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.

Search Results for:

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

PERS Still Massively Underfunded Despite Stock Market Hitting All-Time Highs

Posted in PERS Crisis

Steve Wilson at Mississippi Watchdog recently wrote here about how Mississippi’s pension system ranks nationally. From the article: A new report by nonprofit State Budget Solutions says Mississippi’s Public Employees’ Retirement System of Mississippi is carrying $56 billion in unfunded liabilities, worst in the nation — now at 53 percent of the gross state product… Continue Reading

PERS Update: Future of Pension Funds is Bleak

Posted in PERS Crisis

Mish’s Global Economic Trend Analysis had this post on Friday about a report that concludes that 85% of pension funds will fail over the next three decades. From the post: Bridgewater Associates did an analysis of pension funds recently and concluded 85% of them will fail if returns average 4%.  Bridgewater notes that public pensions… Continue Reading

PERS Update: Illinois Can’t Fix PERS System Despite Nation’s Worst Funding Shortfall

Posted in PERS Crisis

The Walls Street Journal reported today on Illinois’ attempt to repair its nation’s worst state-pension crisis. The Illinois debacle is instructive on what a political hot potato state retirement system shortfalls are and how hard it will be to broker an agreement to fix Mississippi’s PERS system. The article states: A split has developed on… Continue Reading

WSJ Op-Ed: Pension Funds’ Expected Rate of Return = Biggest Lie in Global Finance

Posted in General, PERS Crisis, Politics in Mississippi

Regular readers of this blog know about my prior criticisms of the expected rate of investment return assumption in the Mississippi Public Employees Retirement System. Here are my prior posts. A Wall Street Journal opinion by former hedge fund manager Andy Kessler calls pension funds’ (like PERS) investment return assumption a fantasy that will leave… Continue Reading