PERS; require employers to pay percentage of contract workers' compensation into the system.

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To: State Affairs
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Scott

HOUSE BILL NO. 45

AN ACT TO AMEND SECTION 25-11-123, MISSISSIPPI CODE OF 1972, 1
TO REQUIRE EACH EMPLOYER IN THE PUBLIC EMPLOYEES' RETIREMENT 2
SYSTEM THAT CONTRACTS WITH INDIVIDUALS TO PERFORM SERVICES FOR OR 3
ON BEHALF OF THE EMPLOYER AS A CONTRACT WORKER, CONTRACTUAL 4
EMPLOYEE OR INDEPENDENT CONTRACTOR TO PAY INTO THE EMPLOYER'S 5
ACCUMULATION ACCOUNT OF THE SYSTEM A CERTAIN PERCENTAGE OF THE 6
TOTAL COMPENSATION THAT IS PAID TO THE INDIVIDUAL UNDER THE 7
CONTRACT, IF THE SERVICES CONTRACTED FOR ARE SERVICES THAT ARE 8
TYPICALLY PERFORMED BY REGULAR EMPLOYEES OF THE EMPLOYER AND ARE 9
STILL BEING PERFORMED BY OR WERE FORMERLY PERFORMED BY ACTIVE 10
MEMBERS OF THE SYSTEM FOR OR ON BEHALF OF THE EMPLOYER; TO PROVIDE 11
THAT THE PERCENTAGE SHALL BE THE SAME AS THE EMPLOYER'S 12
CONTRIBUTION RATE THAT IS PAID ON ACCOUNT OF EACH MEMBER WHO 13
BECAME A MEMBER OF THE SYSTEM BEFORE MARCH 1, 2026; AND FOR 14
RELATED PURPOSES. 15
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 16
SECTION 1. Section 25-11-123, Mississippi Code of 1972, is 17
amended as follows: 18
25-11-123. All of the assets of the system shall be credited 19
according to the purpose for which they are held to one (1) of 20
four (4) reserves; namely, the annuity savings account, the 21
annuity reserve, the employer's accumulation account, and the 22
expense account; however, any employee who became a member of the 23
system on or after March 1, 2026, shall also have a defined 24
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contribution plan administered by the system, as provided in 25
Section 25-11-147. 26
(a) Annuity savings account. In the annuity savings 27
account shall be accumulated the contributions made by members to 28
provide for their annuities, including interest thereon which 29
shall be posted monthly. Credits to and charges against the 30
annuity savings account shall be made as follows: 31
(1) Beginning July 1, 2010, except as otherwise 32
provided in Section 25-11-126, the employer shall cause to be 33
deducted from the salary of each member on each and every payroll 34
of the employer for each and every payroll period nine percent 35
(9%) of earned compensation as defined in Section 25-11-103; 36
however, for any employee who became a member of the system on or 37
after March 1, 2026, only four percent (4%) of such earned 38
compensation shall be deposited into the annuity savings account, 39
with the remaining five percent (5%), to be deposited into the 40
employee's defined contribution account authorized in Section 41
25-11-147. Future contributions shall be fixed biennially by the 42
board on the basis of the liabilities of the retirement system for 43
the various allowances and benefits as shown by actuarial 44
valuation; however, any member earning at a rate less than Sixteen 45
Dollars and Sixty-seven Cents ($16.67) per month, or Two Hundred 46
Dollars ($200.00) per year, shall contribute not less than One 47
Dollar ($1.00) per month, or Twelve Dollars ($12.00) per year. 48
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(2) The deductions provided in paragraph (1) of 49
this subsection shall be made notwithstanding that the minimum 50
compensation provided by law for any member is reduced by the 51
deduction. Every member shall be deemed to consent and agree to 52
the deductions made and provided for in paragraph (1) of this 53
subsection and shall receipt for his full salary or compensation, 54
and payment of salary or compensation less the deduction shall be 55
a full and complete discharge and acquittance of all claims and 56
demands whatsoever for the services rendered by the person during 57
the period covered by the payment, except as to the benefits 58
provided under Articles 1 and 3. The board shall provide by rules 59
for the methods of collection of contributions from members and 60
the employer. The board shall have full authority to require the 61
production of evidence necessary to verify the correctness of 62
amounts contributed. 63
(b) Annuity reserve. The annuity reserve shall be the 64
account representing the actuarial value of all annuities in 65
force, and to it shall be charged all annuities and all benefits 66
in lieu of annuities, payable as provided in this article. If a 67
beneficiary retired on account of disability is restored to active 68
service with a compensation not less than his average final 69
compensation at the time of his last retirement, the remainder of 70
his contributions shall be transferred from the annuity reserve to 71
the annuity savings account and credited to his individual account 72
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therein, and the balance of his annuity reserve shall be 73
transferred to the employer's accumulation account. 74
(c) Employer's accumulation account. The employer's 75
accumulation account shall represent the accumulation of all 76
reserves for the payment of all retirement allowances and other 77
benefits payable from contributions made by the employer, and 78
against this account shall be charged all retirement allowances 79
and other benefits on account of members. Credits to and charges 80
against the employer's accumulation account shall be made as 81
follows: 82
(1) (i) On account of each member who became a 83
member of the system before March 1, 2026, there shall be paid 84
monthly into the employer's accumulation account by the employers 85
for the preceding fiscal year an amount equal to a certain 86
percentage of the total earned compensation, as defined in Section 87
25-11-103, of each member. From and after May 9, 2024, the 88
increase in the employer's contribution rate scheduled to take 89
effect on July 1, 2024, is rescinded and shall not take effect; 90
