Legislature-Sponsored Analysis Affirms Protection of Mississippi Retirees’ COLA

JACKSON, Miss. – The Mississippi Legislature funded an analysis that reaffirms the yearly cost of living adjustment (COLA), often called the 13th check, for state pension retirees cannot be reduced or taken away, Lt. Gov. Delbert Hosemann announced.

Hosemann’s office refused to release the full report from the Jones Walker Law Firm, citing attorney-client privilege. Instead, Hosemann issued a statement saying, “I have never veered publicly or privately from our commitment to employee and retiree benefits. I do not and will not support removing or changing the cost of living adjustment for these individuals.” He further explained that the Jones Walker law firm was hired to provide clarity on the legal standing of the COLA amid discussions about freezing it. The law firm confirmed that Mississippi law protects the COLA for employees and retirees.

Freezing the “13th Check”

Discussions have occurred over the years about freezing the annual 3% COLA to alleviate financial stress within the system. Many retirees choose to receive this increase as a lump sum, known as the 13th check, in December rather than having it spread throughout their monthly payments. The Joint Legislative Budget Committee, which Hosemann chaired until July 1, paid Jones Walker $8,500 to review the COLA’s legal standing, as noted on the Transparency Mississippi website.

A letter from Jones Walker on the Transparency Mississippi website outlines that the law firm “has been asked to advise you with regard for potential challenges in connection with a freeze or other adjustment to the COLA under PERS. Our engagement is limited to a review of and advise regarding this matter.”

Financial Viability of the System

PERS has about 360,000 members, including current public employees, retirees, and staff from various educational institutions and local governments. While the system has assets of approximately $32 billion, there have been concerns due to a $25 billion debt. These financial challenges have prompted periodic discussions about altering the COLA.

During an October meeting of the Joint Legislative Budget Committee, House Speaker Jason White and Senate President Pro Tem Dean Kirby inquired about potential reductions in the COLA. Both clarified that they were not advocating for reductions but seeking information. PERS Executive Director Ray Higgins stated that while the Board has explored the issue, historical and prevailing views suggest such changes are not permissible.

Throughout various meetings, Hosemann has consistently reiterated his commitment to maintaining the COLA. In March, he stated on social media, “To be very clear: I remain committed to protecting all of the retirement benefits of all of our retirees and our current employees.”

During the 2024 legislative session, the Legislature allocated approximately $110 million to the system, though some argued this amount was insufficient. Additionally, legislation was passed to transfer significant authority from the PERS board to the Legislature while simultaneously reaffirming the protection of PERS benefits, including the COLA. The bill explicitly states it “shall not be construed to provide authority to reduce or eliminate any earned benefits to be provided by the state” to PERS members.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.