Mississippi Public Employees' Retirement System, Jackson, should lower its annual rate of return assumption to 7.5% from 8%, according to a report issued Wednesday by Gov. Haley Barbour's Public Employees' Retirement System Study Commission.
The report, “Recommendations on Ways to Strengthen the State's Retirement Plan,” agrees with the recommendation of the $18.2 billion system's actuary, Cavanaugh McDonald Consulting, to lower the return assumption.
The system's 10-year investment return as of June 30 was an annualized 5.41%.
The commission also recommends the system's board of trustees should more regularly review its investment policy and that the board hire a consultant to analyze whether the system should create another defined contribution plan option or hybrid option to see “whether Mississippi public employees would benefit from more retirement plan options.”
Also recommended was an analysis of the system's governance structure, including the makeup of the board of trustees and whether there's a need for a comprehensive risk management review of the system.
Mr. Barbour established the commission by executive order in August to review the public pension program and “offer recommendations to protect its solvency for future generations.” The committee includes members of the state government, business and legal community and non-voting members of the Legislature, according to the report.
Pat Robertson, executive director of the retirement system, could not be reached for comment.