Mississippi PERS Opposes Bill to Change Board, Deny Employer Contribution Increase

Legislation passed by the Mississippi House of Representatives would flip the pension’s board from mostly elected by members to mostly appointed by government officials.

The Public Employees’ Retirement System of Mississippi on Sunday announced its opposition to a bill in the state legislature that would eliminate an employer-contribution increase the board had approved and would also drastically change the make-up of the PERS Board of Trustees.

Currently, eight of PERS’ 10 board members are elected by members of the pension fund, joining the state treasurer and one PERS member appointed by the governor. The proposed legislation would reduce the number of elected officials to two out of 11.

House Bill 1590, passed by the Mississippi House of Representatives on March 13, would increase the total number of board seats to 11. The number of board members directly appointed by the governor would increase to four from one, and the number of members appointed by the lieutenant governor would increase to three from zero. No qualifications are laid out in the bill for those seven appointments, in contrast to very specific qualifications laid out in the bill’s original text and for other appointments. In addition to the state treasurer, the 11th member would be the Mississippi Commissioner of Revenue, also appointed by the governor.

The bill moved to the Mississippi Senate for consideration and was referred on March 14 to the state Senate’s Government Structure Committee, which was created in January and is in its first session. The state legislative session runs through early May.

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The current governor of Mississippi is Tate Reeves, a Republican, who began serving in 2020 and was re-elected to a second term in November 2023.

In a press release, PERS called the bill an attempt to politicize the PERS system.

“This change would indirectly shift more power to politicians, in effect turning control over to the governor and lieutenant governor, especially since all appointments would be with advice and consent of the Senate,” the release stated.

According to PERS, replacing the board with government appointees would result in a loss of institutional knowledge and continuity.

Additionally, House Bill 1590 would undo the board’s plans to increase the pension employer contribution rate to 22.4% from 17.4%. “By rejecting the Board’s proposed rate increase, this approach not only would jeopardize the membership, it would also hurt all taxpayers,” the PERS release stated in response to the measure. “The longer the plan goes without proper funding, the more it costs and the harder it gets, leaving future citizens with the liability.”

The pension system had a funded status of 56.1%, as of June 30, 2023. The fund has one-, three-, five- and 10-year annualized returns of 7.76%, 9.36%, 7.63% and 8.47%, respectively.

PERS managed about $31.6 billion in assets, as of June 30, 2023. According to the release, 10% of Mississippi’s population are members or beneficiaries of PERS, representing 300,000 members.

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Tags: Legislation, Mississippi, Mississippi Public Employees’ Retirement System (PERS), Pensions

A lack of capital spending in mining such ‘transition metals’ as copper, nickel and lithium is linked to chaotic prices, the research firm says.

Chaotic prices in so-called “transition metals,” needed for the planned worldwide transition to renewable energy, have led to flagging capital spending for the minerals, according to BCA Research.

Oversupply of these metals—copper, lithium and nickel, among others—has produced a falloff in capital expenditures to mine them, says Robert Ryan, BCA’s chief commodity and energy strategist, in an interview. “Miners are not investing, but demand will double for them by 2035,” he warns.

Too much of the metals was mined and refined in recent times, and a negative outlook for the world economy has tamped down funds to keep up production, a reaction Ryan finds shortsighted.

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Take copper, a key industrial metal necessary for building out the electric grid to accommodate increased need for power and a component for manufacturing in general. Its price has shot up 27% since its recent low in mid-2022, but that has slowed to merely a 5% increase over the past 12 months.

BCA found, in a report Ryan authored, that traders expect “a weak macroeconomic backdrop” in the near future. This belief has translated into flat capex for copper this year. Mining companies, for their part, are pulling back on capex due to their surge in spending that started 10 years ago to meet what they expected to be an ongoing Chinese expansion. But the pandemic squelched once-booming Chinese economic growth.

Meanwhile, lithium and nickel, used for batteries in electric vehicles, have experienced declining prices, down over the past 12 months by 50% and 18%, respectively. This comes amid a slowdown in growth projections for EVs, with automakers including Ford Motor and General Motors, have been lowered. In China, the EV sales leader, growth in January and February slowed to 18.2%, from 20.8% for all of 2023.

“Massive over-capacity in the lithium and nickel markets, where huge ramp-ups of investment in mining and refining leaves markets with supply overhangs, will take years to roll off,” the BCA report stated. That situation will be even more acute “if current tensions between the EU and China over EV dumping result in tariffs or a trade war,” it added.

The capital certainly exists to back increased deployment in these metals. Commodities make up only a small portion of most allocators’ portfolios, comprising just 2.3% of U.S. public pension holdings. But that likely could increase in the future. The California State Teachers’ Retirement System is embarking on a big commitment to propelling the transition. Although commodities have endured drooping prices in general lately, some institutional investors retain faith in them. For instance, the Indiana Public Retirement System, while not espousing any climate-oriented investing goals, has a 10% stake in commodities, on the theory they have a bright future.

The Energy Transitions Commission, a study group looking for ways to facilitate the energy transition, declares that 6.5 billion tons of these raw materials will be needed to meet transition goals by 2050. Demand for these materials will quadruple by 2040, per a Brookings Institution report.

With that in mind, not everyone is slowing capital spending nowadays for transition metals. Microsoft founder Bill Gates and Amazon founder Jeff Bezos are funding a mining company, KoBold Metals, that just found a huge copper deposit in Zambia. By the time it starts producing—full production is potential as soon as 2032—perhaps the global funding problems will be over.