If you are one of the lucky Mississippians who is required by law to contribute to "PERS" (Public Employees' Retirement System), your contribution is going up from 7.25% to 9.00% on July 1, 2010. On a salary of $30,000 per year, that translates into an additional $525 per year that comes out of your check.
Of course the reason for this increase is because the state of Mississippi is essentially "broke" and can't afford to pay those who are currently drawing state retirement. So, if you are ten years away from retirement... does PERS sound like a wise investment to you?
Anyone who works for the State (teachers and civil servants) knows that Mississippi salaries are among the lowest in the country. A 1.75% decrease in take-home pay is a significant hit to these employees, who have no option but to contribute to PERS.
In the private sector, where salaries are significantly higher, most employees can't afford to contribute more than 5% to an IRA or 401K... but at least they have the choice. The vesting schedule for the state is now 8 years! That's a long time to keep a job in a state that is essentially "broke".
Hold on employers... before you start smiling, YOUR contribution is also going up from 12.00% to 13.56%. However, because our Governor was worried about the economic "impact" this would have in our state, employers' rates won't go up until 2012. (It seems pretty clear that Haley is not too concerned about the "little" people.)
The legislature passed a number of other bills that restrict the benefits of PERS. If you are near retirement, you may want to check them out at www.pers.state.ms.us. It is always good to know what you won't be getting in the future!