HB1590_H_Amend

SECTION 1. Section 25-11-15, Mississippi Code of 1972, is amended as follows:

25-11-15. (1) Board of trustees: The general administration and responsibility for the proper operation of the Public Employees' Retirement System and the federal-state agreement and for making effective the provisions of Articles 1 and 3 are vested in a board of trustees.

(2) (a) The board shall consist of * * * ~~ten (10)~~ eleven (11) trustees, as follows:

( * * *ai) The State Treasurer;

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(ii) The Commissioner of Revenue;

(iii) Four (4) members appointed by the Governor;

(iv) Three (3) members appointed by the Lieutenant Governor;

(v) One (1) retired member who is receiving a retirement allowance from the system, elected by the retired members or beneficiaries receiving a retirement allowance from the system and by the retired members or beneficiaries of the municipal systems, the firemen's and policemen's disability and relief funds and the Mississippi Highway Safety Patrol Retirement System administered by the board of trustees; and

(vi) One (1) member of the system having at least ten (10) years of creditable service, elected by the members of the system, the municipal systems and the Mississippi Highway Safety Patrol Retirement System.

(b) (i) For the terms beginning July 1, 2024, the appointed trustees shall serve terms of the following lengths: two (2) appointees of the Governor shall serve for an initial term ending on July 1, 2025; one (1) appointee of the Lieutenant Governor shall serve for an initial term ending on July 1, 2026; one (1) appointee of the Governor and one (1) appointee of the Lieutenant Governor shall serve for an initial term ending on July 1, 2027; and one (1) appointee of the Governor and one (1) appointee of the Lieutenant Governor shall serve for an initial term ending on July 1, 2028. After the expiration of the initial terms, their successors shall be appointed for terms of four (4) years from the expiration date of the previous term.

(ii) All appointments for the initial terms shall be made no later than May 31, 2024.

(iii) Each appointee of the Governor and the Lieutenant Governor shall be a person with knowledge and understanding of the investment of financial assets and of the principles of a retirement plan, as either a participant or an employer, and shall not have a conflict of interest with any plan administered by the board.

(iv) Two (2) of the members to be appointed by the Governor shall be appointed only after consideration of recommendations for those appointments made by the Speaker of the House to the Governor. Two (2) of the members to be appointed by the Lieutenant Governor shall be appointed only after consideration of recommendations for those appointments made by the Speaker of the House to the Lieutenant Governor.

(v) All appointments by the Governor and the Lieutenant Governor shall be subject to the advice and consent of the Senate. Members appointed when the Senate is not in session shall serve only until the end of the next regular session, unless confirmed by the Senate.

( * * *hc) (i) In the * * * ~~first~~ election to be held for trustees whose terms begin July 1, 2024, one (1) member shall be elected for a term * * * ~~of two (2) years,~~ ending on July 1, 2026; and one (1) member shall be elected for a term * * * ending on July 1, 2028. Thereafter, their successors shall be elected for terms of * * * ~~six (6)~~ four (4) years from the expiration date of the previous term. All elections shall be held in accordance with rules and regulations adopted by the board to govern those elections, and the board shall be the sole judge of all questions arising incident to or connected with the elections.

( * * *iii) The election for trustees whose terms begin July 1, 2024, shall be held no later than May 31, 2024, with any necessary runoffs occurring no later than June 21, 2024. Any person eligible to vote for the election of a * * * ~~member of the board of trustees~~ trustee and who meets the qualifications for the office may seek election to the office and serve if elected. For purposes of determining eligibility to seek office as a member of the board * * * ~~of trustees~~, the required creditable service in "the system" shall include each system administered by the board * * * ~~of trustees~~ in which the person is a member.

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(3) The trustees serving on the effective date of this act shall retain their positions through June 30, 2024. On July 1, 2024, the new members shall assume their positions.

( * * *34) If a vacancy occurs in the office of a trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled. However, if the unexpired term of an elected member is six (6) months or less, an election shall be held to fill the office vacated for the next succeeding full term of office, and the person so elected to fill the next full term shall be appointed by the board to fill the remainder of the unexpired term. Whenever any member who is elected to a position to represent a class of members ceases to be a member of that class, that board member is no longer eligible for membership on the board. The position shall be declared vacant, and the unexpired term shall be filled in the same manner as the office was previously filled.

