PERS Tier 5 - Latest Updates and Information

This page was created to answer frequently asked questions and provide information as it becomes available regarding PERS Tier 5, which will go into effect March 1, 2026.

Summary Overview of PERS Tier 5

The Public Employees' Retirement System of Mississippi's Tier 5 was created with the passage of House Bill 1 by the Mississippi Legislature during its 2025 session. The tier is a hybrid of a defined benefit (DB) pension plan and a defined contribution (DC) plan. Membership in this tier is for those hired in PERS-covered positions March 1, 2026, or later who are new to PERS or who were previous members of PERS but refunded. Those in the tier will pay a mandatory 9 percent of salary (4 percent into the DB and 5 percent into the DC). Vesting in this tier requires eight years of service.

Mississippi Legislature - House Bill 1, Regular Session 2025

House Bill 1 - Lamar - This bill, authored by Representative Trey Lamar, created Tier 5 for the Public Employees' Retirement System of Mississippi and closed the Supplemental Legislative Retirement Plan to new members, both effective March 1, 2026.

Benefit Overview - Tier 4 vs Tier 5

This overview gives a point-by-point comparison of the current Tier 4 and the new tier, Tier 5. Click here to view the comparison overview.

What type of plan is Tier 5?

Tier 5 is a hybrid of a defined benefit (DB) pension and a defined contribution (DC) plan.

What date of hire is the entry date into Tier 5?

The new benefit provisions (Tier 5) only apply to PERS-covered employees hired March 1, 2026, and later.

What are the employee and employer contribution rates for Tier 5?

The employee contribution rate is 9 percent with 4 percent going into the defined benefit portion of the plan and 5 percent going into defined contribution portion of the plan.

The employer contribution rate is 18.40 percent to PERS.

What is the vesting requirement for Tier 5?

Vesting for the defined contribution portion of the plan is immediate upon entry. 

Vesting for the defined benefit portion of the plan is eight years.

Does Tier 5 offer a cost-of-living adjustment (COLA)?

Tier 5 has no guaranteed COLA; however, the Legislature may provide an additional benefit for a specific year.

Does Tier 5 offer a partial-lump-sum option (PLSO)?

Tier 5 has no PLSO.

Does Tier 5 award credit for unused leave?

No service credit is awarded under Tier 5 for unused leave.

Does Tier 5 award credit for military service?

Tier 5 allows for up to four years of free creditable service for honorable military service; however, members may purchase additional military service credit under USERRA.

Does Tier 5 allow for early withdrawals?

Under Tier 5, the defined contribution portion of the plan allows for hardship withdrawals.

Does Tier 5 allow for purchase of service credit?

No service credit shall be purchased for out-of-state service, professional leave, or any other non-covered service under Tier 5.

Does Tier 5 provide for a refund payback?

No, individuals reentering the system on or after March 1, 2026, are ineligible to repurchase the withdrawn service credit service credit.

How does the defined contribution (DC) portion of Tier 5 work?

The DC portion of Tier 5 is an individual 401(a) account funded by the member that grows based on investment performance. The member can choose how to invest from a range of professionally managed options. Empower serves as the third-party administrator of the DC portion and offers members the ability to view and manage their DC account online. Also, the balance of the DC portion is portable if the member changes jobs.

What happens if a member of Tier 5 leaves public service before retiring?

• A member who leaves covered employment before vesting in the defined benefit (DB) portion of the plan may withdraw his or her own contributions but not the employer’s share.
• A member who leaves covered employment after vesting in the DB portion of the plan will have a DB pension available when he or she reaches retirement age.
• The member's defined contribution (DC) account stays with him or her whether working for a covered employer or not.  The member may keep the DC account balance invested, roll it over, or withdraw it (subject to tax rules).