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House panel votes to introduce bill to exclude per diem payments from retirement formula (video)

House panel votes to introduce bill to exclude per diem payments from retirement formula (video)

Dustin Hurst
January 25, 2012
Dustin Hurst
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January 25, 2012

On Wednesday, members of the House Commerce and Human Resources Committee unanimously approved introducing a bill to exclude per diem payments from retirement calculations.

The bill's sponsor, Rep. Dennis Lake, R-Blackfoot, says the measure will create pension equity among state lawmakers.

The problem is that lawmakers living within 50 miles of the Idaho Capitol have their per diem payments included in their paychecks and the payments are regarded as taxable benefits. The Public Employee Retirement System of Idaho (PERSI) then uses the salary rates to compute a legislator’s retirement payment.

Lawmakers outside the 50-mile radius do not have per diem included in salaries and are issued a check during the months of the legislative session.

Two lawmakers doing essentially the same amount of work each year could have entirely different pension payments simply because of where they live. Lake estimates per diem inclusion results in pension payments about 25 percent higher than they should be, depending on the length of legislative session.

Two senators caught up in a separate per diem controversy last year illustrate the discrepancy.  Republicans Curt McKenzie, Nampa, and John McGee, Caldwell, have salaries much higher due to the per diem calculation than those senators living outside the 50-mile radius. Records show McGee earned $32,986 in 2009, some $27,842 in 2010, and $29,052 in 2011. McKenzie earned the same amounts as McGee in each of the three years.

For comparison, Senate Majority Leader Bart Davis, R-Idaho Falls, earned a little more than $18,000 in each of the past three years.  Davis, out of the 50-mile radius, received his per diem payments in the form of a reimbursement check from the Senate administration.

Lake told IdahoReporter.com he expects the legislation to sail through the Statehouse.

See Lake's explanation of the bill below:

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