MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Appropriations
By: Representatives Mayo, Brown (20th), White
AN ACT TO AUTHORIZE ANY PERSON WHO IS INITIALLY EMPLOYED IN STATE SERVICE ON OR AFTER JULY 1, 2013, TO ELECT NOT TO BECOME A MEMBER OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND INSTEAD PROVIDE FOR HIS OR HER RETIREMENT NEEDS BY MAKING CONTRIBUTIONS INTO THE DEFERRED COMPENSATION PROGRAM; TO AUTHORIZE ANY PERSON WHO IS AN ACTIVE MEMBER OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM ON JUNE 30, 2013, AND WHO CONTINUES IN STATE SERVICE AFTER THAT DATE TO ELECT TO DISCONTINUE ACTIVE MEMBERSHIP IN THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THEREAFTER PROVIDE FOR HIS OR HER RETIREMENT NEEDS BY MAKING CONTRIBUTIONS INTO THE DEFERRED COMPENSATION PROGRAM; TO PROVIDE THAT AN ELECTION IS IRREVOCABLE AFTER IT HAS BEEN MADE; TO PROVIDE THAT THE EMPLOYER OF EACH PERSON WHO MAKES AN ELECTION AUTHORIZED UNDER THIS ACT SHALL MATCH THE PERSON'S CONTRIBUTIONS TO THE DEFERRED COMPENSATION PROGRAM UP TO THE PERCENTAGE OF THE EMPLOYEE'S CONTRIBUTION THAT IS MADE BY MEMBERS OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM; TO PROVIDE THAT THE EMPLOYER ALSO SHALL CONTRIBUTE AN AMOUNT EQUAL TO TWO AND ONE-HALF PERCENT OF THE PERSON'S EARNED COMPENSATION TO THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM FOR THE ACCRUED LIABILITY CONTRIBUTION FUND; TO AMEND SECTIONS 25-11-105, 25-11-117 AND 25-14-11, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING PROVISIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Any person who is initially employed in state service on or after July 1, 2013, who is eligible for membership in the Public Employees' Retirement System may elect not to become a member of the system and instead provide for his or her retirement needs by making contributions into the deferred compensation program established under Section 25-14-1 et seq.
(2) An election authorized under this section must be made not later than thirty (30) days after the person's first day of employment in state service. The election must be made in writing and filed with the Board of Trustees of the Public Employees' Retirement System, and will be effective as of the date of the person's employment. If a person fails to timely make an election provided in this section, he or she shall become a member of the system as of the date of the person's employment. An election made under this section is irrevocable after it has been made. However, if a person who made an election leaves state service for more than one (1) year and later returns to employment in state service, the person will have the opportunity to make another election under this section, not later than thirty (30) days after the person's first day of later employment in state service, that applies to the person's later employment.
(3) The employer of each person who makes an election authorized under this section shall pay to the deferred compensation program to the credit of the person a percentage of the person's earned compensation that is equal to the percentage of the person's earned compensation that the person contributes to the deferred compensation program, not to exceed the percentage of the employee's contribution that is made by members of the Public Employees' Retirement System. In addition, the employer shall contribute to the system an amount equal to two and one-half percent (2-1/2%) of the person's earned compensation for the accrued liability contribution fund.
SECTION 2. (1) Any person who is an active member of the Public Employees' Retirement System on June 30, 2013, and who continues in state service after that date may elect to discontinue active membership in the system and thereafter provide for his or her retirement needs by making contributions into the deferred compensation program established under Section 25-14-1 et seq.
(2) An election authorized under this section must be made not later than June 30, 2014. The election must be made in writing and filed with the Board of Trustees of the Public Employees' Retirement System, and will be effective on the first day of the month following receipt of the written election by the board of trustees. An election made under this section is irrevocable after it has been made. However, if a person who made an election leaves state service for more than one (1) year and later returns to employment in state service, the person will have the opportunity to make another election under this section, not later than thirty (30) days after the person's first day of later employment in state service, that applies to the person's later employment.
