Mississippi Litigation Review & Commentary

Mississippi Litigation Review & Commentary

Comments on the Latest Developments in Mississippi Civil Litigation

Philip is a trial attorney based in Jackson, Mississippi with a diverse civil litigation practice.

Category Archives: PERS Crisis

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Pennsylvania PERS Reform Shows Where This is Going

Posted in PERS Crisis
Last week the WSJ (paywall) reported on Pennsylvania’s PERS reform legislation. Not surprisingly, the reform moves toward 401(k) type retirement benefits as opposed to the soon-to-be-extinct pension system. From the article: The compromise measure will move most future state and public school workers at least partly into 401(k)-style plans to help shore up the deeply… Continue Reading

PERS Update Lagniappe

Posted in PERS Crisis
A few random bits of PERS related news. Just as a reminder, PERS is Mississippi’s Public Employees Retirement System. It’s a defined benefits pension plan. Unlike 401(k) plans and IRA’s that most private sector employees in my generation and younger are familiar with, pensions have a defined amount that has to be paid out upon… Continue Reading

More Bad News on PERS

Posted in PERS Crisis
There is more negative coverage this week on public employment retirement systems, such as the Mississippi Public Employees Retirement System: Hidden Debt, Hidden Deficits: 2017 Edition, by Joshua Rauh; and The Unavoidable Pension Crisis, by Lance Roberts of Real Investment Advice. Here are some excerpts from the Rauh report: “…the basic flaw in governmental pension… Continue Reading

PERS Crisis Unavoidable?

Posted in PERS Crisis
I recently read this Lance Roberts article about the unavoidable pension crisis posted on Zero Hedge. The article discusses the investment rate of return assumption that I have focused on in my posts on PERS: The biggest problem, following two major bear markets and sub-par annualized returns since the turn of the century, is the expected investment… Continue Reading

PERS Earns 9.24% Investment Return in 2016

Posted in PERS Crisis
The Public Employees’ Retirement System of Mississippi (PERS) had a great year in 2016 earning a 9.24% return on its investments. Here is the PERS Investment Report for the period ending December 31, 2016. That’s well above the 7.75% assumed return for meeting future obligations to state retirees. This is good news. The bad news… Continue Reading

Not the PERS Reform We Were Looking For

Posted in PERS Crisis
Geoff Pender at the Clarion-Ledger reported last week on the Mississippi Legislature passing a bill allowing PERS to pay its director and chief investment officer as much as it wants. From the article: The cap is currently $183,240, or 150 percent of the governor’s salary of $122,160. Current PERS Director Pat Robertson announced this week… Continue Reading

George Will on the Looming Pension Crisis

Posted in PERS Crisis
Conservative columnist George Will wrote this article about America’s looming pension crisis. From the article: Nowadays, America’s most persistent public dishonesties are the wildly optimistic, but politically convenient, expectations for returns on pension fund investments. Last year, when Illinois reduced its expected return on its teachers’ retirement fund from 7.5 percent to 7, this meant… Continue Reading

Experts Say Tell Florida Its 7.6% PERS Investment Return Assumption Is Too High

Posted in PERS Crisis
The Orlando Sentinel reported last week on a report from the State’s actuarial consultant that stated that Florida’s PERS investment return assumption of 7.6% is too high. The actuaries recommended a 7% investment return assumption. Financial models showed that there was less than a 35% chance of meeting the assumed 7.6%: The consultants developed financial… Continue Reading

Mississippi PERS in Crisis?