( * * *45) Each trustee shall, within ten (10) days after his or her appointment or election, take an oath of office as provided by law and, in addition, shall take an oath that he or she will diligently and honestly administer the affairs of the board, and that he or she will not knowingly violate or willingly permit to be violated any of the provisions of law applicable to Articles 1 and 3. The oath shall be signed by the member making it, certified by the officer before whom it is taken, and immediately filed in the office of the Secretary of State.

( * * *56) Each trustee shall be entitled to one (1) vote. Six (6) members shall constitute a quorum at any meeting of the board, and a majority of those present shall be necessary for a decision.

( * * *67) Subject to the limitations of Articles 1 and 3, the board shall establish rules and regulations for the administration of the system created by those articles and for the transaction of its business, and to give force and effect to the provisions of those articles wherever necessary to carry out the intent and purposes of the Legislature. The cited articles are remedial law and shall be liberally construed to accomplish their purposes.

( * * *78) Notwithstanding any other law to the contrary, in the event of a natural disaster or other occurrence that results in the failure of the retirement system's computer system or a significant disruption of the normal activities of the retirement system, the executive director of the board, or his or her deputy, shall be authorized to contract with another entity, governmental or private, during the period of the failure or disruption, for services, commodities, work space and supplies as necessary to carry out the administration of all systems and programs administered by the board. The board shall be authorized to pay the reasonable cost of those services, commodities, work space and supplies. At the meeting of the board next following the execution of a contract authorized under this subsection, documentation of the contract, including a description of the services, commodities, work space or supplies, the price thereof and the nature of the disaster or occurrence, shall be presented to the board and placed on the minutes of the board. Because of their emergency nature, purchases made under this subsection shall not be required to comply with the provisions of Section 31-7-13 or any other law governing public purchases.

( * * *89) The computer equipment and software owned by the Public Employees' Retirement System are assets of the Trust Fund by virtue of the Constitution, Section 272-A and acquisition and operation thereof shall be under the jurisdiction of the Public Employees' Retirement System.

( * * *910) The board shall elect a chairman and shall by a majority vote of all of its members appoint a secretary whose title shall be executive director, who shall serve at the will and pleasure of the board, who shall not be a member of the board of trustees, who shall be entitled to membership in the system, and who shall act as secretary of the board. The board of trustees shall employ such actuarial, investment, clerical and other employees as are required to transact the business of the system, and shall fix the compensation of all employees, subject to the rules and regulations of the State Personnel Board.

( * * *1011) Each member of the board shall receive as compensation for his or her services Three Hundred Dollars ($300.00) per month. All members of the board shall be reimbursed for their necessary traveling expenses, which shall be paid in accordance with the requirements of Section 25-3-41 or other applicable statutes with respect to traveling expenses of state officials and employees on official business. All members of the board shall be entitled to be members of the system and shall be entitled to creditable service for all time served as a member of the board, except for the retired * * * ~~members~~ member, who shall not be entitled to be a member of the system and who shall be eligible to receive the retirement allowance and compensation for services from the system while serving as a member of the board. Members of the board who are employed in state service (as defined in Section 25-11-103) shall not be required to take annual leave from their state service employment while performing his or her official duties as a member of the board.

( * * *1112) All expenses of the board incurred in the administration of Articles 1 and 3 shall be paid from such funds as may be appropriated by the Legislature for that purpose or from administrative fees collected from political subdivisions or juristic entities of the state. Each political subdivision of the state and each instrumentality of the state or of a political subdivision or subdivisions that submit a plan for approval by the board as provided in Section 25-11-11 shall reimburse the board, for coverage into the administrative expense fund, its pro rata share of the total expense of administering Articles 1 and 3 as provided by regulations of the board.

( * * *1213) The Lieutenant Governor may designate two (2) Senators and the Speaker of the House of Representatives may designate two (2) Representatives to attend any meeting of the Board of Trustees of the Public Employees' Retirement System. The appointing authorities may designate alternate members from their respective houses to serve when the regular designees are unable to attend the meetings of the board. The legislative designees shall have no jurisdiction or vote on any matter within the jurisdiction of the board. For attending meetings of the board, the legislators shall receive per diem and expenses, which shall be paid from the contingent expense funds of their respective houses in the same amounts as provided for committee meetings when the Legislature is not in session; however, no per diem and expenses for attending meetings of the board will be paid while the Legislature is in session. No per diem and expenses will be paid except for attending meetings of the board without prior approval of the proper committee in their respective houses.

