MS 2020-07-J-CaldwellSr-May-19-2020-PERS-Retirees-Holding-Elective-Office-of-Transportation 2020-05-19

Can a Mississippi PERS retiree elected as Transportation Commissioner keep getting retirement benefits and partial pay?

Short answer: Generally no. The AG concluded that the Transportation Commissioner's salary is fixed at $78,000 by Miss. Code Ann. § 25-3-31 and cannot be reduced or waived. So § 25-11-127(4)(a)'s half-salary path is unavailable. Subsection (4)(b) could allow simultaneous PERS benefits only if $78,000 is 25% or less of the retiree's average compensation. For most retirees, that threshold is not met, and PERS benefits must be temporarily suspended during service.

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

Plain-English summary

John Caldwell, Sr. retired from public employment, drew PERS retirement benefits, and then ran for and won election in November 2019 as Transportation Commissioner for Mississippi's Northern District. He took office in January 2020. He wanted to keep drawing his PERS retirement while also receiving partial Commissioner pay under one of the two paths in Miss. Code Ann. § 25-11-127(4). The AG had to read the PERS rules together with the Commissioner's statutory salary.

The Mississippi Public Employees' Retirement System has two reemployment-during-retirement paths in § 25-11-127(4):

(4)(a) Half time, half pay: Work no more than half the normal working days for the position, and receive no more than half the position's salary.
(4)(b) Earnings cap: Work however much, but earn no more than 25% of the retiree's average pre-retirement compensation.

Caldwell's problem: the Transportation Commissioner's annual salary is fixed at $78,000 by Miss. Code Ann. § 25-3-31. The AG, drawing on a long line of opinions, said that a salary fixed by statute cannot be reduced or waived by the office-holder. So path (4)(a) was off the table; he could not work for half the salary because he could not lawfully receive less than $78,000.

Path (4)(b) remained possible only if $78,000 was 25% or less of his average compensation. For that to fire, his average pre-retirement compensation would need to be at least $312,000 per year. Most public employees do not earn that much, and the AG concluded that for typical PERS retirees, this path also fails.

The bottom line: Caldwell's PERS benefits had to be suspended while he served as Commissioner, unless he met the unusual high-compensation threshold under (4)(b). Benefits would resume after his service ended.

The AG also flagged that this opinion overrode an earlier 2019 Higgins opinion (Question 3) where the conclusion was different. Higgins is no longer good law on this question.

Currency note

This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Mississippi's PERS reemployment rules under § 25-11-127(4) are designed to let retirees re-enter public service in limited ways without simultaneously double-dipping (full salary plus full pension). The two paths give retirees flexibility but cap the financial bottom line:

(4) The provisions of this section shall not be construed to prohibit any retiree, regardless of age, from being employed and drawing a retirement allowance either:

(a) For a period of time not to exceed one-half (½) of the normal working days for the position in any fiscal year during which the retiree will receive no more than one-half (½) of the salary in effect for the position at the time of employment, or

(b) For a period of time in any fiscal year sufficient in length to permit a retiree to earn not in excess of twenty-five percent (25%) of retiree's average compensation.

Path (4)(a) requires the retiree to actually work less and earn less. Path (4)(b) lets the retiree work more, but caps total earnings at 25% of average pre-retirement compensation.

The Transportation Commissioner's salary is in § 25-3-31, the statute that fixes salaries for various elected state and district officers. The Commissioner's annual salary is $78,000. The AG's longstanding rule, traced through MS AG Op., Stringer (January 3, 2003), MS AG Op., Lancaster (August 14, 1991), and MS AG Op., Shepard (August 31, 1994), is that a statutorily fixed salary cannot be waived or reduced by the office-holder. The salary belongs to the position, not the person; a holder cannot give it away or accept less.

That rule is what makes path (4)(a) unavailable. (4)(a) requires the retiree to "receive no more than one-half (½) of the salary in effect for the position." The Commissioner cannot lawfully receive less than $78,000. There is no path to "half pay" because the salary cannot be halved.

