Mississippi PERS (Tier 3)
This page documents how FinZot models the Mississippi PERS (Tier 3) defined benefit pension plan.
Who this plan covers: General members of Public Employees’ Retirement System of Mississippi, on or after July 1, 2007 and before July 1, 2011: became a member of PERS.
Employee Contributions
Section titled “Employee Contributions”Employee contributions are the portion of salary that the employee pays into the pension fund.
| Field | Value |
|---|---|
| Contribution Rate | 9% of salary |
| Tax Treatment | Pre-tax (reduces taxable income) |
Vesting & Retirement Eligibility
Section titled “Vesting & Retirement Eligibility”Vesting
Section titled “Vesting”Vesting determines when an employee has earned the right to receive pension benefits. The following formula must evaluate to TRUE for the employee to be vested:
service_credits >= 8Retirement Eligibility
Section titled “Retirement Eligibility”Retirement eligibility determines when an employee can begin receiving pension payouts. The following formula must evaluate to TRUE:
service_credits >= 25 OR(service_credits >= 8 AND commencement_age_months - IF(birth_day_of_month = 1, 0, 1) >= 60 * 12)Formula Variables:
service_credits: Years of credited servicecommencement_age: Age when pension payments commence
Benefit Calculation
Section titled “Benefit Calculation”The annual pension benefit is calculated as:
Annual Benefit = Final Compensation × Benefit Factor × Service CreditsFinal Compensation
Section titled “Final Compensation”Final compensation is the salary figure used in the benefit calculation, typically an average of the employee’s highest-earning years.
| Field | Value |
|---|---|
| Method | Highest Any Years |
| Years Averaged | 4 |
Benefit Factor
Section titled “Benefit Factor”The benefit factor is a percentage multiplier that typically varies based on retirement age. Higher ages generally yield higher factors.
IF(service_credits <= 0, 0,(0.02 * MIN(service_credits, 25) + 0.025 * MAX(0, service_credits - 25)) / service_credits)Formula Variables:
commencement_age: Age when pension payments commenceservice_credits: Years of credited service
Cost-of-Living Adjustment (COLA)
Section titled “Cost-of-Living Adjustment (COLA)”The COLA formula determines how pension benefits grow over time after retirement to keep pace with inflation.
initial_pension_benefit *(0.03 *(years_since_retirement - IF(commencement_month >= 8, 1, 0) - MAX(0, MIN(years_since_retirement - IF(commencement_month >= 8, 1, 0), age - 54))) + 1.03 ^ MAX(0, MIN(years_since_retirement - IF(commencement_month >= 8, 1, 0), age - 54)))Formula Variables:
initial_pension_benefit: The annual benefit amount at retirementyears_since_retirement: Number of years since retirement began
Tax Treatment
Section titled “Tax Treatment”Pension payouts from this plan are taxable as ordinary income.
Social Security Coverage
Section titled “Social Security Coverage”Mississippi PERS (Tier 3) members generally pay into Social Security alongside the pension, so a job with this plan is treated as covered and earns Social Security credits normally.
Note: FinZot’s pension estimates are for planning purposes only and may not reflect all plan provisions. For official benefit estimates, contact your plan administrator.