/Public retirees likely to lose ability to serve in Legislature without losing retirement benefits

Public retirees likely to lose ability to serve in Legislature without losing retirement benefits

The Public Employees Retirement System Board requested an IRS ruling to determine whether the board’s decision could have a negative impact on the federal tax exempt status. This could have serious consequences for the system as well as its members. In 2019, the board voted to amend its regulation to allow public retirees to participate in the Legislature and receive their pension in the same way as in other states like Florida. The IRS was required to approve the board’s decision. The IRS sent a letter to the PERS Board early May. It stated: “In this instance, we have determined that it is not possible to issue a ruling based upon the facts of the matter involved.” PERS officials simply referenced the letter, and said that the matter would be brought up by the governing board at its next meeting on June 23. The House leadership believes that the IRS ruling, or the lack thereof, means that the PERS Board must reverse its ruling allowing public retirementes to serve as legislators and to draw their pension. Otherwise, they could lose their tax exempt status. Philip Gunn (R-Clinton), House Speaker, stated that “my understanding of the issue was the absence of an IRS endorsement changes everything.” House Pro Tem Jason White (R-West) agreed that it would put the tax exempt status the plan in danger. He stated that if a request is made but not granted, it is the same as saying that you cannot do this.” The House leadership opposed the regulation change to allow public pensioners to service and receive their pensions from the beginning. Gunn claimed that the PERS changes were inconsistent with state law. PERS regulations have prevented public employees from being elected to the Legislature or drawing their pension for years. In late 2018, the former Attorney General Jim Hood made an opinion, based on an election question. He stated that public employees can serve in the Legislature and receive their pension so long as they only receive a portion of their legislative salary. Retirees of public employees can already work part-time for other government agencies. Hood ruled that they should also be allowed to serve as legislators. Four public retirees, all Republicans, were elected to the House in 2019. They expected to draw their pension and receive partial legislative pay. Despite the PERS regulation change, the House leadership refused to lower the salaries of the four members. They were therefore not eligible to receive retirement income. Ramona Blackledge (ex-Jones County tax assessor/collector) and Billy Andrews (ex-Lamar County judge) have already resigned from their legislative seats. Two of the other members, Jerry Darnell from DeSoto County, and Dale Goodin from Richton, who are both retired educators, continue to serve and will be able to forgo their monthly retirement benefits. Goodin stated that “it will eventually be solved.” “You cannot continue to take away people’s rights.” Goodin and other public servants argue that allowing them to draw and serve their pensions takes away a right they have that other retirees, such as those from the private sector. The regulation was amended by PERS board members with the understanding that the IRS might not approve of the change. Retired public workers in other states can still serve in their legislatures, without being penalized by IRS. This year, the four elected officials stated to Mississippi Today that they don’t understand why Mississippi is different. According to Florida law, a retired state employee can, in effect, be a member of the Legislature. This is in addition to the provision that Florida law provides that “any retired state employee currently drawing retirement benefits under any State Retirement System may, as any other citizen serve in the Legislature without any affect in any way his retirement status or the receipts of retirement funds while he or she is a member of Congress.” The retirement system in Mississippi contributes 9 percent of employees’ salaries for retirement benefits. PERS data shows that the average benefit for more than 100,000 people receiving benefits is more than $23,100 per year. More than 300,000 people are either receiving benefits or contributing to the public employee retirement system.