Posted in PERS Crisis
AP reporter Jeff Amy recently reported that according to PERS Executive Director Pat Robertson, PERS is not in a crisis. Instead, Robertson says PERS just needs to earn 13% in investment income this investment year: This ugly picture could be greatly improved by a good year in the stock market. Robertson said that if investments… Continue Reading

State Budget Proposals Will Only Make PERS Problems Worse

Posted in PERS Crisis, Politics in Mississippi
In Kingfish’s recent post on PERS he discussed the structural problems PERS has with growing retiree roles vs. enrolled workers. That problem is apparently guaranteed to get worse with Mississippi’s budget problems. Lat week at Mississippi Today Adam Ganucheau reported on the legislature’s plans for the 2018 budget. Those plans include eliminating 1,999 vacant state… Continue Reading

Jackson Jambalya Examines Latest PERS Filings

Posted in PERS Crisis
The PERS annual report was recently presented at a public meeting and Kingfish was the only media in attendance. Here is his latest PERS post. The report includes PERS’ latest annual report. In summary, Kingfish reports that the problems with PERS are getting worse. The number of retirees drawing from the system is growing at… Continue Reading

PERS Director Now Says 60% Funding is Good

Posted in PERS Crisis
Last week PERS executive director Pat Robertson published an article in the state press responding to criticism of Mississippi’s public employees retirement system. Think Kevin Bacon at the end of Animal House. From the article: Our funded status means we have approximately 60 percent of the funds needed to pay not only all current benefits,… Continue Reading

Does PERS Have 2 Sets of Books?

Posted in PERS Crisis
Last week the New York Times published this Mary Williams Walsh article regarding public pensions having two sets of books. Why the difference? The dreaded investment return projections that I have discussed in many prior posts on this topic. According to the article, public pensions only disclose the financials with the optimistic projections even though… Continue Reading

PERS Suffers Negative Yearly Investment Return

Posted in PERS Crisis
Mississippi’s PERS website links its quarterly investment report for the period ending March 31, 2016: PERS Investement Report.03.31.16. The report reflects that the total fund’s return for the period ending 3/31/2016 was  minus .47%. As a reminder, PERS is modeled on an unrealistic investment return assumption of 7.75%. The fund made money in private equity,… Continue Reading

PERS Investment Update

Posted in PERS Crisis
Last year I was critical of the Mississippi PERS investment allocations in posts here and here. In the posts I questioned whether PERS needed to be dumping treasuries for junk bonds and whether the equity/stock allocations were too high. Here is a chart that shows the performance of treasuries (TLT), junk bonds (JNK) and domestic… Continue Reading

Blogger Identifies More PERS Problems

Posted in PERS Crisis
Jackson Jambalya had this excellent post yesterday on PERS. The post notes that PERS has structural problems because the ratio of active workers to retirees has fallen from 2.4 in 2006 to 1.6 in 2015. And: The retirees keep growing and growing and growing.  There were approximately 63,900 retirees in 2005.  However, there were 96,300… Continue Reading

Report Looks at Public Pension Investment Return Assumptions

Posted in PERS Crisis
This recent NASRA report looks at the investment return assumption of public retirement systems nationwide. Mississippi’s 8% investment return assumption is among the nation’s highest, although many other systems use this optimistic projection. Investment returns are hugely important for PERS because–as the report notes–investment returns account for an average of 62% of revenue. If investment… Continue Reading

PERS Crash Warning!

Posted in PERS Crisis
From Bianco research, courtesy of the Big Picture Blog, is a chart that explains why PERS has one foot over the edge of the cliff and the other foot on a banana peel:   The Big Picture has more scary charts and tables. This also explains why you probably have a higher allocation of stocks… Continue Reading

PERS Investment Stupidity

Posted in PERS Crisis
Last week in this post I criticized the investment allocation for Mississippi PERS. In that post I noted that PERS is investing in foreign and junk bonds: The PERS 2014 financial report explains that the portfolio’s fixed income investments are a departure from the System’s previous U.S. investment grade only bond portfolio structure. The fund is… Continue Reading

PERS Lunacy Continues

Posted in PERS Crisis
Here are the asset allocations for the Mississippi Public Employees Retirement System as of December 31, 2014: PERS Asset Allocation 12-31-14. U.S. Equities – 35.80%  Non-U.S. Equities – 21.51% Global Equity – 6.03% Real Estate – 10.22% Fixed Income – 20.63% Private Equity – 4.77% Cash – 1.04% Over 60% of the portfolio is in the… Continue Reading