SECTION 2. Section 25-11-123, Mississippi Code of 1972, is amended as follows:

25-11-123. All of the assets of the system shall be credited according to the purpose for which they are held to one (1) of four (4) reserves; namely, the annuity savings account, the annuity reserve, the employer's accumulation account, and the expense account.

(a) Annuity savings account. In the annuity savings account shall be accumulated the contributions made by members to provide for their annuities, including interest thereon which shall be posted monthly. Credits to and charges against the annuity savings account shall be made as follows:

(1) Beginning July 1, 2010, the employer shall cause to be deducted from the salary of each member on each and every payroll of the employer for each and every payroll period nine percent (9%) of earned compensation as defined in Section 25-11-103. Future contributions shall be fixed biennially by the board on the basis of the liabilities of the retirement system for the various allowances and benefits as shown by actuarial valuation; however, any member earning at a rate less than Sixteen Dollars and Sixty-seven Cents ($16.67) per month, or Two Hundred Dollars ($200.00) per year, shall contribute not less than One Dollar ($1.00) per month, or Twelve Dollars ($12.00) per year.

(2) The deductions provided in paragraph (1) of this subsection shall be made notwithstanding that the minimum compensation provided by law for any member is reduced by the deduction. Every member shall be deemed to consent and agree to the deductions made and provided for in paragraph (1) of this subsection and shall receipt for his full salary or compensation, and payment of salary or compensation less the deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by the person during the period covered by the payment, except as to the benefits provided under Articles 1 and 3. The board shall provide by rules for the methods of collection of contributions from members and the employer. The board shall have full authority to require the production of evidence necessary to verify the correctness of amounts contributed.

(b) Annuity reserve. The annuity reserve shall be the account representing the actuarial value of all annuities in force, and to it shall be charged all annuities and all benefits in lieu of annuities, payable as provided in this article. If a beneficiary retired on account of disability is restored to active service with a compensation not less than his average final compensation at the time of his last retirement, the remainder of his contributions shall be transferred from the annuity reserve to the annuity savings account and credited to his individual account therein, and the balance of his annuity reserve shall be transferred to the employer's accumulation account.

(c) Employer's accumulation account. The employer's accumulation account shall represent the accumulation of all reserves for the payment of all retirement allowances and other benefits payable from contributions made by the employer, and against this account shall be charged all retirement allowances and other benefits on account of members. Credits to and charges against the employer's accumulation account shall be made as follows:

(1) On account of each member there shall be paid monthly into the employer's accumulation account by the employers for the preceding fiscal year an amount equal to a certain percentage of the total earned compensation, as defined in Section 25-11-103, of each member. The percentage rate of those contributions shall be fixed biennially by the board on the basis of the liabilities of the retirement system for the various allowances and benefits as shown by actuarial valuation. * * * Political subdivisions joining Article 3 of the Public Employees' Retirement System after July 1, 1968, may adjust the employer's contributions by agreement with the Board of Trustees of the Public Employees' Retirement System to provide service credits for any period before execution of the agreement based upon an actuarial determination of employer's contribution rates. From and after the effective date of this act, the increase in the employer's contribution rate that is scheduled to take effect on July 1, 2024, is rescinded and shall not take effect, and the board shall not provide for any increase in the employer's contribution rate through June 30, 2024.

(2) On the basis of regular interest and of such mortality and other tables as are adopted by the board of trustees, the actuary engaged by the board to make each valuation required by this article during the period over which the accrued liability contribution is payable, immediately after making that valuation, shall determine the uniform and constant percentage of the earnable compensation of each member which, if contributed by the employer on the basis of compensation of the member throughout his entire period of membership service, would be sufficient to provide for the payment of any retirement allowance payable on his account for that service. The percentage rate so determined shall be known as the "normal contribution rate." After the accrued liability contribution has ceased to be payable, the normal contribution rate shall be the percentage rate of the salary of all members obtained by deducting from the total liabilities on account of membership service the amount in the employer's accumulation account, and dividing the remainder by one percent (1%) of the present value of the prospective future salaries of all members as computed on the basis of the mortality and service tables adopted by the board of trustees and regular interest. The normal rate of contributions shall be determined by the actuary after each valuation.

(3) The total amount payable in each year to the employer's accumulation account shall not be less than the sum of the percentage rate known as the "normal contribution rate" and the "accrued liability contribution rate" of the total compensation earnable by all members during the preceding year, provided that the payment by the employer shall be sufficient, when combined with the amounts in the account, to provide the allowances and other benefits chargeable to this account during the year then current.

