April 22, 2010

GOVERNOR BARBOUR CALLS SPECIAL SESSION TO FIX
STATE RETIREMENT SYSTEM

State employees – not taxpayers – should increase contributions

Governor Haley Barbour called a Special Session today to increase state, city, county and school district employees’ contribution into the retirement system by less than 2 percent to ensure the pension remains solvent. If approved, it would be the first increase in employee contributions since 1991.

The session will begin at 1 p.m. today and will run concurrently with the remaining days of the regular legislative session. Legislators are in Jackson this week to finalize the Fiscal Year 2011 budget.

“Nobody here likes this; however, both Houses understand that we have to protect our state employees’ future pensions, and we have to protect our pension recipients today,” Governor Barbour said in a press conference today. “If we don’t do this then $70 million will be lost to the general fund which will undoubtedly result in people being laid off, perhaps 1,000 or more layoffs if departments and agencies have to take this out of their budgets.”

Employee contributions to the Public Employee Retirement System, currently 7.25 percent, would increase to 9 percent to keep the program in line with requirements of the Governmental Accounting Standards Board. The increase would place more than $70 million into the system from state workers and another $20 million from city, county and school district employees. 

Without the increase from state workers, the money would be taken from agency budgets, which are already strained by budget cuts and low revenue projections for next year. Employee contributions have not risen in almost 20 years while taxpayer payments into the pension plan have steadily risen to 12 percent.

Governor Barbour said there should be a fair balance of contributions paid by the employee and the taxpayer.