integrity. Legislation was also passed to remove a significant portion of the PERS board’s power and vest that authority in the Legislature.

But the bill removing that authority also included language reaffirming a commitment to protect PERS benefits, such as COLA.

The bill, in part, says it “shall not be construed to provide authority to reduce or eliminate any benefits earned by the state” for members of the system.