PERS board adopts revised funding policy, keeps ADEC language and adds triggers for legislative infusions

The Public Employees Retirement System of Mississippi administrative committee approved a revised funding policy that keeps the board’s actuarially determined contribution (ADEC) guidance while adding language to account for legislative cash infusions and to trigger board action if funding metrics worsen.

The policy change, presented by staff and reviewed with actuary materials, was approved by voice vote after committee discussion and will be placed on the board’s docket for implementation as the plan’s governing documentation is finalized.

Board staff told members the revision explicitly recognizes when the Legislature supplies additional funding, dedicated revenue streams or other cash infusions and requires that such amounts be reflected when the board and actuary calculate funding metrics. The draft retains an ADEC approach — described in meeting materials as the actuarially determined contribution section — after members warned that deleting it would remove key guidance for recommending employer and member contributions.

Doctor McCoy, who joined staff in drafting the update, argued the ADEC language must remain. “One of the actuarially determined contribution sections was proposed to be eliminated, and I felt as if that needed to remain in there because we have adopted that one way that legislature can fund,” Doctor McCoy said during discussion, adding that the board needs a method to show what employer and member contributions are required.

The actuary, identified in materials and present for questions, said the policy continues to use projections and a set of signal‑light metrics to show the board whether the fund’s trajectory is improving or deteriorating. He noted the projections assume replacement of current active members by future retirees and embed assumptions about asset growth, payroll and benefit payments over decades. “We run projections because you could be 55 percent funded today, but if they do the funding and we look like we’re heading in the right direction, we’re fine. It’s that trajectory,” the actuary summarized.

Committee members discussed including a reference to the lottery dollars proposal in House Bill 1 (an ongoing $100 million per year proposal discussed that morning) and decided to replace specific references to “lottery” with broader language such as “other funding” to keep the policy flexible. Members also requested that the final document spell out that objectives include employer and member contributions plus investment earnings to accumulate sufficient assets.

Several members asked staff to add a clear trigger — described by one member as an “alarm” — that would prompt immediate board notification to the Legislature and other stakeholders should funded‑ratio metrics indicate imminent jeopardy. The draft retained signal‑light language with an 80 percent target band for green status; board discussion highlighted greater concern if the ratio moved below 50 percent.

The committee voted to adopt the funding policy as presented with edits (replacement of specific “lottery” references with broader funding language). The vote was taken by voice; no roll‑call tally was read into the record.

The committee directed staff and the actuary to finalize formatting and to return a final, styled document at the next full board meeting for administrative completion and posting.