The Jackson Clarion-Ledger reports that doing so will save the state general fund about $17 million in fiscal 2012 and also will save counties and cities millions of dollars next year in their share of the employer contribution.
According to the news report, in October, the pension board voted to approve an increase in the employer contribution rate from 12% to 12.93% at the prompting of an actuary, who blamed the needed hike on several years of market losses and benefit enhancements passed in the late 1990s that are straining the system. Last year, lawmakers voted to raise the contribution rate for employees from 7.25% to 9%.
Governor Haley Barbour had called for skipping this year’s increased pension payment altogether, citing a need for an examination into why the state pension system, year after year, requires millions of additional taxpayer dollars.
Treasurer Tate Reeves, calling it a “fiduciary responsibility” to fund benefits approved by the Legislature, was the only member to speak against the proposal at the full meeting of the board. “Delaying our obligations only puts more pressure on future contribution rates, potentially harming the long-term health of the fund and shifting the burden of paying benefits to future generations,” Reeves said in a statement issued after the vote, according to the Clarion-Ledger.The retirement system’s investment earnings were up more than 14% in fiscal 2010 and topped 20% in the first seven months of the current fiscal year, through January 31. The pension system owes retirement benefits to some 247,000 public employees and retirees, including state workers, teachers, police officers, judges and municipal and county employees, the news report said.