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PERS board adopts ADEC funding policy, approves 18.4% contribution rate and $720 million Pathway commitment
Summary
At its February meeting, the Public Employees Retirement System of Mississippi Board of Trustees voted to adopt a funding policy based on the Actuarially Determined Contribution, gave initial approval to raise contribution rates to 18.4% effective July 1, and approved a $720 million private-equity commitment to Pathway Capital Management.
The Public Employees Retirement System of Mississippi Board of Trustees voted at its February meeting to adopt a new funding policy that uses the Actuarially Determined Contribution (ADEC), gave initial approval to Regulation 60 to set contribution rates at 18.4% effective July 1, and approved a $720,000,000 private-equity commitment to Pathway Capital Management.
The funding-policy change and the contribution-rate adjustment were presented by Mister Benson, Administrative Committee chair, who moved adoption of the revised funding policy to align the system with the ADEC approach. The board then moved to approve initial adoption of Regulation 60, which the committee said conforms the current policy to a statutory increase producing an 18.4% contribution rate beginning July 1.
The board heard investment projections from Doctor McCoy, Investment Committee chair, who summarized the portfolio outlook and said, "the 10 year geometric return for PERS is gonna be 7.3%." Using the consultants' assumptions, the investment report projected a 53% probability that the current portfolio would achieve the 7% discount rate over a 10-year horizon and reported a fiscal-year-to-date total-fund return of 3.8% with an estimated fiscal-year-to-date return of 6.6% as of Feb. 24.
Doctor McCoy brought forward the investment committee's recommendation to continue the partnership with Pathway Capital Management and to make a fifth commitment of $720,000,000 to a new private-equity fund series (02/2025). The board approved that commitment.
Other board actions included administrative and plan-level items: the administrative committee approved a ballot for the retiree representative election; the board approved leaving the member-account interest-crediting rate at 1%; the Defined Contribution Committee removed Wellington Small Cap from the deferred-compensation watch list and approved initial-adoption amendments to the ORP (Optional Retirement Plan) document effective July 1, 2025; and the disability appeals committee recommendation for PERS case number 25-02 was approved.
Staff reports tied benefits and cash-flow activity to recent payments: a staff presenter noted monthly retiree payroll in February exceeded $214,000,000 and cited a sizeable December cash outflow (about $885,000,000) related to a lump-sum COLA payment. Board members discussed the scale of total benefit payments and observed the system is moving toward roughly $4,000,000,000 in annual benefit payments, though one speaker said last year’s total was “not quite 4,000,000,000.”
Votes at a glance - Administrative committee: approve ballot for retiree representative — approved (motion placed by Mister Benson; second not specified). - Funding policy: adopt ADEC-based funding policy — approved (motion placed by Mister Benson; second not specified). - Interest crediting: leave member-account crediting rate at 1% — approved (motion placed by Mister Benson; second not specified). - Regulation 60: initial approval to conform contribution rates to 18.4% effective July 1 — approved (motion placed by Mister Benson; second not specified). - Defined Contribution: remove Wellington Small Cap from watch list — approved (motion placed by Doctor Rutledge; second not specified). - ORP plan amendments (effective 07/01/2025): initial adoption approved — approved (motion placed by Doctor Rutledge; second not specified). - Investment allocation: $720,000,000 commitment to Pathway Capital Management private-equity fund — approved (motion placed by Doctor McCoy; second not specified). - Disability appeals: approve committee recommendation for PERS case 25-02 — approved (mover/second not specified). - Retiree report: accept monthly retiree payroll report — approved (mover/second not specified). - Investment report: accept investment report and transactions since last meeting — approved (mover/second not specified).
Board members and staff framed the votes as routine fiduciary and administrative actions rather than policy changes requiring further public input. Several items were described as "initial approval" or routine updates and will proceed through the standard implementation steps or remain subject to statutory schedules.
"I would place the new funding policy in the form of a motion for adoption," Mister Benson said when presenting the administrative committee recommendation. Doctor McCoy emphasized the investment outlook while presenting the proposed Pathway allocation and the ten-year projections.
The board set its next regular meeting for April (exact date not specified during the session). Economic interest disclosures for board members and certain executives were noted as due May 1.