Path (4)(b) is technically available but requires a high earnings threshold. To draw both PERS and the $78,000 salary, the retiree's "average compensation" pre-retirement would need to be such that $78,000 is 25% or less of it. That means average compensation of $312,000 or more. The opinion does not reach the question of whether Caldwell met this threshold; it lays out the analysis and leaves the application as a factual matter.

For PERS retirees who do not meet the (4)(b) threshold, the answer is binary: either accept the office and have PERS benefits suspended for the term, or do not accept the office. PERS benefits resume when the service ends.

The opinion explicitly overrules MS AG Op., Higgins (January 24, 2019) Question 3 to the extent it conflicts. Higgins had apparently allowed a salary-waiver path that the AG now rejects.

Common questions

Q: Why can't an office-holder choose to work for less?
A: Because the salary is fixed by statute. The legislature decided what the position pays. An individual office-holder taking less would alter the legislative determination, which the office-holder lacks authority to do. The salary belongs to the position.

Q: Can the office-holder donate the salary back to the state?
A: That is a different question and the opinion does not address it. The salary still must be paid; what the office-holder does with it after receipt is generally personal. But that does not affect the PERS analysis: the receipt of the full salary is what matters.

Q: What about the 25% threshold under (4)(b)?
A: The threshold uses "average compensation," which is a defined PERS term measuring the retiree's pre-retirement earnings. For someone whose pre-retirement earnings were modest (say, $50,000 average), 25% would be $12,500. A $78,000 salary would massively exceed that, so (4)(b) would not apply, and PERS benefits would have to be suspended.

Q: When PERS benefits are suspended, are they lost forever?
A: No. The opinion is clear: benefits "will resume at the end of the renewed service." The suspension is temporary, not a forfeiture.

Q: Does this analysis apply to all elected state offices with statutory salaries?
A: The reasoning applies to any office whose salary is fixed by § 25-3-31 or similar statute and cannot be waived. The same § 25-11-127(4)(a) limitation would apply.

Citations and references

Statutes:
- Miss. Code Ann. § 25-11-127(4) (PERS reemployment-during-retirement options)
- Miss. Code Ann. § 25-11-127(4)(a) (Half-time, half-pay path)
- Miss. Code Ann. § 25-11-127(4)(b) (25% earnings cap path)
- Miss. Code Ann. § 25-3-31 (Salaries of elected state and district officers, $78,000 for Transportation Commissioner)

Prior AG opinions:
- MS AG Op., Stringer (January 3, 2003)
- MS AG Op., Lancaster (August 14, 1991)
- MS AG Op., Shepard (August 31, 1994)
- MS AG Op., Higgins (January 24, 2019) (Question 3 overruled by this opinion)

Source

Original opinion text

May 19, 2020

The Honorable John M. Caldwell, Sr.
Commissioner of Transportation
Northern District, Mississippi
1909 North Gloster Street
Tupelo, Mississippi 38803

Re: PERS Retirees Holding Elective Office of Transportation Commissioner

Dear Commissioner Caldwell:

The Office of the Attorney General is in receipt of your request for the issuance of an official opinion.

Question Presented

May a retiree of the Public Employees' Retirement System (PERS), who is duly elected as a Transportation Commissioner, continue to draw retirement benefits and be paid an amount equal to or less than the statutory salary rate?

More specifically, may the elected official choose to remain retired and also be paid in accordance with Miss. Code Ann. Section 25-11-127(4)(b) at twenty-five percent (25%) of the retiree's average compensation?

Background Facts

In November 2019, you were elected to the position of State Transportation Commissioner for the Northern District of Mississippi. In January 2020, you took office. You are also a retired public employee who receives retirement benefits from PERS.

Pursuant to Miss. Code Ann. Section 25-11-127(4)(b), your stated intention was to elect to receive partial pay for your position as Transportation Commissioner and to continue to receive your benefits from PERS simultaneously.

