MSBA Board of Directors supports PSRS plan

A plan to help keep the state’s Public School and Education Employee Retirement Systems on solid financial footing has the support of the MSBA Board of Directors. The plan would modify the Cost of Living Adjustments in the plan to provide a 2% annual COLA adjustment to retirees regardless of the inflation rate, except if the inflation rate exceeds 5% when the COLA would become 5% as required by law. The plan would allow contribution rates for both the employee and school districts to be stabilized at 14.5% for PSRS employees and 13.72% for PEERS employees. The proposal would maintain the current benefit structure for retirees, active members and new hires. The MSBA Board of Directors passed the following sense-of-the –board statement at its July 16 meeting in Columbia after a presentation by PSRS/PEERS Executive Director Steve Yoakum: “The MSBA Board of Directors sees the 2% Cost of Living Adjustment option as a positive move to protect the PSRS/PEERS system. MSBA encourages the PSRS/PEERS Board to continue to aggressively explore options to fully fund the retirement system, as well as close loopholes that threaten the integrity of the system.” Yoakum told the MSBA Board the plan is the best way to keep contribution rates for both school districts and employees from rising to unacceptable levels. “The plan establishes a shared commitment between both active and retired members for the future stability of the system,” he said. Yoakum said another option would be to create a so-called “Tier II” plan that would include reduced benefits for new hires and an increase in the age of retirement eligibility. But he said that idea has little support right now. Yoakum is seeking comment from education organizations about the proposal before it goes to the PSRS/PEERS Board of Trustees for a vote on August 29.