A reader sent us a link to a WALL STREET JOURNAL story about ailing public retirement plans. Idaho’s PERSI (Public Employee Retirement System) covers city county and state workers so each city doesn’t have its own burden, but we still need reform.
PERSI is full of flaws that cost taxpayers millions and is in danager of foundering. It is a defined BENEFIT plan rather than a defined CONTRIBUTION plan. In short, that means former public workers get a specific payout even when the stock market and other investments take a dump. If it stays as is, look for even more contribution hikes which could also mean tax increases. PERSI will certainly be a topic of concern during the next legislative session.
The GUARDIAN’s biggest problem with the system is the abuse by elected officials. At all levels of government we have commishes, councilors, legislators, and others who serve for years at elected jobs paying a mere stipend–say $5,000 a year. When retirement nears they magically get appointed to positions paying upwards of $90,000.
One of the hidden treasures for these elected officials is the retirement boost they get.
Because the state retirement (PERSI) is based upon length of service at ANY pay rate with any participating agency. Their retirement checks are based on the highest pay for any 42 consecutive months…that’s also why politicos in formerly high paying jobs stick around for minor jobs if voted out of office as well.
The “rule of 90” requirement means their years of service plus age must equal 90 for them to retire with benefits based on their highest 42 months of pay…pretty nice if you can get appointed or elected to a four year term at high pay.
Former Gov. Phil Batt tried to get the law changed to read “full time employment” to no avail. A tough task when you see how many legislators end up working for the state at high salary after leaving the part time legislature with 20 years under their belts.
Here is a link to a well done PERSI VIDEO aimed at informing new legislators. While not in a crisis mode, the plan will need some increased contributions.
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