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Panel approves judicial pension reform plan with cuts and more money included

Panel approves judicial pension reform plan with cuts and more money included

Dustin Hurst
March 19, 2012
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March 19, 2012

A long-fought battle to rein in the state judicial pension system’s unfunded liability is one step closer to a conclusion.

The House Judiciary, Rules and Administration Committee voted unanimously Monday to approve a sweeping reform of the judges’ retirement system which will, in time, bring it into fiscal solvency.

The legislation hopes to erase an unfunded liability hovering around $10 million. The fund is 86 percent funded as of its last valuation in January.

That reform, however, means taxpayers must pay more for judges’ pensions in coming years. The measure would mean taxpayers pitching in at least $900,000 more each year to shore up the pension fund.

The legislation would hand administration of the independent pension system over to the Public Employee Retirement System of Idaho (PERSI), which manages the state’s fund for its workers and public school teachers.

Judges’ pension contributions would jump from 6 to 9 percent, and the state would hike its portion from 7 to 10.5 percent of judges’ salaries. The average judicial contribution would jump from about $6,700 to more than $10,000 annually. The average annual state contribution would be more than $12,000.

Along with the extra money from the taxpayers paid out through the state’s general fund, civil filing fees would jump from $18 to $26 to cover the unfunded liability.

The state’s share of the retirement cost would increase $206,000 annually in the next two years. The increase in filing fees would bring in an extra $724,000 each year.

The increase in filing fees, however, would remain even if the fund achieves complete solvency. The bill’s lead sponsor, Rep. Dennis Lake, R-Blackfoot, said he would like the increase to bring down contribution rates once the unfunded liability it eliminated.

“The contribution rates are very high,” Lake said. “We’d like to see those go down.”

Other key changes will come if the legislation becomes law. Judges would see cost-of-living-adjustments identical to those given to PERSI beneficiaries annually, typically about 1 percent per year.

The spouse benefit would be reduced under the plan. As it stands, spouses of deceased judges receive 50 percent of the benefit after death, a number reduced to 30 percent in the legislation.

The plan, which has been in the works for a number of years, won the praise of several lawmakers, including committee chair Rich Wills, R-Glenns Ferry. “It’s not easy and it’s taken years to do this,” Wills said. “And a lot of extra effort on everyone’s part.”

Lake, who led negotiations, said he was impressed with the compromise through the process. “This was a hard-fought battle,” Lake said. “We asked them (judges) to pay more and give up benefits, and they didn’t particularly want to do that.”

Judges typically earn more than $70,000 each year in retirement after 16 years of service to the state.

The legislation isn’t perfect, Lake explained, but it’s the best deal that could be worked out. “Some of us think there should be more cuts, some of us think there should be less,” Lake said. “But, that’s what negotiation is all about.”

The measure now heads to the House floor. If it’s approved there, the chair of the Senate Judiciary and Rules Committee has promised to fast-track the measure to clear it prior to the end of the legislative session, slated for sometime next week.

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