For thousands of public employees across Mississippi—teachers, municipal workers, law enforcement officers, and state agency staff—the Public Employees’ Retirement System of Mississippi (PERS) plays a central role in retirement planning. But while PERS provides a valuable pension benefit, it’s not the whole picture.
In this article, we break down the basics of PERS, explore related retirement plans like the Optional Retirement Plan (ORP) and Mississippi Deferred Compensation (MDC), and outline key strategies to help you build a stronger, more flexible retirement plan.
Understanding Mississippi PERS
Mississippi PERS is a defined benefit plan, meaning your retirement income is based on a formula—not your investment performance. The benefit formula is:
Years of Service × 2.0% × Final Average Compensation = Annual Benefit
Your Final Average Compensation (FAC) is the average of your four highest consecutive years of salary out of the last ten. You’re eligible for full retirement at:
- Age 60 with at least 8 years of service, or
- Any age with 30 years of service
To learn more about the structure and governance of the plan, visit the official PERS of Mississippi website.
As of 2024:
- Employees contribute 9.00% of their salary
- Employers contribute 17.40%
While this provides guaranteed lifetime income, it’s important to remember that PERS may not replace your entire working income, especially if you retire early, switch careers, or don’t reach 30 years of service.
Other Mississippi Retirement Plans You Should Know
In addition to PERS, there are other retirement systems and savings programs that apply to specific types of public employees:
1. Optional Retirement Plan (ORP) – 401(a)
Designed for faculty and select employees of Mississippi’s public universities, the ORP is a defined contribution plan—similar to a 401(k). Contributions go into an individual account that you manage, typically with investment choices provided by a third-party vendor.
This plan offers more portability for those who do not plan to stay in public education long-term, but it lacks the guaranteed income of PERS.
More on ORP can be found through your university HR department or the official website.
2. Mississippi Deferred Compensation Plan (MDC) – 457(b)
MDC is a voluntary retirement savings plan available to many public employees. It allows you to save pre-tax dollars in addition to your pension. You can also opt for a Roth (after-tax) contribution.
The plan is administered by Empower Retirement and gives participants more flexibility and control over their savings. Learn more about the plan at the MDC Program Page.
3. MHSPS, SLRP, and Other Specialized Plans
- Mississippi Highway Safety Patrol Retirement System (MHSPRS): A defined benefit plan specifically for members of the state highway patrol.
- Supplemental Legislative Retirement Plan (SLRP): Covers members of the state legislature and the lieutenant governor, offering additional benefits on top of PERS for eligible officials.
These plans have unique rules, eligibility requirements, and benefit structures. If you’re in one of these systems, reviewing your account statement and benefit summary regularly is essential.
Key Considerations for PERS Members and Other Plan Participants
1. Your Pension Likely Won’t Be Enough on Its Own
While PERS is generous, it was never intended to fully replace your pre-retirement income. Consider supplementing it with:
- MDC 457(b) plan contributions
- Roth or Traditional IRAs
- Spousal retirement accounts or other household savings
2. Understand Your Payout Options
PERS retirees must choose one of several benefit payout options:
- Maximum benefit (no survivor)
- Option 2/3/4 (reduced benefit with survivor protection)
This decision is irrevocable and should be modeled out carefully based on your family, spouse’s age, and retirement income needs.
3. Taxes and Healthcare Planning
- Mississippi does not tax PERS retirement benefits, but federal taxes still apply
- Consider how you’ll cover healthcare costs before age 65 if you retire early
- Review how Social Security combined with PERS and ORP or other retirement savings will impact control over taxes in retirement.
Building a Complete Retirement Strategy
Whether you’re in PERS, ORP, MHSPRS, or contributing to MDC, your pension or savings plan is just one part of a successful retirement.
A complete strategy should include:
- Personalized income modeling
- Ongoing tax planning
- Withdrawal strategies across accounts
- Contingency planning for survivors, healthcare, and inflation
Find out how we help people prepare for retirement here.
Let’s Make Sure Your Retirement Is on Track
At Cinder Wealth Advisors, we work with people across Mississippi to build retirement strategies that go beyond the pension. Whether you’re mid-career, nearing retirement, or evaluating ORP vs. PERS, we’ll help you create a plan with clarity and confidence.
Schedule a consultation today to take a second look at how your Mississippi retirement benefits fit into your bigger picture.