(3) The employer of each person who makes an election authorized under this section shall pay to the deferred compensation program to the credit of the person a percentage of the person's earned compensation that is equal to the percentage of the person's earned compensation that the person contributes to the deferred compensation program, not to exceed the percentage of the employee's contribution that is made by members of the Public Employees' Retirement System. In addition, the employer shall contribute to the system an amount equal to two and one-half percent (2-1/2%) of the person's earned compensation for the accrued liability contribution fund.
(4) Any person who makes an election authorized under this section may (i) leave in the Public Employees' Retirement System the accumulated contributions that he or she made to the system before the effective date of the election, (ii) receive a refund of the amount of his or her accumulated contributions, in the manner provided in Section 25-11-117; or (iii) have an eligible rollover distribution of his or her accumulated contributions paid directly to the deferred compensation program, an eligible retirement plan or an individual retirement account, in the manner provided in Section 25-11-117.
SECTION 3. Section 25-11-105, Mississippi Code of 1972, is amended as follows:
25-11-105. I. THOSE WHO ARE ELIGIBLE FOR MEMBERSHIP
The membership of this retirement system shall be composed as follows:
(a) (i) All persons
who become employees in the state service after January 31, 1953, and whose
wages are subject to payroll taxes and are lawfully reported on IRS Form W-2,
except those specifically excluded, or * * *
those to whom election is provided in Articles 1 and 3, or those who
make an election under Section 1 or 2 of this act to be excluded, shall
become members of the retirement system as a condition of their employment. Those
who make an election under Section 2 of this act to be excluded from membership
shall not be considered to be active members of the system from and after the
effective date of the election, but shall not be authorized to receive any
benefits from the system until they have withdrawn from state service.
(ii) From and after July 1, 2002, any individual who is employed by a governmental entity to perform professional services shall become a member of the system if the individual is paid regular periodic compensation for those services that is subject to payroll taxes, is provided all other employee benefits and meets the membership criteria established by the regulations adopted by the board of trustees that apply to all other members of the system; however, any active member employed in such a position on July 1, 2002, will continue to be an active member for as long as they are employed in any such position.
(b) All persons who
become employees in the state service after January 31, 1953, except those
specifically excluded, or * * *
those to whom election is provided in Articles 1 and 3, or those who
make an election under Section 1 or 2 of this act to be excluded, unless
they file with the board before the lapse of sixty (60) days of employment or
sixty (60) days after the effective date of the cited articles, whichever is
later, on a form prescribed by the board, a notice of election not to be covered
by the membership of the retirement system and a duly executed waiver of all
present and prospective benefits that would otherwise inure to them on account
of their participation in the system, shall become members of the retirement
system * * *.
Those who make an election under Section 2 of this act to be excluded from
membership shall not be considered to be active members of the system from and
after the effective date of the election, but shall not be authorized to
receive any benefits from the system until they have withdrawn from state
service. However, no credit for prior service will be granted to members
who became members of the system before July 1, 2007, until they have
contributed to Article 3 of the retirement system for a minimum period of at
least four (4) years, or to members who became members of the system on or
after July 1, 2007, until they have contributed to Article 3 of the retirement
system for a minimum period of at least eight (8) years. Those members shall
receive credit for services performed before January 1, 1953, in employment now
covered by Article 3, but no credit shall be granted for retroactive services
between January 1, 1953, and the date of their entry into the retirement
system, unless the employee pays into the retirement system both the employer's
and the employee's contributions on wages paid him during the period from
January 31, 1953, to the date of his becoming a contributing member, together
with interest at the rate determined by the board of trustees. Members
reentering after withdrawal from service shall qualify for prior service under
the provisions of Section 25-11-117. From and after July 1, 1998, upon
eligibility as noted above, the member may receive credit for such retroactive
service provided:
(i) The member shall furnish proof satisfactory to the board of trustees of certification of that service from the covered employer where the services were performed; and
(ii) The member shall pay to the retirement system on the date he or she is eligible for that credit or at any time thereafter before the date of retirement the actuarial cost for each year of that creditable service. The provisions of this subparagraph (ii) shall be subject to the limitations of Section 415 of the Internal Revenue Code and regulations promulgated under Section 415.
