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.