(4) The accrued liability contribution shall be discontinued as soon as the accumulated balance in the employer's accumulation account shall equal the present value, computed on the basis of the normal contribution rate then in force, or the prospective normal contributions to be received on account of all persons who are at that time members.

(5) All allowances and benefits in lieu thereof, with the exception of those payable on account of members who receive no prior service credit, payable from contributions of the employer, shall be paid from the employer's accumulation account.

(6) Upon the retirement of a member, an amount equal to his retirement allowance shall be transferred from the employer's accumulation account to the annuity reserve.

(7) The employer's accumulation account shall be credited with any assets authorized by law to be credited to the account.

(d) Expense account. The expense account shall be the account to which the expenses of the administration of the system shall be charged, exclusive of amounts payable as retirement allowances and as other benefits provided herein. The Legislature shall make annual appropriations in amounts sufficient to administer the system, which shall be credited to this account. There shall be transferred to the State Treasury from this account, not less than once per month, an amount sufficient for payment of the estimated expenses of the system for the succeeding thirty (30) days. Any interest earned on the expense account shall accrue to the benefit of the system. However, notwithstanding the provisions of Sections 25-11-15(10) and 25-11-105(f)(v)5, all expenses of the administration of the system shall be paid from the interest earnings, provided the interest earnings are in excess of the actuarial interest assumption as determined by the board, and provided the present cost of the administrative expense fee of two percent (2%) of the contributions reported by the political subdivisions and instrumentalities shall be reduced to one percent (1%) from and after July 1, 1983, through June 30, 1984, and shall be eliminated thereafter.

(e) Collection of contributions. The employer shall cause to be deducted on each and every payroll of a member for each and every payroll period, beginning subsequent to January 31, 1953, the contributions payable by the member as provided in Articles 1 and 3.

The employer shall make deductions from salaries of employees as provided in Articles 1 and 3 and shall transmit monthly, or at such time as the board of trustees designates, the amount specified to be deducted to the Executive Director of the Public Employees' Retirement System. The executive director, after making a record of all those receipts, shall deposit such amounts as provided by law.

(f) (1) Upon the basis of each actuarial valuation provided herein, the board of trustees shall biennially determine the normal contribution rate and the accrued liability contribution rate as provided in this section. The sum of these two (2) rates shall be known as the "employer's contribution rate." * * * The percentage rate of those contributions shall be fixed biennially by the board on the basis of the liabilities of the retirement system for the various allowances and benefits as shown by actuarial valuation.

(2) The amount payable by the employer on account of normal and accrued liability contributions shall be determined by applying the employer's contribution rate to the amount of compensation earned by employees who are members of the system. Monthly, or at such time as the board of trustees designates, each department or agency shall compute the amount of the employer's contribution payable, with respect to the salaries of its employees who are members of the system, and shall cause that amount to be paid to the board of trustees from the personal service allotment of the amount appropriated for the operation of the department or agency, or from funds otherwise available to the agency, for the payment of salaries to its employees.

(3) Except as otherwise provided in Section 25-11-106:

(i) Constables shall pay employer and employee contributions on their net fee income as well as the employee contributions on all direct treasury or county payroll income.

(ii) The county shall be responsible for the employer contribution on all direct treasury or county payroll income of constables.

(4) Except as otherwise provided in Section 25-11-106.1, chancery and circuit clerks shall be responsible for both the employer and employee share of contributions on the proportionate share of net income attributable to fees, as well as the employee share of net income attributable to direct treasury or county payroll income, and the employing county shall be responsible for the employer contributions on the net income attributable to direct treasury or county payroll income.

(5) Once each year, under procedures established by the system, each employer shall submit to the Public Employees' Retirement System a copy of their report to Social Security of all employees' earnings.

(6) The board shall provide by rules for the methods of collection of contributions of employers and members. The amounts determined due by an agency to the various funds as specified in Articles 1 and 3 are made obligations of the agency to the board and shall be paid as provided herein. Failure to deduct those contributions shall not relieve the employee and employer from liability thereof. Delinquent employee contributions and any accrued interest shall be the obligation of the employee and delinquent employer contributions and any accrued interest shall be the obligation of the employer. The employer may, in its discretion, elect to pay any or all of the interest on delinquent employee contributions. From and after July 1, 1996, under rules and regulations established by the board, all employers are authorized and shall transfer all funds due to the Public Employees' Retirement System electronically and shall transmit any wage or other reports by computerized reporting systems.

SECTION 3. This act shall take effect and be in force from and after its passage.