Bill Description: House Bill 589 recognizes juvenile detention, juvenile probation, and adult misdemeanor officers as police officers for the purpose of granting them more favorable retirement benefits.

Rating: -1

Analysis:

Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?

Generally, Idaho state employees wait until they turn 65 years old before they can collect the benefits they earn from the Public Employment Retirement System of Idaho (PERSI). However, employees may collect their benefits earlier if the sum of their age and years of service equals 90. This provision is known as the Rule of 90.

Due to the physical and mental strain public safety workers go through on the job, they are allowed to collect retirement benefits sooner than other PERSI beneficiaries. Rather than retire under the Rule of 90, they can take advantage of something called the Rule of 80. Under this rule, employees may collect their benefits once the sum of their age and years of service equals 80. Under Title 59, Idaho Code, this option is open only to police officers and firefighters.

HB 589 defines approximately 430 juvenile detention, juvenile probation, and adult misdemeanor officers as police officers for the purpose of retirement, qualifying them for the Rule of 80. This would increase government spending on PERSI contributions by 0.34%.

(-1)

Analyst’s note:

Although this appears to be a small benefit increase for a narrow group of employees, it could have significant consequences for the structure of the PERSI retirement system. Some could make an argument for applying the Rule of 80 to many different state employees. One argument is that this exception would make it easier for public managers to hire people for hard-to-fill positions.  Other state agencies can and do make similar arguments for their employees. Extending the Rule of 80 beyond firefighters and police officers could make state retirement plans a larger expense down the road.

Even though PERSI is well-funded now, it is important to remember that we are in an extremely long bull market by historical standards. Once an employee retires, they are no longer contributing to PERSI and their pension must be covered by other active members and taxpayers. Given the current trajectory of the United States economy, it is irresponsible to expand the state’s obligations to PERSI retirement plans.