By Ed Kemp
The move last month by the Public Employees' Retirement System board to delay a $54 million increase in employer contributions may have saved the state some money in the short term, but it came at a price, according to State Treasurer Tate Reeves.
"The message that is sent by delaying it and not funding it as required is a bad one," said Reeves, who stopped by the Hattiesburg American on Wednesday morning during a visit to the Hub City.
The PERS board voted for the delay at the request of Gov. Haley Barbour and key Republican legislators.
The delay will save the state $17 million in Fiscal Year 2012.
Reeves, a two-term Republican who sits on the PERS board and is running for lieutenant governor, said it sends both a bad message to retirees and investment markets.
"The buyers of Mississippi bonds are looking at how we're funding our debts," he said. "And there's a big difference between states that have large pension liabilities and aren't funding it and those that have large pension liabilities and are funding it."
Mississippi's unfunded liability is $11.3 billion.
Barbour had called to skip the increase altogether, but the board refused based on state law.
The PERS system has roughly 250,000 current and retired employees. Reeves said they should not be concerned with the program's solvency.
"We have funded our system adequately," he said.
After 2010 saw investment returns increase 14.1 percent, Reeves said that FY 2011 has brought more than 20 percent returns to the system.
Critics have pointed to the sluggish 2.3 percent growth for the past 10 years that falls short of the 8 percent growth required for stability.
"If you look at the last decade compared to every other decade, it is an anomaly," countered Reeves.
He added that the overall growth since it started three decades ago is closer to 9 percent.
Other Reeves comments from Wednesday include:
* On redistricting: Reeves laid into a statement made by Rep. Billy McCoy, a Democrat, that the House's redistricting plan is fair to all legislative members.
* Reeves said the plan takes the state's current gerrymandered system and makes it worse."I go back to 2007. I got almost 62 percent of the vote statewide on the same day that 75 Democrats and 47 Republicans were elected to the House of Representatives," he said.
* On the financial well-being of MPACT, Mississippi's college savings plan: "There is an assumption by some that because other states are in trouble, our state has to necessarily be in trouble," Reeves said.
* "We have about $250 million in assets today."We spend about $18 million a year, so if nobody ever puts another penny in, and if the market never recovers or increases, we will still pay benefits for the next 15 years