New state workers can retire after 30 years again, and retirees can come back sooner

PERS, the Public Employees’ Retirement System, is the pension plan for state employees such as teachers and first responders, WDAM reported. In 2025 the Legislature created Tier 5 for anyone hired after March 1, 2026, requiring 35 years of service for full benefits and making the plan a hybrid defined contribution plan instead of a defined benefit plan, Mississippi Today reported. A defined benefit plan promises a set monthly check; a defined contribution plan builds an account. This law cuts the service requirement back to 30 years and bases benefits on an employee’s highest four years of pay instead of eight, Mississippi Today reported.

Retirees can return to a state job after a 30-day break instead of 90, earning up to 80% of the job’s salary with no new benefits and no annual raises, through July 1, 2036. Elected officials, school superintendents and college administrators are excluded, according to the bill summary the Wire read. Retired teachers get their own path: back after 30 days, for up to five years, paid at up to 125% of the state salary schedule, with no more than half going to the teacher and the rest to PERS.

It also creates Mississippi Work and Save, a voluntary retirement account run by the state treasurer. Employers may offer it and enroll workers automatically, workers can opt out, and the self-employed can join; money comes out of paychecks into a Roth IRA, a retirement account funded with after-tax dollars. Contributions start by Aug. 1, 2028, and fees are capped at 0.75% a year after a three-year start-up period, according to the summary.

PERS has about $26 billion in unfunded liabilities, the gap between what it has promised retirees and what it holds, Mississippi Today reported. Last year’s cuts were meant to stop the gap from growing, but opponents said they would make hiring and keeping state employees such as teachers and first responders harder, Mississippi Today reported. First responders asked for 25 years and got 30, WDAM reported.

Sen. Joey Fillingane, a Republican, pointed to the teacher shortage, WDAM reported. ‘If they’re still willing to sit out for 30 days and come back making 80% of what they were formerly making and still be of service in their field, then we think that’s a huge win,’ he said.

Rep. Jody Steverson, a Republican, sponsored the bill. The House and Senate adopted a conference committee’s compromise on March 29, nearly unanimously, Mississippi Today reported; a conference committee is a small group from both chambers that works out one version of a bill. Gov. Tate Reeves signed it April 8.

The Wire’s read: what did not pass matters as much. The Senate’s plan to put $1 billion into PERS over a decade died, as did the House’s idea to tie a $600 million transfer to legalizing mobile sports betting, Mississippi Today reported. The Wire’s read: the $26 billion gap is unchanged, and the Wire found no new money toward it in this law.

The Wire could not find the pension system’s cost estimate for the Tier 5 changes, and found no new money toward the $26 billion gap in the reporting it read. The Wire’s read: shorter careers and a four-year pay average mean higher benefits per retiree than last year’s plan, which the system must fund.

For a new teacher or officer hired after March 1, 2026, the change is worth five years of working life. For a retiree who comes back, 80% of a $50,000 job is $40,000 on top of a pension.

Hired into a PERS job after March 1, 2026: you are in Tier 5, and you can now retire with full benefits after 30 years.

Already retired: you can take a state job 30 days after you leave, at up to 80% of its pay, and keep your pension. If your employer offers Work and Save, or you are self-employed: watch for sign-ups by 2028.

The PERS board can set a later date than 30 days for returns; watch its rules. Work and Save must be running by Aug. 1, 2028.

Sen. Joey Fillingane said leaders are still discussing a plan moving forward, WDAM reported; the Wire found no date.