The Trillion Dollar Gap: Mississippi
Underfunded State Retirement Systems and the Roads to Reform
Mississippi 's management of its long-term pension liability is cause for serious concern and needs to improve how it handles its retiree health care and other benefit obligations. It has funded only 73 percent of its total pension bill—below the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts—and faces an unfunded liability of $8 billion, 30 percent greater than the payroll of its pension plan members.
To its credit, the state in 10 of the past 12 years has funded at least 99 percent of its actuarially required contribution. In 2007, Mississippi increased the eligibility requirement for retirement benefits for new members of the Public Employees' Retirement System, including raising the vesting period for these hires from four to eight years.
While Mississippi has relatively limited liabilities for retiree health care and other benefits—$570 million—it, like 19 other states, has failed to contribute any funds to cover these long-term costs.