What if I said you could work part-time and become a millionaire.
Sounds like a spam email from a Nigerian prince, right?
Wrong. It’s the result of a pension loophole Idaho lawmakers wrote for themselves decades ago.
The scheme, which is mostly unknown, quietly costs taxpayers millions. At least 12 former state legislators have collectively boosted their lifetime pension payouts from a combined half million to more than $3.2 million.
For example, former Sen. Dean Cameron, R-Rupert, resigned from the Senate last year to lead the Idaho Department of Insurance. His salary jumped from lawmaker pay — about $16,800 annually — to more than $103,000.
If you’re thinking, “That’s not a millionaire,” then bingo! You’re right.
Cameron won’t become a millionaire during his stint as the agency’s director. But, if he stays in the top Department of Insurance post for at least 42 months, his retirement payout could total just more than $1 million, according to Idaho Freedom Foundation actuarial calculations.
What if Cameron declined the appointment, stayed in the Legislature for the same amount of time and then retired? Based on actuarial calculations, he likely would have earned about $164,000 in total state retirement payments.
In short, if Cameron clears the 42-month employment bar, his part-time legislative service would morph into full-time credit for his pension calculation. Here at IFF, we project Cameron’s pension padding would cost taxpayers an extra $873,000.
Cameron’s total payout after the spike might represent a drop in the bucket for the pension system, which has billions in total assets. But, the extra cash taxpayers would spend on lawmakers-turned-bureaucrats’ pensions could surely be put to better use.
Here’s how the above figures were determined. We estimated Cameron’s monthly pension benefits using the PERSI retirement calculator. That figure was multiplied by the number of months he might receive his benefits. I also adjusted for yearly cost-of-living adjustments using PERSI data.
Other lawmakers are riding with Cameron on the public-pension gravy train.
Former Sen. Joe Stegner, R-Lewiston, has completed the 42-month pension padding bar. Stegner serves as a six-figure lobbyist for the University of Idaho. Hiis pension is at least 8.1 times more than if he simply retired from the Legislature and not taken the job.
In raw dollars, Stegner would have earned a total pension of more than $110,000 for just his time in the Legislature, based on Idaho Freedom Foundation actuarial calculations. Because of the high-paying lobbyist job with the University of Idaho, his total pension will now likely exceed $895,000.
This scheme has bipartisan credentials. Former Democrat Sen. Elliot Werk, D-Boise, can take his total pension payout from $105,302 to more than $585,359 through his retirement, thanks to an appointment to the Idaho Public Utilities Commission.
In 2015, a reform bill to end this pension loophole was scuttled when Sen. Brent Hill, R-Rexburg, tag-teamed with Senate State Affairs Committee Chair Curt McKenzie, R-Nampa, to ensure its demise. During the 2016 session, Rep. Stephen Hartgen, R-Twin Falls, declined to hear a similar measure.
Nevertheless, the political pressure to fix this scheme grows. At its meeting earlier this month, the Citizens Committee on Legislative Compensation urged lawmakers to act on the loophole.
Annsley Brophy and Dustin Hurst also contributed to this report.
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