Jackson Jambalya had this excellent post yesterday on PERS. The post notes that PERS has structural problems because the ratio of active workers to retirees has fallen from 2.4 in 2006 to 1.6 in 2015. And:
The retirees keep growing and growing and growing. There were approximately 63,900 retirees in 2005. However, there were 96,300 retirees in 2015- an increase of roughly 50%. The rate of growth for ten years is 2,560 new retirees per year. However, that rate has jumped up to 3,440 new retirees per year for the last five years. That is why the funding level hasn’t recovered despite good returns in the market. It doesn’t matter how well PERS is managed if the number of employees retiring each year swamps the income received from investments….
It doesn’t matter how good the markets are to PERS or what the Wall Street Wizards can do if the retiree growth continues to swamp the returns. PERS can’t return to the desired funding level of 80% if it can’t manage the growing deficit. The markets came back five years ago for PERS but the funding level has not yet done so. That is the real story of PERS….
This growth in retirees makes PERS kind of like running on a treadmill moving faster than your pace. The net effect is backwards.
Kingfish also noted that there were $88 million in manager’s fees in the latest report. I suspect that number could be significantly reduced by better oversight of the system if the people running the system cared. But in a crony capitalism state like Mississippi, they may not.