Wednesday, December 14, 2011

Haley’s PERS Study Commission (brought to you by Frozen COLA)

During election season, the ready refrain of Governor Barbour and all Republican candidates when asked about the Public Employee Retirement System (“PERS”) was “We’re not going to touch your 13th check.” The Governor’s Study Commission apparently wasn’t listening.

In a report issued this afternoon, the PERS Study Commission called for a freeze on cost of living adjustment (“COLA”) payments. This would mean that current retirees would continue to receive 13th checks but without any inflation adjustment. For public employees contemplating retirement, acceptance of the Governor’s Commission recommendation would mean no 13th check for three years after retirement.

After the three year freeze out, the Commission proposes inflation be tied to the Consumer Price Index rather than the current statutory rate. If the legislature were to accept this proposal it would mean a considerably lower payout for retirees than what they’re currently receiving.

There are other recommendations in the report that merit attention like the defined contribution plan study and the addition of more financiers to the PERS Board but we’ll give our public employees a chance to recover from the initial frozen COLA brain freeze before addressing those.


Kingfish said...

You do realize they got cost of living adjustments when there was deflation in the last few years, right?

bill said...

Okay, let's see. Full benefits after 30 years of service (25 in some cases), regardless of how old you are. Guaranteed cost of living raises every year no matter how bad the economy is doing. Vesting at four years if I went to work prior to July 2007 and eight years after. This is a commercially viable retirement plan that doesn't need to be changed? Show me anything remotely close to this in the private world. It's not only the retirement system, but the entire state total compensation policies that need to be reformed. Bill Billingsley

bill said...

Forgot one other thing - the employer (taxpayers) in the state system pays 12% of your pay every year into the plan. Bill