PERS; require any terminated plan to pay unfunded actuarial accrued liability to board in a lump sum before termination.
If enacted, SB2904 could enhance the fiscal responsibility of state and local government entities involved with the retirement plans. The requirement for a lump sum payment could assure that funds are available to cover the retirement benefits owed to retired or terminated employees, improving the financial stability of the retirement system. One potential consequence is that it may limit the ability of some entities to freely terminate their retirement plans without first settling their financial obligations, thus potentially leading to fewer terminations of these plans in the future.
Senate Bill 2904 aims to amend Section 25-11-105 of the Mississippi Code of 1972, impacting the state's Public Employees' Retirement System. The bill mandates that any terminated plans approved by the Board of Trustees must pay their share of the unfunded actuarial accrued liability in a lump sum prior to termination. This change is significant as it holds entities accountable for their financial obligations to the retirement system, effectively ensuring that there are no unfunded liabilities left after a plan's termination.
The general sentiment around SB2904 appears to be supportive among legislators concerned with maintaining the integrity of the retirement system and ensuring that public employees receive the benefits they have been promised. However, some may view this as an increased financial burden on local governments or entities that may struggle to come up with the lump sum payments, leading to debates on financial sustainability and the impacts on budget allocations.
Critics may argue that the bill's requirement for lump sum payments could disproportionately affect smaller local governments or entities with limited financial resources. The timing of these payments could also pose challenges, especially if local budgets are tight. Thus, the discussion surrounding SB2904 centers on balancing the need to protect employee benefits while considering the financial implications for governmental entities.