Don Drum, director of the Public Employee Retirement System of Idaho, told JFAC this morning that PERSI is among the best-funded state pension systems nationwide; it’s among a dozen states that are 80 percent or better funded. As of Jan. 3, it was 87.7 percent funded. That was after the PERSI board lowered its expected returns out of concern over market conditions and a possible recession due to the fiscal cliff issue; without that change, it would be over 90 percent.
“Forty-two states have made changes to their pension plans,” Drum said. “Most of those systems are coming back to where Idaho has always been and we’ve elected to stay. We’re still on the conservative side of the benefit structure, and I think that’s where we want to stay.”
Nevertheless, PERSI will have a rate increase this year; it was actually first approved back in 2009 during the downturn, but was delayed twice as agencies struggled with budget cuts. No action by the PERSI board is required for the scheduled rate increase; its first phase, a 1.5 percent hike, kicks in July 1, 2013; that includes 0.58 percent for employees and 0.92 percent for employers, which include state and local government agencies and school districts. The state general-fund impact is about $9 million. Another 1.5 percent increase is scheduled to hit in 2014, and the final 2.31 percent in 2015. Other than the 1 percent annual cost-of-living increase required by law, the board has not approved any additional COLA for retirees for the past four years, nor is it proposing one for next year.