As he did during the 2011 legislative session, Rep. Dennis Lake, R-Blackfoot, has brought a bill to end legislative pension-spiking, a practice that costs taxpayers thousands of dollars each year.
Lake introduced the bill late in the 2011 session, but it never received a hearing because some lawmakers thought the bill would have unintended consequences. The new version of the legislation, Lake said, addresses only legislative pensions.
As part of their compensation, lawmakers participate in the Public Employee Retirement System of Idaho (PERSI) for their pensions. After a lengthy career in the Statehouse, lawmakers typically receive a few hundred bucks each month in retirement.
Occasionally, however, a lawmaker retires and then is appointed to a high-paying state job. All it takes is 42 months in that high-paying post and a lawmaker could spike his pension by several thousand dollars each year.
Lake said he believes it’s “unconscionable” for the Legislature to allow this perk to go on. “We don’t believe this is quite right,” he told his colleagues on the House State Affairs Committee.
Lake's bill would end that practice and change the law so that legislative pay rates, about $16,000 a year, and wages of higher-paying state jobs are averaged out in pension calculations.
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.
The bill passed the House State Affairs Committee unanimously and will likely receive a hearing next week. This is the second bill Lake is pushing to fix some elements of PERSI. The first, set for a hearing in the House Commerce Committee Tuesday afternoon, would require PERSI to exclude per diem payments from retirement calculations.