For retired teachers and state employees, running for Legislature under rule change could be a gamble

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Eric J. Shelton, Mississippi Today/ Report for America

Attorney General Jim Hood said last year that a long-standing regulation of the PERS Board saying retirees could not serve in the Legislature and draw their retirement check conflicted with state law. 

 

Retired teachers and other public employees wanting to run for the Legislature later this year will have to decide whether action taken this week by the Public Employees Retirement System Board of Trustees will ensure they will be able to draw their pension if elected to the House or Senate.

The board that governs the state retirement system voted Tuesday to work to enact regulations to allow retired state and local governmental employees and educators to serve in the Legislature and receive their pension benefits starting with the new legislative term in January.

But before putting those regulations in place, members of the board said they must address certain issues, such as ensuring the change does not negatively affect the retirement system’s favorable federal tax exempt status.

Nancy Loome, executive director of the pro education Parents Campaign, said she believes the issues will be worked out and that retired public employees will be able to serve in the Legislature and draw their pension. If not: “I think there will be a lawsuit, I think one way or another people elected will be able to draw their state retirement and serve in the Legislature.”

But  former Chickasaw County Superintendent Kathy Young Davis conceded Tuesday’s decision of the Board leaves her with a tough decision.

She wants to run for the open District 8 Senate seat. But she is fearful of what would happen if she wins but the board decides it cannot change regulations to allow her to serve and draw her benefits.

“I am praying about it,” said Young Davis, who worked in education for more than 30 years.

“Education has been placed on the backburner (in the Legislature) for the last 12 years,” she said Tuesday at the specially called meeting of the board that oversees the state retirement system. “I would like to go to Jackson for the schoolchildren. But I can’t give up my retirement.” She said there are other educators interested in running for the Legislature this year.

The issue has come to the forefront because late last year the office of Attorney General Jim Hood said a long-standing regulation of the PERS Board saying retirees could not serve in the Legislature and draw their retirement check conflicted with existing state law.

That ruling created excitement with many pro-education groups with the speculation that retired educators, such as Young Davis, might opt to run for the Legislature. Various education groups, like the Parents Campaign, have been urging retired educators to run.

Official opinions of the attorney general’s office do not carry the weight of law, but they provide a level of protection from lawsuits for public employees who adhere to them. Hood, a Democrat running for governor this year, predicted PERS would face lawsuits from educators wanting to run for the Legislature if the board did not amend its regulations to adhere to his decision.

At Tuesday’s specially called meeting, board member Randy McCoy, the former superintendent of the Tupelo Public School District, made the motion to work to adhere to Hood’s opinion. The only member of the 10 member board to vote against the McCoy motion was Medicaid Executive Director Drew Synder, who was appointed by Republican Gov. Phil Bryant.

The primary reason that the board did not formerly adopt the Hood opinion is that its private tax attorneys said the change could place in jeopardy the special federal tax status of the state retirement system. The special tax status prevents federal taxes from being levied on the investment earnings of the retirement system.

“We support our retirees. We just have to make sure we don’t do anything to jeopardize our plan,” said PERS Executive Director Ray Higgins, who seemed to be leaning toward recommending to the board that it take no action on Tuesday until further research was done on the issue.

But Harold Pizzetta, an assistant attorney general, recommended to board members that with the March 1 qualifying deadline to run for office looming they should take some action to assure retired educators and other state employees they were trying to change the regulation by Jan. 1 to allow them to serve in the Legislature and draw their pension.

“It allows us to keep all options open,” said Pizzetta, who pointed out that it has been worked out so that retired public employees in most other states could serve in their legislatures while drawing their benefits.

Various education groups attended Tuesday’s meeting in support of changing the regulation.

“Clearly the board understands that retirees, some of our very best public servants, have earned the right to draw their retirement and serve their state in a different capacity,” Loome said.

The attorney general’s opinion argued that preventing state employee retirees from serving in the Legislature while drawing their retirement was taking away a right that other citizens had.

While maintaining the special federal tax status is the biggest issue the board faces in changing the regulation, Higgins said there are other concerns related to state law to be worked out.

For instance, current state law allows a state employee to return to work part-time after a 90 day break. Issues, such as whether state employees could draw their full legislative pay must be addressed.

Most employees of state and local governments, public K-12 and university employees, participate in the retirement system, contributing 9 percent of their salary for retirement benefits.

According to PERS data, the average benefit is more than $23,100 annually for the more than 100,000 people drawing benefits. In total, according to the AG opinion, more than 300,000 are in the public employees retirement system either drawing benefits, having paid into the system or currently paying into the system.