PERS staff outlines timeline for Tier 5 launch; board and lawmakers debate eligibility, employer readiness

Miss Higgins, staff member for the Public Employees' Retirement System of Mississippi, told the Administrative Committee the agency is near a signed contract with Empower as the initial recordkeeper and third‑party administrator and is targeting an October board packet for the Tier 5 plan document and initial investment lineup.

"I appreciate your approval of Empower as the initial record keeper and third party administrator...the contract slash amendment is ready to be signed and we anticipate that coming and being finished in the very near future," Miss Higgins said.

The committee heard that work on the investment lineup and the plan document is underway with the agency’s investment team, Callan and Empower; staff emphasized regulations tied to implementation (including Regs. 36, 37 and 65) will follow and that filings will include a public‑comment period. Staff said they will not wait until all regulations are final to begin employer outreach and will post a Tier 5 information hub with FAQs on the PERS website.

Why it matters: Tier 5 changes the benefit structure for new hires and introduces a defined‑contribution component; employers, payroll departments and school districts will need lead time to adjust payroll, deductions and IT systems before hires take effect. Miss Higgins said staff will do employer outreach and training well in advance of implementation and will monitor employer reporting.

Key operational items and timing cited by staff

- Empower: approved as initial recordkeeper/third‑party administrator and contract expected to be finalized soon. - Plan document: tentative target to present to the board in October (staff said August was possible but October was more likely). - Investment lineup: staff and Callan are developing an initial lineup; tentative board presentation in October. - Regulations: staff expect a series of regulatory filings (Regulations 36, 37 and 65 were named) with the first filing followed by public comment and a second filing; staff said some regulatory clarifications will also be addressed in the plan document. - Employer outreach: a Tier 5 web page, a one‑page benefit comparison and an FAQ are already live in early form; staff said employer reporting and customer‑service teams are receiving many questions now.

What employers and members asked about

Committee members and legislative members pressed staff about several practical questions employers have raised: which hires remain in Tier 4 if they leave and return, how ordinary leave and accumulated unused leave will count toward final average compensation and retirement eligibility, and how the new hybrid will affect recruitment for law enforcement.

Senator Sparks, who identified himself as the bill’s author in the discussion, summarized the statutory intent on tier status: "you are the tier of which you're hired unless you take a full refund," and said that, under the law, a member hired before March 1, 2026, who does not take a full refund will retain their pre‑Tier‑5 tier status.

Agency staff and board members noted details that employers have asked about but that implementation documents must clarify:

- Eligibility rules in existing regulations describe a position as expected to exceed 4½ months and exclude student/paid intern roles; staff said those rules still apply and that employers should report covered employment appropriately. - Leave payout: staff said current law limits payout that counts toward service credit and that employers asked whether the statutory payout limit (30 days as discussed in the meeting) should change; the board discussed the practical impact for teachers and contracted employees who accumulate leave. - Employer IT and payroll: county and city representatives asked for enough lead time for payroll and deduction changes; staff said they will begin communications early and provide draft regulations and plan‑document guidance as soon as possible.

Board members requested clearer early notice about communications staff had with legislative leadership. Several board members said they expected to be informed when executive staff met with lawmakers who were drafting the legislative Tier 5 proposal. Miss Higgins said staff had engaged with legislative leadership and board officers during the fall work, and noted that many Board officers and staff had been involved in working meetings prior to the law’s passage.

No formal board decision was taken on Tier 5 in this session; the committee heard an operational update and asked staff to continue outreach, finalize the plan document and draft regulations for the board’s review.

Ending

Staff said next steps are to continue plan‑document drafting, finish the recordkeeper contract with Empower, refine the initial investment lineup with Callan and roll out employer training and the Tier 5 web repository. The board asked staff to keep members informed of substantive employer questions and to circulate proposed regulatory text early so employers and payroll teams can prepare.