however, on July 1 of each year from 2024 through 2028, the 91
employer's contribution rate shall be increased by one-half 92
percent (1/2%). For each member who became a member of the system 93
on or after March 1, 2026, except as provided in Section 94
25-11-147, the employer's monthly payment under this paragraph (1) 95
shall be applied to the accrued liability contribution fund. 96
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(ii) Each employer that contracts with 97
individuals or contracts through a third party for individuals to 98
perform services for or on behalf of the employer as a contract 99
worker, contractual employee or independent contractor shall pay 100
into the employer's accumulation account an amount equal to a 101
certain percentage of the total compensation that is paid to the 102
individual or to the third party under the contract, if the 103
services contracted for are services that are typically performed 104
by regular employees of the employer and are still being performed 105
by or were formerly performed by active members of the system for 106
or on behalf of the employer. That percentage shall be the same 107
as the employer's contribution rate that is paid on account of 108
each member who became a member of the system before March 1, 109
2026, as provided in subparagraph (i) of this paragraph (1). This 110
subparagraph (ii) does not apply to any employee who is receiving 111
a retirement allowance and is employed after retirement and for 112
whom the employer is paying the employer's contribution on the 113
employee's compensation under Section 25-11-127(5). 114
(2) For the public good, any recommendation by the 115
board to adjust the employer contributions may be accompanied by 116
at least two (2) assessments from actuaries who are independent 117
from each other and the retirement plan. The actuaries shall 118
analyze the economic impact of any such recommendation to the 119
system and state, including, but not limited to, information 120
showing the fiscal impact to every agency and arm of the state, 121
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including, but not limited to, state agencies, cities, counties 122
and school districts. The actuarial assessments, with any such 123
recommendation to adjust the employer contributions, shall be 124
submitted to the Lieutenant Governor, Speaker of the House, 125
Chairman of the Senate Appropriations Committee and Chairman of 126
the House Appropriations Committee. 127
(3) The board shall have the authority to make 128
recommendations regarding additional funding sources for the 129
retirement plan, including employer contribution increases, based 130
on the assets and liabilities of the retirement plan, and the 131
analyses required by paragraph (2) of this subsection (c). The 132
Legislature shall have the sole authority to implement any such 133
recommendations. It is the intent of the Legislature that, in the 134
2025 Regular Session, a law be enacted to create a new tier for 135
future members of the system, in furtherance of the system's 136
continued financial stability and sustainability. 137
(4) This section shall not be construed to provide 138
authority to reduce or eliminate any earned benefits to be 139
provided by the state to persons who, before July 1, 2025, are 140
drawing a retirement allowance or are members of the system. 141
(5) On the basis of regular interest and of such 142
mortality and other tables as are adopted by the board of 143
trustees, the actuary engaged by the board to make each valuation 144
required by this article during the period over which the accrued 145
liability contribution is payable, immediately after making that 146
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valuation, shall determine the uniform and constant percentage of 147
the earnable compensation of each member which, if contributed by 148
the employer on the basis of compensation of the member throughout 149
his entire period of membership service, would be sufficient to 150
provide for the payment of any retirement allowance payable on his 151
account for that service. The percentage rate so determined shall 152
be known as the "normal contribution rate." After the accrued 153
liability contribution has ceased to be payable, the normal 154
contribution rate shall be the percentage rate of the salary of 155
all members obtained by deducting from the total liabilities on 156
account of membership service the amount in the employer's 157
accumulation account, and dividing the remainder by one percent 158
(1%) of the present value of the prospective future salaries of 159
all members as computed on the basis of the mortality and service 160
tables adopted by the board of trustees and regular interest. The 161
normal rate of contributions shall be determined by the actuary 162
after each valuation. 163
(6) The total amount payable in each year to the 164
employer's accumulation account shall not be less than the sum of 165
the percentage rate known as the "normal contribution rate" and 166
the "accrued liability contribution rate" of the total 167
compensation earnable by all members during the preceding year, 168
provided that the payment by the employer shall be sufficient, 169
when combined with the amounts in the account, to provide the 170
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allowances and other benefits chargeable to this account during 171
the year then current. 172
(7) The accrued liability contribution shall be 173
discontinued as soon as the accumulated balance in the employer's 174
accumulation account shall equal the present value, computed on 175
the basis of the normal contribution rate then in force, or the 176
prospective normal contributions to be received on account of all 177
persons who are at that time members. 178
(8) All allowances and benefits in lieu thereof, 179
with the exception of those payable on account of members who 180