Nothing contained in this paragraph (b) shall be construed to limit the authority of the board to allow the correction of reporting errors or omissions based on the payment of the employee and employer contributions plus applicable interest.
(c) All persons who become employees in the state service after January 31, 1953, and who are eligible for membership in any other retirement system shall become members of this retirement system as a condition of their employment, unless they elect at the time of their employment to become a member of that other system.
(d) All persons who are employees in the state service on January 31, 1953, and who are members of any nonfunded retirement system operated by the State of Mississippi, or any of its departments or agencies, shall become members of this system with prior service credit unless, before February 1, 1953, they file a written notice with the board of trustees that they do not elect to become members.
(e) All persons who are employees in the state service on January 31, 1953, and who under existing laws are members of any fund operated for the retirement of employees by the State of Mississippi, or any of its departments or agencies, shall not be entitled to membership in this retirement system unless, before February 1, 1953, any such person indicates by a notice filed with the board, on a form prescribed by the board, his individual election and choice to participate in this system, but no such person shall receive prior service credit unless he becomes a member on or before February 1, 1953.
(f) Each political subdivision of the state and each instrumentality of the state or a political subdivision, or both, is authorized to submit, for approval by the board of trustees, a plan for extending the benefits of this article to employees of any such political subdivision or instrumentality. Each such plan or any amendment to the plan for extending benefits thereof shall be approved by the board of trustees if it finds that the plan, or the plan as amended, is in conformity with such requirements as are provided in Articles 1 and 3; however, upon approval of the plan or any such plan previously approved by the board of trustees, the approved plan shall not be subject to cancellation or termination by the political subdivision or instrumentality, except that any community hospital serving a municipality that joined the Public Employees' Retirement System as of November 1, 1956, to offer social security coverage for its employees and later extended retirement annuity coverage to its employees as of December 1, 1965, may, upon documentation of extreme financial hardship, have future retirement annuity coverage cancelled or terminated at the discretion of the board of trustees. No such plan shall be approved unless:
(i) It provides that all services that constitute employment as defined in Section 25-11-5 and are performed in the employ of the political subdivision or instrumentality, by any employees thereof, shall be covered by the plan, with the exception of municipal employees who are already covered by existing retirement plans; however, those employees in this class may elect to come under the provisions of this article;
(ii) It specifies the source or sources from which the funds necessary to make the payments required by paragraph (d) of Section 25-11-123 and of paragraph (f)(v)2 and 3 of this section are expected to be derived and contains reasonable assurance that those sources will be adequate for that purpose;
(iii) It provides for such methods of administration of the plan by the political subdivision or instrumentality as are found by the board of trustees to be necessary for the proper and efficient administration thereof;
(iv) It provides that the political subdivision or instrumentality will make such reports, in such form and containing such information, as the board of trustees may from time to time require;
(v) It authorizes the board of trustees to terminate the plan in its entirety in the discretion of the board if it finds that there has been a failure to comply substantially with any provision contained in the plan, the termination to take effect at the expiration of such notice and on such conditions as may be provided by regulations of the board and as may be consistent with applicable federal law.
1. The board of trustees shall not finally refuse to approve a plan submitted under paragraph (f), and shall not terminate an approved plan without reasonable notice and opportunity for hearing to each political subdivision or instrumentality affected by the board's decision. The board's decision in any such case shall be final, conclusive and binding unless an appeal is taken by the political subdivision or instrumentality aggrieved by the decision to the Circuit Court of the First Judicial District of Hinds County, Mississippi, in accordance with the provisions of law with respect to civil causes by certiorari.
2. Each political subdivision or instrumentality as to which a plan has been approved under this section shall pay into the contribution fund, with respect to wages (as defined in Section 25-11-5), at such time or times as the board of trustees may by regulation prescribe, contributions in the amounts and at the rates specified in the applicable agreement entered into by the board.
3. Every political subdivision or instrumentality required to make payments under paragraph (f)(v)2 of this section is authorized, in consideration of the employees' retention in or entry upon employment after enactment of Articles 1 and 3, to impose upon its employees, as to services that are covered by an approved plan, a contribution with respect to wages (as defined in Section 25-11-5) not exceeding the amount provided in Section 25-11-123(d) if those services constituted employment within the meaning of Articles 1 and 3, and to deduct the amount of the contribution from the wages as and when paid. Contributions so collected shall be paid into the contribution fund as partial discharge of the liability of the political subdivisions or instrumentalities under paragraph (f)(v)2 of this section. Failure to deduct the contribution shall not relieve the employee or employer of liability for the contribution.
4. Any state agency, school, political subdivision, instrumentality or any employer that is required to submit contribution payments or wage reports under any section of this chapter shall be assessed interest on delinquent payments or wage reports as determined by the board of trustees in accordance with rules and regulations adopted by the board and delinquent payments, assessed interest and any other amount certified by the board as owed by an employer, may be recovered by action in a court of competent jurisdiction against the reporting agency liable therefor or may, upon due certification of delinquency and at the request of the board of trustees, be deducted from any other monies payable to the reporting agency by any department or agency of the state.
5. Each political subdivision of the state and each instrumentality of the state or a political subdivision or subdivisions that submit a plan for approval of the board, as provided in this section, shall reimburse the board for coverage into the expense account, its pro rata share of the total expense of administering Articles 1 and 3 as provided by regulations of the board.
(g) The board may, in its discretion, deny the right of membership in this system to any class of employees whose compensation is only partly paid by the state or who are occupying positions on a part-time or intermittent basis. The board may, in its discretion, make optional with employees in any such classes their individual entrance into this system.
(h) An employee whose membership in this system is contingent on his own election, and who elects not to become a member, may thereafter apply for and be admitted to membership; but no such employee shall receive prior service credit unless he becomes a member before July 1, 1953, except as provided in paragraph (b).
(i) If any member of this system changes his employment to any agency of the state having an actuarially funded retirement system, the board of trustees may authorize the transfer of the member's creditable service and of the present value of the member's employer's accumulation account and of the present value of the member's accumulated membership contributions to that other system, provided that the employee agrees to the transfer of his accumulated membership contributions and provided that the other system is authorized to receive and agrees to make the transfer.
If any member of any other actuarially funded system maintained by an agency of the state changes his employment to an agency covered by this system, the board of trustees may authorize the receipt of the transfer of the member's creditable service and of the present value of the member's employer's accumulation account and of the present value of the member's accumulated membership contributions from the other system, provided that the employee agrees to the transfer of his accumulated membership contributions to this system and provided that the other system is authorized and agrees to make the transfer.
(j) Wherever state employment is referred to in this section, it includes joint employment by state and federal agencies of all kinds.
(k) Employees of a political subdivision or instrumentality who were employed by the political subdivision or instrumentality before an agreement between the entity and the Public Employees' Retirement System to extend the benefits of this article to its employees, and which agreement provides for the establishment of retroactive service credit, and who became members of the retirement system before July 1, 2007, and have remained contributors to the retirement system for four (4) years, or who became members of the retirement system on or after July 1, 2007, and have remained contributors to the retirement system for eight (8) years, may receive credit for that retroactive service with the political subdivision or instrumentality, provided that the employee and/or employer, as provided under the terms of the modification of the joinder agreement in allowing that coverage, pay into the retirement system the employer's and employee's contributions on wages paid the member during the previous employment, together with interest or actuarial cost as determined by the board covering the period from the date the service was rendered until the payment for the credit for the service was made. Those wages shall be verified by the Social Security Administration or employer payroll records. Effective July 1, 1998, upon eligibility as noted above, a member may receive credit for that retroactive service with the political subdivision or instrumentality provided:
(i) The member shall furnish proof satisfactory to the board of trustees of certification of those services from the political subdivision or instrumentality where the services were rendered or verification by the Social Security Administration; and
(ii) The member shall pay to the retirement system on the date he or she is eligible for that credit or at any time thereafter before the date of retirement the actuarial cost for each year of that creditable service. The provisions of this subparagraph (ii) shall be subject to the limitations of Section 415 of the Internal Revenue Code and regulations promulgated under Section 415.
Nothing contained in this paragraph (k) shall be construed to limit the authority of the board to allow the correction of reporting errors or omissions based on the payment of employee and employer contributions plus applicable interest. Payment for that time shall be made in increments of not less than one-quarter (1/4) year of creditable service beginning with the most recent service. Upon the payment of all or part of the required contributions, plus interest or the actuarial cost as provided above, the member shall receive credit for the period of creditable service for which full payment has been made to the retirement system.
(l) Through June 30, 1998, any state service eligible for retroactive service credit, no part of which has ever been reported, and requiring the payment of employee and employer contributions plus interest, or, from and after July 1, 1998, any state service eligible for retroactive service credit, no part of which has ever been reported to the retirement system, and requiring the payment of the actuarial cost for that creditable service, may, at the member's option, be purchased in quarterly increments as provided above at the time that its purchase is otherwise allowed.
(m) All rights to purchase retroactive service credit or repay a refund as provided in Section 25-11-101 et seq. shall terminate upon retirement.
II. THOSE WHO ARE NOT ELIGIBLE FOR MEMBERSHIP
The following classes of employees and officers shall not become members of this retirement system, any other provisions of Articles 1 and 3 to the contrary notwithstanding:
(a) Patient or inmate help in state charitable, penal or correctional institutions;
(b) Students of any state educational institution employed by any agency of the state for temporary, part-time or intermittent work;
(c) Participants of Comprehensive Employment and Training Act of 1973 (CETA) being Public Law 93-203, who enroll on or after July l, 1979;
(d) From and after July 1, 2002, individuals who are employed by a governmental entity to perform professional service on less than a full-time basis who do not meet the criteria established in I(a)(ii) of this section.
III. TERMINATION OF MEMBERSHIP
Membership in this system shall cease by a member withdrawing his accumulated contributions, or by a member withdrawing from active service with a retirement allowance, or by a member's death.
SECTION 4. Section 25-11-117, Mississippi Code of 1972, is amended as follows:
25-11-117. (1) A member may be paid a refund of the amount of accumulated contributions to the credit of the member in the annuity savings account, provided that the member has withdrawn from state service and has not returned to state service on the date the refund of the accumulated contributions would be paid. That refund of the contributions to the credit of the member in the annuity savings account shall be paid within ninety (90) days from receipt in the office of the retirement system of the properly completed form requesting the payment. In the event of death before retirement of any member whose spouse and/or children are not entitled to a retirement allowance, the accumulated contributions to the credit of the deceased member in the annuity savings account shall be paid to the designated beneficiary on file in writing in the office of the executive director of the board of trustees within ninety (90) days from receipt of a properly completed form requesting the payment. If there is no such designated beneficiary on file for the deceased member in the office of the system, upon the filing of a proper request with the board, the contributions to the credit of the deceased member in the annuity savings account shall be refunded under Section 25-11-117.1(1). The payment of the refund shall discharge all obligations of the retirement system to the member on account of any creditable service rendered by the member before the receipt of the refund. By the acceptance of the refund, the member shall waive and relinquish all accrued rights in the system.
(2) Under the Unemployment Compensation Amendments of 1992 (Public Law 102-318 (UCA)), a member or the spouse of a member who is an eligible beneficiary entitled to a refund under this section may elect, on a form prescribed by the board under rules and regulations established by the board, to have an eligible rollover distribution of accumulated contributions payable under this section paid directly to an eligible retirement plan, as defined under applicable federal law, or an individual retirement account. If the member or the spouse of a member who is an eligible beneficiary makes that election and specifies the eligible retirement plan or individual retirement account to which the distribution is to be paid, the distribution will be made in the form of a direct trustee-to-trustee transfer to the specified eligible retirement plan. A nonspouse beneficiary may elect to have an eligible rollover distribution paid in the form of a direct trustee-to-trustee transfer to an individual retirement account established to receive the distribution on behalf of the nonspouse beneficiary. Flexible rollovers under this subsection shall not be considered assignments under Section 25-11-129.
(3) (a) If any person who became a member of the system before July 1, 2007, has received a refund, reenters the state service and again becomes a member of the system, the member may repay all or part of the amounts previously received as a refund, together with regular interest covering the period from the date of refund to the date of repayment; however, the amounts that are repaid by the member and the creditable service related thereto shall not be used in any benefit calculation or determination until the member has remained a contributor to the system for a period of at least four (4) years after the member's reentry into state service. Repayment for that time shall be made in increments of not less than one-quarter (1/4) year of creditable service beginning with the most recent service for which refund has been made. Upon the repayment of all or part of that refund and interest, the member shall again receive credit for the period of creditable service for which full repayment has been made to the system.
(b) If any person who became a member of the system on or after July 1, 2007, has received a refund, reenters the state service and again becomes a member of the system, the member may repay all or part of the amounts previously received as a refund, together with regular interest covering the period from the date of refund to the date of repayment; however, the amounts that are repaid by the member and the creditable service related thereto shall not be used in any benefit calculation or determination until the member has remained a contributor to the system for a period of at least eight (8) years after the member's reentry into state service. Repayment for that time shall be made in increments of not less than one-quarter (1/4) year of creditable service beginning with the most recent service for which refund has been made. Upon the repayment of all or part of that refund and interest, the member shall again receive credit for the period of creditable service for which full repayment has been made to the system.
(4) (a) In order to provide a source of income to members who have applied for disability benefits under Section 25-11-113 or 25-11-114, the board may provide, at the employee's election, a temporary benefit to be paid from the member's accumulated contributions, if any, without forfeiting the right to pursue disability benefits, provided that the member has exhausted all personal and medical leave and has terminated his or her employment. The board may prescribe rules and regulations for carrying out the provisions of this subsection (4).
(b) If a member who has elected to receive temporary benefits under this subsection later applies for a refund of his or her accumulated contributions, all amounts paid under this subsection shall be deducted from the accumulated contributions and the balance will be paid to the member. If a member who has elected to receive temporary benefits under this subsection is later approved for a disability retirement allowance, and a service retirement allowance or survivor benefits are paid on the account, the board shall adjust the benefits in such a manner that no more than the actuarial equivalent of the benefits to which the member or beneficiary was or is entitled shall be paid.
(c) The board may study, develop and propose a disability benefit structure, including short- and long-term disability benefits, provided that it is the actuarial equivalent of the benefits currently provided in Section 25-11-113 or 25-11-114.
(5) Any member who, under the provisions of Section 2 of this act, requests a refund of the amount of his or her accumulated contributions, or requests to have an eligible rollover distribution of his or her accumulated contributions paid directly to the deferred compensation program, an eligible retirement plan or an individual retirement account, is not required to withdraw from state service in order to receive the refund or have a rollover distribution made under this section.
SECTION 5. Section 25-14-11, Mississippi Code of 1972, is amended as follows:
25-14-11. The deferred compensation program established by this chapter shall exist and serve in addition to other retirement, pension, or benefit systems established by the State of Mississippi, state agencies, counties, municipalities, or other political subdivisions. The deferred compensation program established by this chapter shall not supersede, make inoperative, or reduce any benefits provided by the Public Employees' Retirement System of Mississippi, by the Teachers' Retirement System of Mississippi, by programs established under the general municipal employees' retirement act, or by any other retirement, pension, or benefit program established by law. However, for any person who has made an election provided for under Section 1 or 2 of this act, the benefits that the person receives under the deferred compensation program are in lieu of the benefits that the person would otherwise receive from the Public Employees' Retirement System.
SECTION 6. Sections 1 and 2 of this act shall be codified as new sections in Article 3, Chapter 11, Title 25 of the Mississippi Code of 1972.
SECTION 7. This act shall take effect and be in force from and after July 1, 2013.