Legislators won’t be able to collect their public pension benefits while in office, according to guidance received by the Public Employees’ Retirement System of Mississippi from the U.S. Internal Revenue Service.
PERS received the letter from the IRS on May 7 and the IRS declined to rule on whether allowing legislators to collect their PERS benefits while serving as legislators. With the IRS decision, the board will have to reinstate the regulation that prohibits retirees from collecting their benefits while serving in the Legislature. The guidance is important since going against it could endanger the tax-exempt status of the PERS plan, which is a defined contribution pension plan that covers most state, municipal and county employees.
House Speaker Philip Gunn has said that having PERS retirees receive both their benefits and a legislative salary is double-dipping and refuses to reduce the pay of legislators who are also retirees. Two bills that would’ve allowed retirees to collect legislative pay ($10,000 per year plus per diem and mileage) died earlier this session. One would’ve allowed legislators to collect half their pay while collecting benefits, while the other would’ve allowed them to waive all or some of their salaries.
Two House members who are also PERS retirees have already resigned their seats, out of four who won seats in the last statewide elections. All were Republicans.
PERS retirees are not disallowed from running for legislative seats under the present system. They aren’t allowed to receive their retirement benefits as long as they’re in office and the reason for this is state law governing legislative pay. The language used for legislative pay is shall, a legal term that means something must be done.
In 2018, then-Attorney General Jim Hood released an opinion that said that a PERS retiree doesn’t forfeit their benefits if they were elected to the legislature and could receive both salary and pension benefits simultaneously. The opinion overrode a long-standing PERS regulation that prohibited state elected officials from receiving salaries and pension benefits.
AG opinions do not have the force of law, but can be used in court.
A later opinion issued in January 2019 by Hood clarified the issue and said that any retiree serving as an state elected official could do the same thing as those who go back to work for state agencies, where they could receive only one half of the salary and only be employed on a part-time basis.
PERS then released a regulation that was approved by the fund’s governing board in April 2019 that allowed legislators to collect their retirement and partial legislative pay.
The opinion also said that a retiree would require a 90-day break in service between when they retired from their state or local position and were elected to the legislature, unless an exception was allowed.
State law says that retirees can return to work at a state agency after a 90-day break in service on a part-time basis for half pay.
The legislature is considered a part-time position.