Brief Response

It is the opinion of this office that you may not receive less than or waive any portion of your annual salary which is fixed by Miss. Code Ann. Section 25-3-31 at $78,000 per year. Unless that amount ($78,000) is twenty-five percent (25%) or less of your average retirement compensation, under Miss. Code Ann. Section 25-11-127(4)(b), you may not receive retirement benefits from PERS while serving as Transportation Commissioner.

Applicable Law and Discussion

Public service is commendable and valuable to the State. There are many valid reasons for which a state agency or the state electorate may seek to bring someone who has retired from state employment back into service, including institutional knowledge and experience and a demonstrated dedication to serving the interests of the people of Mississippi.

It is of paramount importance to note here that nothing in Miss. Code Ann. Section 25-11-127 forces a retiree who chooses to reenter state service to forfeit their benefits from PERS. Rather it places certain conditions on a retiree's ability to receive PERS benefits and, at certain salary levels, a retiree must temporarily forego receipt of his/her retirement benefits, benefits which will resume at the end of the renewed service. The Legislature has, in fact, gone to some lengths to create parameters by which those who have served may serve again, offering their knowledge and experience, without simultaneously receiving both employment compensation and retirement benefits from Mississippi taxpayers.

Miss. Code Ann. Section 25-11-127(4) provides two options by which a PERS retiree may receive state compensation and retirement benefits simultaneously. It reads:

(4) The provisions of this section shall not be construed to prohibit any retiree, regardless of age, from being employed and drawing a retirement allowance either:

(a) For a period of time not to exceed one-half (½) of the normal working days for the position in any fiscal year during which the retiree will receive no more than one-half (½) of the salary in effect for the position at the time of employment, or

(b) For a period of time in any fiscal year sufficient in length to permit a retiree to earn not in excess of twenty-five percent (25%) of retiree's average compensation.

Miss. Code Ann. Section 25-11-127(4)(a) requires that the retiree be able to work for half the normal working days of the position and be able to receive one-half (1/2) or less of the salary for that position. The position of Transportation Commissioner, however, has a salary fixed by statute and may not be paid at any other level, half or otherwise. Under Miss. Code Ann. Section 25-3-31, the "annual salaries of [certain] elected state and district officers are fixed ...," and that section specifies that the annual salary of a Transportation Commissioner is $78,000. That salary may not be reduced, and it may not be waived by choice or by operation of Section 25-11-127(4)(a-b).

This conclusion is consistent with previous opinions that "an individual holding a position or office for which the salary is prescribed by statute may not waive that salary." MS AG Op., Stringer (January 3, 2003). See also MS AG Op. Lancaster (August 14, 1991); MS AG Op. Shepard (August 31, 1994). To the extent this conclusion conflicts with our response to Question No. 3 in MS AG Op. Higgins (January 24, 2019), this opinion controls.

Miss. Code Ann. Section 25-11-127(4)(b) may allow for an elected Transportation Commissioner to receive both retirement benefits and his/her salary in accordance with Section 25-3-31. However, to do so, the annual salary for the position, which is $78,000, may not exceed twenty-five percent (25%) of that Commissioner's average retirement benefits.

Conclusion

For the reasons set forth herein, it is the opinion of this office that an annual salary fixed by Miss. Code Ann. Section 25-3-31 may not be reduced or waived and therefore the criteria of Miss. Code Ann. Section 25-11-127(4)(a) cannot be met and such official may not receive PERS retirement benefits while serving in that office.

Further, Miss. Code Ann. Section 25-11-127(4)(b) can only be satisfied if the full salary fixed by statute is twenty-five percent (25%) or less than the average retirement compensation. Therefore, if the salary of $78,000 fixed by Miss. Code Ann. Section 25-3-31 is more than twenty-five percent (25%) of your average retirement compensation, you may not receive retirement benefits from PERS while serving as the Transportation Commissioner.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Kim Turner
Kim Turner
Assistant Attorney General
Opinions Division Director