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PERS outlines Tier 5 hybrid retirement plan and employer reporting steps ahead of March 1, 2026
Summary
The Public Employees Retirement System of Mississippi briefed employers on Tier 5, a hybrid retirement plan created by House Bill 1 that takes effect March 1, 2026. Employers were told to split employee contributions (4% to PERS, 5% to Empower), complete mandatory trainings, and meet an April 7, 2026 reporting deadline for new hires.
Davetta Lee, PERS compliance counsel and director of defined contribution plans, told employers the session was intended to explain "the employer's role in enrolling and submitting contributions and reports to PERS, and separately to Empower for new PERS members." The law creating the new Tier 5 was passed as House Bill 1 and takes effect March 1, 2026.
Lee summarized how Tier 5 will work for employees hired on or after March 1: "Hybrid plan members will contribute a mandatory 9% of their salary," she said, and "4% will be directed to PERS for the defined benefit component, and 5% will be remitted to Empower for the defined contribution component." Employers must report and remit both the PERS (DB) and Empower (DC) amounts each month.
On benefits and vesting, Lee said the Tier 5 pension formula uses a 1% multiplier on average compensation and that the plan will use a "high‑8" (highest eight consecutive years) to calculate average compensation instead of the current "high‑4". She said Tier 5 members are eligible to retire at age 62 vested or with 35 years of service at any age, and that the DB portion retains an eight‑year vesting requirement while the DC portion is immediately vested: "they're immediately vested in that portion of this retirement plan," she said.
Lee reviewed restrictions that differ from earlier tiers: Tier 5 participants will not receive service credit for unused personal or medical leave, may not purchase out‑of‑state service or professional leave, and refunded members who return on or after March 1, 2026 cannot repurchase refunded time. She also said the plan contains no guaranteed cost‑of‑living adjustment (COLA); the legislature may grant additional annual benefits in particular years but COLA is not assured by the plan language.
Mason Frantom, deputy director of member and employer services at PERS, explained employer responsibilities and supports. He said PERS has posted a Tier 5 information page and the slides at www.pers.ms.gov and has created a tier lookup tool in myPERS to help identify Tier 5 employees. Mandatory trainings (video and live support) will be available in December 2025 and January 2026, with a support and troubleshooting period in February 2026.
Frantom reiterated the timing and reporting deadline: "03/01/2026 is when Tier 5 active employees" are effective for reporting, and "the deadline for the first month to report those new employees is... 04/07/2026." He advised employers that myPERS DB reporting will see minimal changes but that employers will need to add separate reporting and remittance for Empower for the DC portion. PERS set up a dedicated implementation email (tier5dbsupport@pers.ms.gov) and an implementation listserv for agency reporting contacts.
Shannon Dice, relationship manager for Empower Retirement, said Empower will service the 401(a) plan and use the same client services team that supports Mississippi Deferred Comp. He described a streamlined enrollment model ("no enrollment forms" for some workflows), plan service center and file‑sharing options for payroll vendors such as ADP or Paychex, and an Empower implementation alias (empowertier5dcsupport@empower.com). Dice said Empower will default participants into a target retirement date fund based on age at 65 but participants can change investment selections at any time.
PERS emphasized employers should continue to report legacy Tier 1–4 employees as before; the Tier 5 requirements apply only to hires and returning refunded members on or after March 1, 2026. Lee also noted that House Bill 1 allows employers to elect to make additional employer contributions to the DC portion, which will require separate participation agreements and documentation.
Next steps: employers were asked to complete a brief survey and to register staff responsible for payroll reporting for the mandatory trainings. PERS and Empower representatives said they will provide continued technical support during implementation and invited employers to use the provided email aliases and the PERS Tier 5 webpage for additional details and copies of the presentation slides.
The webinar closed with presenters standing by for questions and a reminder that the first reporting deadline for new Tier 5 employees is April 7, 2026.
