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Independent actuaries back PERS’ 2024 valuation but say state pension needs more contributions
Summary
Two independent actuarial reviews largely replicated the Mississippi PERS valuation for 2024, endorsing the plan’s assumptions (including a 7.0% discount rate) but concluding the system will need higher employer contributions to reach long‑term funding targets. Cab Mac recommended pursuing up to 27.9% in phased employer contributions; the board asked for employer‑level economic‑impact figures.
Two independent actuarial assessments presented to the Public Employees Retirement System of Mississippi’s administrative committee found the 2024 valuation reasonable but concluded the system will require larger employer contributions to meet its long‑term funding goals.
Danny White of GRS, one of the independent reviewers, told the committee he and his team replicated the plan actuary’s results and “believe that the 2024 actuary evaluation for PERS is reasonable based on reasonable assumptions and methods and the report generally complies with actuarial standards of practice.” GRS reported a funded ratio close to the retained actuary’s calculation (GRS: 55.7%; Cab Mac: 55.9%) and said its own actuarially determined contribution (ADC) calculation matched closely.
The retained actuary from Cab Mac presented the board’s valuation, 30‑year projections and policy options. Cab Mac reported an ADC of 25.92% of payroll and said the system’s fixed contribution rate (FCR) that is phasing to 19.9% is below the ADC. In explaining the plan’s projections, the Cab Mac presenter recommended either paying the full ADC beginning July 1, 2026, or phasing larger employer increases — “increase the fixed contribution rate by 2% each year until it reaches 27.9%,” the presenter said — a step Cab Mac said would move the board’s metrics into green and raise the projected 2047 funded ratio toward the low‑90s.
Board members questioned the practical effects of such increases on state agencies, local governments and school districts. One board member asked whether the actuarial work had included the statutorily required economic impact analysis for each employer; staff said that analysis is part of the firms’ remaining scope and will be added to the draft reports before finalization. The committee repeatedly emphasized the need for employer‑level impact figures before lawmakers decide whether to implement higher contribution steps.
Presenters explained key technical choices behind the valuation. Both GRS and Cab Mac said they used forward‑looking economic assumptions rather than relying heavily on recent historical returns when setting the long‑term investment‑return assumption. The presentations noted that the assumed investment return was lowered from roughly 7.55% to 7.0% in the most recent experience study, a change that increases measured liabilities. Cab Mac also described how PERS smooths gains and losses over five years for its actuarial (smoothed) value of assets, which affects the yearly recognized return and short‑term funded‑ratio swings.
The board took two administrative votes early in the meeting: it approved the 2025 meeting schedule and certified the runoff election of Terrence Yarborough to a state‑employee representative seat. Those votes were carried by voice without roll‑call tallies recorded in the administrative committee transcript.
What’s next: staff and the actuarial firms will finalize the draft reports, including the employer‑level economic‑impact calculations required by statute, then present updated materials to the board and (as directed by the board) to the legislature. The committee agreed to resume deeper discussion of tiers, contribution mechanics and implementation details at upcoming sessions, with a fuller policy discussion scheduled for November.
