A handful of newly elected legislators could face a difficult decision on the opening day of the 2020 session if a long-standing regulation of the Public Employees Retirement System is not changed to allow them to serve while drawing their retirement benefits.
The PERS Board voted in February, based on an official opinion issued by the office of Attorney General, to repeal a regulation that prohibited retirees from drawing their retirement while serving in the Legislature. But the repeal was contingent on Internal Revenue Service approval. Thus far, according to the PERS web site, that IRS approval has not come with the opening of the legislative session – Jan. 7 – quickly approaching.
If that IRS approval does not come, the retirees elected to the Legislature this past November, could either have to resign or forfeit their state retirement, which in most cases is substantially more than the pay of a legislator.
“There will be some of us who just cannot financially afford it,” said Dale Goodin, a former vocational technical education director for the Perry County School District, who retired in October after 29 years as a public educator.
Goodin, who defeated incumbent Roun McNeal in District 105 representing portions of George, Greene and Perry counties, would not say for certain what he would do, but conceded it would be difficult to give up his state retirement.
Billy Andrews, who served in the House in the late 70s and earlier 80s and later served as county judge and youth court judge in Lamar County, is in the same boat. He won the vacant District 87 seat representing parts of Lamar and Forrest counties.
“It is hard to tell exactly what I am going to do,” he said. “It is a work in progress. Hopefully, it will get resolved, and I won’t have to do anything other than serve in my legislative post.”
PERS said at least seven new members would be impacted to some extent . In addition, there are incumbent members who have been serving and sacrificing their pension.
On the PERS website, Executive Director Ray Higgins has a statement, saying the IRS has yet to officially respond on whether the change in the regulation would adversely impact the retirement system’s tax exempt status, possibly harming the system and the members of the system.
But Higgins wrote, he has “reason to believe the IRS may not answer in support of the proposed regulation. Should we not receive IRS affirmation, we will likely have no choice but to withdraw our proposed regulation,” meaning the retirees would lose their pension while serving in the Legislature.
Others have argued that retired public employees are allowed to serve in other states without their system being penalized by the IRS. They say they do not understand why Mississippi is different.
For instance, Florida law says specifically “any retired state employee who is presently drawing retirement benefits under any state retirement system may, as any other citizen, serve in the Legislature without affecting in any way his or her retirement status or the receipt of retirement funds while a member of the Legislature.”
In an emailed response to questions, Higgins wrote the reason the IRS might allow public employee retirees to serve in the legislature in other states without losing their pension and not allow it in Mississippi is “each state is different. Each state has different laws, regulations, and retirement plan designs.”
Goodin also pointed out Mississippi public employee retirees can serve in local government, such as a member of a city council or on the board of supervisors.
“We’re not asking for any special favor,” he said. “We just want to be treated like local politicians.”
The issue has come to the forefront because late in 2018 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 might opt to run for the Legislature.
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.
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.