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Eye On Boise

PERSI: ‘They’re the plan sponsor’

Don Drum, director of the Public Employee Retirement System of Idaho, said of a legislative committee's surprise reconsideration and passage today of previously-killed legislation to block a 1 percent COLA for state retirees next month, "They're the plan sponsor, and they can make decisions. ... Granted it's the first time ever that they chose not to accept (the PERSI board's decision on a COLA), but that's within the law ... they can do that."

As for concern over an actuarial report showing a $3 billion unfunded liability at PERSI, Drum said that report was for the fiscal year that ended July 1, 2009. "In 2007, we were 105 percent funded and we had $600 million in surplus," Drum said. "So that's where we were at July 1, 2007. This market drop is what has caused us to go from that positive number to a negative number. ... PERSI's been in worse shape historically than we are today, and in fact, this is how things swing."

Since the end of the fiscal year covered by that report, the PERSI fund has actually gained about $500 million - just in the past seven months - though it still has an unfunded liability of more than $2 billion. "So that number ebbs and flows with the market significantly," Drum said. "If you're someone who engages in the market and understands the ebbs and flows of the market, it would not be a surprise, and I guess you would probably look at how much we've bounced back since June 30 and you would be optimistic in thinking that it's not going to be a problem for us."

He added, "We are recognized nationally as being a very solid fund and a very well-managed and run fund. I think we take a lot of pride in the fact that we get that kind of recognition."



Eye On Boise

News, happenings and more from the Idaho Legislature and the state capital.