receive no prior service credit, payable from contributions of the 181
employer, shall be paid from the employer's accumulation account. 182
(9) Upon the retirement of a member, an amount 183
equal to his retirement allowance shall be transferred from the 184
employer's accumulation account to the annuity reserve. 185
(10) The employer's accumulation account shall be 186
credited with any assets authorized by law to be credited to the 187
account. 188
(d) Expense account. The expense account shall be the 189
account to which the expenses of the administration of the system 190
shall be charged, exclusive of amounts payable as retirement 191
allowances and as other benefits provided herein. The Legislature 192
shall make annual appropriations in amounts sufficient to 193
administer the system, which shall be credited to this account. 194
There shall be transferred to the State Treasury from this 195
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account, not less than once per month, an amount sufficient for 196
payment of the estimated expenses of the system for the succeeding 197
thirty (30) days. Any interest earned on the expense account 198
shall accrue to the benefit of the system. However, 199
notwithstanding the provisions of Sections 25-11-15(10) and 200
25-11-105(f)(v)5, all expenses of the administration of the system 201
shall be paid from the interest earnings, provided the interest 202
earnings are in excess of the actuarial interest assumption as 203
determined by the board, and provided the present cost of the 204
administrative expense fee of two percent (2%) of the 205
contributions reported by the political subdivisions and 206
instrumentalities shall be reduced to one percent (1%) from and 207
after July 1, 1983, through June 30, 1984, and shall be eliminated 208
thereafter. 209
(e) Collection of contributions. The employer shall 210
cause to be deducted on each and every payroll of a member for 211
each and every payroll period, beginning subsequent to January 31, 212
1953, the contributions payable by the member as provided in 213
Articles 1 and 3. 214
The employer shall make deductions from salaries of employees 215
as provided in Articles 1 and 3 and shall transmit monthly, or at 216
such time as the board of trustees designates, the amount 217
specified to be deducted to the Executive Director of the Public 218
Employees' Retirement System. The executive director, after 219
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making a record of all those receipts, shall deposit such amounts 220
as provided by law. 221
(f) (1) The sum of the normal contribution rate and 222
the accrued liability contribution rate shall be known as the 223
"employer's contribution rate." 224
(2) The amount payable by the employer on account 225
of normal and accrued liability contributions shall be determined 226
by applying the employer's contribution rate to the amount of 227
compensation earned by employees who are members of the system. 228
Monthly, or at such time as the board of trustees designates, each 229
department or agency shall compute the amount of the employer's 230
contribution payable, with respect to the salaries of its 231
employees who are members of the system, and shall cause that 232
amount to be paid to the board of trustees from the personal 233
service allotment of the amount appropriated for the operation of 234
the department or agency, or from funds otherwise available to the 235
agency, for the payment of salaries to its employees. 236
(3) Except as otherwise provided in Section 237
25-11-106: 238
(i) Constables shall pay employer and 239
employee contributions on their net fee income as well as the 240
employee contributions on all direct treasury or county payroll 241
income. 242
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(ii) The county shall be responsible for the 243
employer contribution on all direct treasury or county payroll 244
income of constables. 245
(4) Except as otherwise provided in Section 246
25-11-106.1, chancery and circuit clerks shall be responsible for 247
both the employer and employee share of contributions on the 248
proportionate share of net income attributable to fees, as well as 249
the employee share of net income attributable to direct treasury 250
or county payroll income, and the employing county shall be 251
responsible for the employer contributions on the net income 252
attributable to direct treasury or county payroll income. 253
(5) Once each year, under procedures established 254
by the system, each employer shall submit to the Public Employees' 255
Retirement System a copy of their report to Social Security of all 256
employees' earnings. 257
(6) The board shall provide by rules for the 258
methods of collection of contributions of employers and members. 259
The amounts determined due by an agency to the various funds as 260
specified in Articles 1 and 3 are made obligations of the agency 261
to the board and shall be paid as provided herein. Failure to 262
deduct those contributions shall not relieve the employee and 263
employer from liability thereof. Delinquent employee 264
contributions and any accrued interest shall be the obligation of 265
the employee and delinquent employer contributions and any accrued 266
interest shall be the obligation of the employer. The employer 267
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ST: PERS; require employers to pay percentage
of contract workers' compensation into the
system.
may, in its discretion, elect to pay any or all of the interest on 268
delinquent employee contributions. From and after July 1, 1996, 269
under rules and regulations established by the board, all 270
employers are authorized and shall transfer all funds due to the 271
Public Employees' Retirement System electronically and shall 272
transmit any wage or other reports by computerized reporting 273
systems. 274
SECTION 2. This act shall take effect and be in force from 275
and after July 1, 2026. 276