Available Soon: Request your printed copies of the Idaho Freedom Index mailed to you!
Request Your Copies
Note to Dustin: This is currently only visible to logged in users for testing.
Click Me!
video could not be found

PERSI wants to address $20 million judicial pension shortfall — again

PERSI wants to address $20 million judicial pension shortfall — again

Dustin Hurst
December 4, 2015

If at first you don’t succeed, try, try again.

That might be the Public Employee Retirement System of Idaho’s motto as its board members seek to shore up funding for recently-reformed judicial pensions.

PERSI, the state agency tasked with overseeing public worker retirement accounts, will ask Idaho lawmakers to dump more cash into judicial pensions just a few years after legislators reformed the program due to its ailing fiscal health.

According to PERSI’s October board meeting minutes, the agency will ask lawmakers to increase government contributions into judicial pensions from 55.28 percent to 62.53 percent of a judge’s yearly salary. That’s a 13 percent hike.

Under the plan, judges will have to pay more, too. PERSI will request judicial contributions to increase from 10.23 percent to 11.57 percent, also a 13 percent increase.

Idaho law mandates the board take action if the pension account doesn’t have enough cash to cover its liabilities within 25 years. The PERSI record reveals the judges pension account would take 29 years to pay off using what the state now has.

The fund is about $21 million short of the cash it needs to cover its liabilities, up from a $13.6 million gap in 2013.

The request will come after legislators reformed the judicial pension system in 2012 to bolster the fund. That reworking slightly decreased some pension benefits, including the payout for surviving spouses. The changes implemented also upped the contribution rate for judges, and increased civil filing fees from $18 to $26.

Records from PERSI’s September board meeting show the fund is about 78 percent funded, below the 80 percent some regard as the low bar for a healthy pension fund. The American Academy of Actuaries disputes the 80 percent figure, though, and says no single figure at a singular point in time can accurately describe a pension fund’s health.

“All plans should have the objective of accumulating assets equal to 100% of a relevant pension obligation, unless reasons for a different target have been clearly identified and the consequences of that target are well understood,” the 17,000-member group wrote in a 2012 policy memo.

Though PERSI wants full funding for the judicial pension account, it’s trending in the wrong direction. The account was 82.99 percent funded in 2013, and 81.28 percent funded last year.

Former state Rep. Dennis Lake, R-Blackfoot, told IdahoReporter.com Friday the state needs to take another look at judicial pensions.

“What we put in place is what we negotiated with the judges,” Lake said. “Quite frankly, I’m surprised they are coming back and asking the state to put in more.”

Prior to the 2012 reforms, the Judicial Retirement Fund was independently managed. The 2012 reforms brought that fund under PERSI’s management. Lawmakers did this because they thought it would provide more oversight and better fiscal management.

The move did not merge the judicial fund with PERSI’s general account, which facilitates pensions for more than 24,000 state workers, teachers and other government employees.

During negotiations for the pension reform bill, judges defended retirement payments, which some see as lavish. A judge earning more than $100,000 a year could take home more than $70,000 annually in retirement payments after meeting certain longevity requirements.

Idaho State Supreme Court Justice Roger Burdick told the Associated Press the posh pensions help the courts retain quality judges.

“We’re not like PERSI, where some of the strategy is to bring in newer, younger employees,” Burdick said. “We need people at the height of their careers.”

Lake suggested Idaho avoid fiddling with benefits. “You don’t mess around with that. You just pay them more,” he said.

Steven Greenhut, a pension expert and author of “Plunder: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation,” urged Idaho to address the lucrative payouts. “Those benefits are absurdly generous,” Greenhut told IdahoReporter.com Friday.

“The benefits need to be trimmed or the judges need to pony up the additional contributions to make the system work.”

Greenhut added that lavish pensions can eat up funding for critical government services. “Sadly, judicial services are some of the most fundamental things our government must provide,” he said.

“If the courts don't have the money to run the system, then justice suffers.”

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
COPYRIGHT © 2024 Idaho freedom Foundation
magnifiercrossmenucross-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram