MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Finance

By: Senator(s) Bryan, Smith, Lee, Stogner, Thames, Harvey, Ferris, Johnson (38th), Turner, Frazier, White (5th), Furniss, Jackson, Horhn, Posey

AN ACT TO AMEND SECTION 25-11-111, MISSISSIPPI CODE OF 1972, TO INCREASE THE PERCENTAGE THAT IS USED TO CALCULATE RETIREMENT BENEFITS FOR MEMBERS OF THE PUBLIC EMPLOYEES RETIREMENT SYSTEM WITH MEMBERSHIP SERVICE IN EXCESS OF TWENTY-FIVE YEARS; TO REQUIRE THE BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM TO USE THE INCREASED PERCENTAGE TO RECALCULATE THE BENEFITS OF RETIRED MEMBERS AND THEIR BENEFICIARIES; TO AMEND SECTION 25-11-112, MISSISSIPPI CODE OF 1972, TO REVISE THE CALCULATION OF THE ADDITIONAL ANNUAL BENEFIT FOR MEMBERS AND BENEFICIARIES OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM; TO PROVIDE THAT THE ADDITIONAL BENEFIT SHALL BE THE GREATER OF 4% OF THE RETIREMENT ALLOWANCE TIMES THE NUMBER OF FISCAL YEARS IN RETIREMENT THROUGH JUNE 30, 1998, OR THE SUM OF 3% OF THE RETIREMENT ALLOWANCE TIMES THE NUMBER OF FISCAL YEARS IN RETIREMENT BEFORE THE MEMBER REACHES AGE 62 PLUS 3% COMPOUNDED BY THE NUMBER OF FISCAL YEARS IN RETIREMENT BEGINNING WITH THE YEAR IN WHICH THE MEMBER REACHES AGE 62 TIMES THE RETIREMENT ALLOWANCE; TO PROVIDE THAT THE ADDITIONAL BENEFIT SHALL BE PAID IN ONE PAYMENT IN DECEMBER OF EACH YEAR TO THOSE PERSONS WHO ARE RECEIVING A RETIREMENT ALLOWANCE ON DECEMBER 1 OF THAT YEAR, UNLESS AN IRREVOCABLE ELECTION IS MADE TO HAVE THE BENEFIT PAID IN 12 EQUAL MONTHLY INSTALLMENTS; TO ALLOW MEMBERS AND BENEFICIARIES WHO ARE CURRENTLY RECEIVING THE ADDITIONAL ANNUAL PAYMENT IN MONTHLY INSTALLMENTS TO ELECT TO RECEIVE THE ADDITIONAL BENEFIT PROVIDED FOR UNDER THIS ACT IN ONE ADDITIONAL PAYMENT EACH YEAR; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 25-11-111, Mississippi Code of 1972, is amended as follows:

25-11-111. (a) Any member upon withdrawal from service upon or after attainment of the age of sixty (60) years who shall have completed at least four (4) years of creditable service, or any member upon withdrawal from service regardless of age who shall have completed at least twenty-five (25) years of creditable service, shall be entitled to receive a retirement allowance which shall begin on the first of the month following the date the member's application for the said allowance is received by the board, but in no event before withdrawal from service.

(b) Any member whose withdrawal from service occurs prior to attaining the age of sixty (60) years who shall have completed four (4) or more years of creditable service and shall not have received a refund of his accumulated contributions shall be entitled to receive a retirement allowance, beginning upon his attaining the age of sixty (60) years, of the amount earned and accrued at the date of withdrawal from service.

(c) Any member in service who has qualified for retirement benefits may select any optional method of settlement of retirement benefits by notifying the Executive Director of the Board of Trustees of the Public Employees' Retirement System in writing, on a form prescribed by the board, of the option he has selected and by naming the beneficiary of such option and furnishing necessary proof of age. Such option, once selected, may be changed at any time prior to actual retirement or death, but upon the death or retirement of the member, the optional settlement shall be placed in effect upon proper notification to the executive director.

(d) The annual amount of the retirement allowance shall consist of:

(1) A member's annuity which shall be the actuarial equivalent of the accumulated contributions of the member at the time of retirement computed according to the actuarial table in use by the system; and

(2) An employer's annuity which, together with the member's annuity provided above, shall be equal to one and seven-eighths percent (1-7/8%) of the average compensation for each year of state service up to and including twenty-five (25) years of membership service, and two and three-eights percent (2-3/8%) of the average compensation for each year of state service in excess of twenty-five (25) years of membership service.

(3) A prior service annuity equal to one and seven-eighths percent (1-7/8%) of the average compensation for each year of state service up to and including twenty-five (25) years of prior service, and two and three-eights percent (2-3/8%) of the average compensation for each year of state service in excess of twenty-five (25) years of prior service for which the member is allowed credit.

(4) Any retired member or beneficiary thereof who was eligible to receive a retirement allowance before July 1, 1991, and who is still receiving a retirement allowance on July 1, 1992, shall receive an increase in the annual retirement allowance of the retired member equal to one-eighth of one percent (1/8 of 1%) of the average compensation for each year of state service in excess of twenty-five (25) years of membership service up to and including thirty (30) years. The maximum increase shall be five-eighths of one percent (5/8 of 1%). In no case shall a member who has been retired prior to July 1, 1987, receive less than Ten Dollars ($10.00) per month for each year of creditable service and proportionately for each quarter year thereof. Persons retired on or after July 1, 1987, shall receive at least Ten Dollars ($10.00) per month for each year of service and proportionately for each quarter year thereof reduced for the option selected. However, such Ten Dollars ($10.00) minimum per month for each year of creditable service shall not apply to a retirement allowance computed under Section 25-11-114 based on a percentage of the member's average compensation.

(5) The board shall recalculate the retirement allowance of any member or the beneficiary of such a member, if such member or beneficiary is eligible to receive a retirement allowance before July 1, 1999, by using the criteria contained in paragraphs (2) and (3) of this subsection (d).

(6) Any member upon withdrawal from service upon or after attaining the age of sixty (60) years who has completed at least four (4) years of creditable service, or any member upon withdrawal from service regardless of age who has completed at least twenty-five (25) years of creditable service, shall be entitled to receive a retirement allowance computed in accordance with the formula set forth in this section. Such retirement allowance otherwise payable may be converted into a retirement allowance of equivalent actuarial value in such an amount that, with the member's benefit under Title II of the federal Social Security Act, the member will receive, so far as possible, approximately the same amount annually before and after the earliest age at which the member becomes eligible to receive a Social Security benefit.

(e) No member, except members excluded by the Age Discrimination in Employment Act Amendments of 1986 (Public Law 99-592), under either Article 1 or Article 3 in state service shall be required to retire because of age.

(f) No payment on account of any benefit granted under the provisions of this section shall become effective or begin to accrue until January 1, 1953.

(g) (1) A retiree or beneficiary may, on a form prescribed by and filed with the retirement system, waive all or a portion of any benefits from the retirement system to which the retiree or beneficiary is entitled. A retiree or beneficiary may revoke a waiver of benefits in the same manner as the original waiver was made. Such waiver shall be binding on the heirs and assigns of any retiree or beneficiary and the same must agree to forever hold harmless the Public Employees' Retirement System of Mississippi from any claim to such waived retirement benefits.

(2) Any waiver pursuant to this subsection shall apply only to the person executing the waiver and any beneficiary shall be entitled to benefits according to the option selected by the member at the time of retirement. However, a beneficiary may, at the option of the beneficiary, execute a waiver of benefits pursuant to this subsection.

(3) The retirement system shall retain in the annuity reserve account amounts that are not used to pay benefits because of a waiver executed under this subsection.

(4) The board of trustees may provide rules and regulations for the administration of waivers under this subsection.

SECTION 2. Section 25-11-112, Mississippi Code of 1972, is amended as follows:

25-11-112. (1) Any member who is receiving a retirement allowance for service or disability retirement, or any beneficiary thereof, who has received a monthly benefit for at least one (1) full fiscal year, shall be eligible to receive an additional benefit, on December 1 or July 1 of the year as provided in subsection (3) of this section, equal to the greater of the amounts calculated under paragraph (a) or (b) below:

(a) An amount equal to four percent (4%) of the annual retirement allowance multiplied by the number of full fiscal years in retirement through June 30, 1998; or

(b) The sum of:

(i) An amount equal to three percent (3%) of the annual retirement allowance multiplied by the number of full fiscal years in retirement before the end of the fiscal year in which the member reaches age sixty-two (62), plus

(ii) An additional amount equal to three percent (3%) compounded by the number of full fiscal years in retirement beginning with the fiscal year in which the member reaches age sixty-two (62), multiplied by the amount of the annual retirement allowance.

(2) The calculation of the beneficiary's additional benefit under subsection (1)(b)(i) or (1)(b)(ii) of this section shall be based on the member's age and full fiscal years in retirement as if the member had lived.

(3) The additional benefit provided for under this section shall be paid in one (1) payment in December of each year to those persons who are receiving a retirement allowance on December 1 of that year, unless an election is made under this subsection. Retired members or beneficiaries thereof who on July 1, 1999, or July 1 of any fiscal year thereafter, are receiving a retirement allowance, may elect by an irrevocable agreement in writing filed in the office of the Public Employees' Retirement System no less than thirty (30) days before July 1 of the appropriate year, to begin receiving the additional benefit provided for under this section in twelve (12) equal monthly installments beginning July 1, 1999, or July 1 of any fiscal year thereafter. This irrevocable agreement shall be binding on the member and subsequent beneficiaries. * * * Payment of those monthly installments shall not extend beyond the month in which a retirement allowance is due and payable. * * *

(4) The additional payment or payments provided for under this section are for the fiscal year in which they are paid.

(5) The amount provided for under subsection (1)(b)(ii) of this section is calculated using the following formula:

(6) Any retired member or beneficiary thereof who has previously elected to receive the additional annual payment in monthly installments may elect, upon application on a form prescribed by the board of trustees, to have that payment made in one (1) additional payment each year. This written election must be filed in the office of the Public Employees' Retirement System before June 1, 2000, and shall be effective for the fiscal year beginning July 1, 2000.

(7) In the event of death of a retired member or a beneficiary thereof who is receiving the additional annual payment in two (2) to six (6) monthly installments pursuant to an election made before July 1, 1999, and who would otherwise be eligible to receive the additional benefit provided for under this section in one (1) payment in December of the current fiscal year, any remaining amounts shall be paid in a lump sum to the designated beneficiary.

SECTION 3. This act shall take effect and be in force from and after July 1, 1999.