The House State Affairs Committee voted 14-5 to hold a bill that would end a practice that allows lawmakers to spike their public pensions by taking high-paying jobs after service in the Idaho Statehouse.
The bill, brought by Rep. Dennis Lake, R-Blackfoot, will come forward again in the committee in the next week or two.
The crux of the debate rested on whether or not legislators are full- or part-time employees. Rep. Eric Anderson, R-Priest Lake, told members of the committee he would be “offended” if he is regarded as a part-time worker while serving in the Legislature. He believes that paring down pensions would mean fewer people would be willing to serve in Boise for three months each year.
“This is going to lead down a road where the retired and wealthy can serve in the Legislature and the rest can’t,” said Anderson.
Rep. Erik Simpson, R-Idaho Falls, echoed Anderson’s feelings. “Quite frankly, it costs me a lot of money to be here,” Simpson said, explaining that he loses wages by serving in the Capitol.
The issue stalled, however, when Rep. Lynn Luker, R-Boise, queried the committee how legislators would accrue Public Employee Retirement System (PERSI) credit going forward and how past service would be handled. Lake was forced to leave the hearing to attend another committee meeting and wasn’t able to answer Luker’s questions.
As law stands, PERSI calculates pension benefits based on an employee’s highest consecutive 42 months of pay, but also takes into account a worker’s total span of service.
That means lawmakers can log many years in the Legislature at a pay rate of about $16,000, then take a high-paying state job and have their legislative time count at the increased wages.
Lake’s bill would end pension-spiking by averaging out wages rates over a legislator’s full career, instead of basing payouts on just the highest 42 months. If it’s eventually cleared, the measure would take effect July 1, 2012.
There are several examples of pension-spiking in the Idaho Legislature’s immediate past. Late last year, former Sen. Joe Stegner, R-Lewiston, took a job as the head lobbyist for the University of Idaho, a post paying $124,000 annually.
If Stegner had simply retired at the end of 2012—his 14th year in the Legislature—he would receive a pension payout of about $373 per month, or $4,480 annually. If Stegner stays with the school 42 months at his starting wage, his pension payout will increase to approximately $3,410 a month, or $40,920 annually.
Former Rep. Debbie Field, R-Boise, retired as head of the Office of Drug Policy last year, just 43 months after being appointed to the job by Gov. Butch Otter. With her $70,000-a-year salary counting in her pension calculation, Field is set to bring in about $23,052 annually. If she had not been appointed to the post after losing her House election in 2006, her pension would be approximately $5,316 a year.
Former Senate Pro Tem Bob Geddes, R-Soda Springs, resigned during the 2011 legislative session to take a commissioner spot at the Idaho State Tax Commission, a job paying more than $85,000 annually. If Geddes stays with the commission at least 42 months, his pension will jump more than $2,500 each month or $30,000 each year.