Jackson, MS. In her capacity as Chair of the Board of Directors of the College Savings Plans of Mississippi, Treasurer Lynn Fitch delivered a letter and resolution to the Legislature today asking for a special appropriation for Fiscal Year 2019 to address funding liabilities in the Legacy Program of the Mississippi Prepaid Affordable College Tuition program (MPACT).
“I’m pleased to report that the steps the Board took to restructure MPACT have put the program on the right path,” said Treasurer Fitch. “MPACT’s Horizon Program is cost-neutral to taxpayers, a better deal for Mississippi savers, and in good fiscal health. Our actions to defer enrollment set MPACT up for long-term sustainability.”
“But, the underfunding issues of the Legacy Program remain,” continued Fitch. “It is imperative the Legislature address this liability with a special appropriation in the coming fiscal year. MPACT is backed by the full faith and credit of the State. Delaying this special appropriation will ultimately mean a bigger bill for Mississippi taxpayers.”
Shortly after Fitch took office as Treasurer, in the Fall of 2012, she and the Board deferred enrollment in MPACT to have its first actuarial audit performed, analyzing the long-term sustainability of the program. Contracts existing at that time, known as Legacy Contracts, continued to receive benefits throughout that time. New contracts issued after MPACT enrollment was reopened in October 2014 became known as Horizon Contracts, and are structured differently.
An actuarial report presented to the Board on November 11,, 2017 indicates funding for the Legacy Program is at 69.4%, with an unfunded liability of $135.4 million. Pursuant to a funding policy established by the Board as part of the restructuring, when the Legacy Program fails to hit its funding target (100%), the Board will request a special appropriation of 10% of the shortfall from the Legislature. The amount of the requested cash infusion to cover this shortfall is $13,545.549.
This is the fifth time the Board has asked the Legislature to address the Legacy Program shortfall with a special appropriation. The previous requests all went unanswered. If the Legislature continues to fail to provide a cash infusion and all other economic assumptions are met, the Legacy Program will be insolvent by year 2026.
The Treasurer’s letter, as well as the Board’s
resolution are attached.