Question

In a comprehensive fashion, present the various components of the state of Mississippi public retirement system. Explain the extent of its coverage and its membership. Explain how it is financed, how it pays benefits to its members. Dscuss its solvency. Provide your recommendations for long-term sustainability.

Answer 1

The Mississippi public retirement system provides retirement benefits to people working in public entities. It consists of different types of plans for different types of employees, as shown in the table below. The table shows the extent of membership of the system.

As on 2016, approximately 3 lakh people were registered under the plan.

It is financed through money contributed by employers and employees themselves towards their pension plan. Benefits are paid in the form of regular payments once they retire. Some plans under the system also provide other benefits in the form of life and health insurance while the employees are employed. Pensioners can also choose to invest their pension contributions to receive more money when they retire.

According to sources, the funded ratio of the system was 62 per cent in 2015. It had unfunded liabilities amounting to $ 65 lakh, reason being increasing number of beneficiaries with stagnant contributions.

Long term sustainability lies in encouraging employees to invest their contributions and discourage with drawls.