PERS adopts initial Tier‑5 DC plan document; employers must remit participant contributions promptly

The Public Employees Retirement System of Mississippi on Aug. 23 approved the initial plan document for the defined‑contribution portion of the Tier 5 hybrid plan, a 401(a) profit‑sharing style arrangement. Trustees voted in favor of the draft plan in a voice vote, with the board to return for final adoption at its October meeting before the plan goes live March 1, 2026.

PERS staff said the document follows language used in existing DC plans (the ORP and MDC) and includes key operational provisions required for federal compliance. On contributions, the document requires that participant deferrals be remitted by employers to the plan’s third‑party administrator (TPA) — Empower — within five business days following the end of the month in which amounts were withheld. The plan text, as presented, provides an extended cure period: a contribution will not be considered delinquent until after 15 business days, giving employers additional time to correct errors.

A staff presenter summarized other design choices: participant default investments will be target‑date funds (the board will direct contributions to the target date closest to age 65 for unenrolled participants); employers that elect to make employer contributions must enter a written Participation Agreement with the board; roll‑in (rollover) contributions from prior plans will be permitted and will retain source identity; and the plan will follow federal guidance on unforeseeable emergency distributions.

PERS legal reviewers and outside counsel (Ice Miller) vetted federal‑law language and ERISA/IRS‑related definitions in the draft. The document also clarifies certain membership rules that echo the DB program: employees who move to non‑covered positions cease participation, and the plan uses standard nonassignment and trust provisions under Mississippi law.

Board members and staff discussed several implementation matters tied to employer operations: the need for employer training, protocols for fee‑paid officials (county clerks and certain local fee officers who remit on a different schedule), and the practical implications of late employer remittances for a DC plan (missed market opportunity versus DB back‑end corrections). Staff said training and employer guides will be rolled out this year and that the board and staff are working with Ice Miller and Empower on compliance processes.

During the discussion trustees also addressed military leave purchases (USERRA). Staff said the DC portion will allow members called to active duty to make catch‑up contributions for missed DC contributions when they return; this mirrors existing USERRA practice on the DB side. The staff noted that out‑of‑state service purchases for prior employment are not available under the Tier 5 design.

Vote at a glance • Adopt initial plan document for the DC side of Tier 5 — Approved by voice vote; board to consider final adoption in October prior to March implementation.

Why it matters The adopted document defines employer obligations and participant protections that are operationally critical to Tier 5’s DC features. Timely employer remittance is more important in a DC plan because those late deposits can cost participants market returns for the period funds were not invested.

What’s next PERS staff said employer training, implementation guides and draft regulations will be circulated this fall; the board will return to finalize the plan document in October and to approve associated regulatory language.