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PERS actuaries warn fund remains vulnerable under several scenarios despite recent law and one‑time cash infusion
Summary
Actuaries told the Public Employees Retirement System of Mississippi that, under current assumptions and the recent legislative package (17.9% employer rate and a $110 million one‑time infusion), the fund’s projected funded ratio stays near 50% and insolvency probability rises in many scenarios; the board approved two additional independent actuarial assessments.
Actuaries presented updated stress testing to the Public Employees Retirement System of Mississippi on the system’s funding outlook, saying the fund remains fragile under several plausible scenarios despite recent legislative changes.
Ed Copeland (Speaker 6), the actuary presenting results, said the board’s deterministic and stochastic models assume a 7% long‑term investment return and a static active membership of about 145,000. Under a scenario that reflects recently enacted legislative changes — an employer contribution step to 17.9% and a one‑time $110 million infusion — Copeland said the funded ratio would decline and the modeled probability of insolvency over 30 years rises. “And there's a 43 probability of going insolvent based on this scenario over 30 years,” he said.
Speaker 1, who introduced the presentation, noted PERS’s current resources and the need for careful planning: “PERS is certainly stable and we have $33 plus billion to pay benefits,” and added the agency will complete three independent actuarial assessments required by the law.
Why it matters: the models show that small changes in assumptions or adverse market returns early in the projection period can materially worsen the outlook. Copeland illustrated several runs: a baseline using the 2023 valuation, the legislature’s package (17.9% + $110M one‑time), a phased approach to 19.9% over five years, and negative‑return stress cases. On a scenario with a negative 5% return in the next fiscal year, Copeland said funded measures deteriorate sharply and the probability of insolvency moves materially higher.
Board action and next steps: the board approved staff recommendations to hire two additional actuarial firms, GRS and Chiron, to perform concurrent independent assessments. Speaker 1 said the firms will use the same data and comparable chart formats so the board and public can compare outputs; the board will review the three reports together and may forward recommendations to the legislature, which retains final funding authority.
What the analysts assumed and highlighted: the presentation assumed a 7% mean return (stochastic scenarios use a standard deviation the presenter described in detail), static active membership near 145,000, and a range of deterministic and stochastic scenarios. Copeland and board members repeatedly warned that timing of returns matters: large negative returns early in the projection period can require materially different policy responses.
The board requested staff and the actuaries to accelerate the timeline for draft reports where feasible so the findings can be available to legislators and stakeholders before next session. Staff said drafts are expected ahead of the December board meeting, and the three independent reports will inform any legislative or board recommendations.
The actuarial presentation and the board’s vote to contract with the two firms mark a step toward producing multiple independent assessments; the legislature will make final funding decisions based on those reports and its own process.
