Retiree: Legislators’ pension scheme “disrespects” government employees

Retiree: Legislators’ pension scheme “disrespects” government employees

by
Dustin Hurst
June 24, 2016
Dustin Hurst
Author Image
June 24, 2016

For more than 22 years, Lewiston resident Velva Marsh performed a labor of love at State Hospital North, a mental health facility in Orofino.

For six of those years, she toiled in the hospital’s psychiatric unit, administering medicine, assisting doctors and performing other medical-related tasks. For the other 16 years, Marsh worked in the hospital’s business office, but still acted as a go-between for several of the hospital's departments.

Though she recalls those years with fondness and admiration for her colleagues and the patients, she affirmed that the job was challenging.

“It was very stressful,” she told IdahoReporter.com this week.

Her stress didn’t ruin her experiences at the facility, though.

“I felt like it was a very worthwhile job,” she said. “People who work with the mentally ill are special people.”

Marsh, now in her 91st year, retired in 1990, though not entirely willingly.

“My husband was very ill,” she notes. “I would have liked to stay longer but it was time for me to leave.”

Looking back, she knows she made the right decision. Her husband passed within a year of her retirement from the facility. Not working gave her the freedom to give him her undivided time, attention and love during his final days.

Her retirement also gave her something else: a steady pension income which, though not lavish, would sustain her through her life.

Marsh participated in the Public Employee Retirement System of Idaho (PERSI). Thanks to her 22 years of service, she earned the right to a $900-per-month pension payment from the state. She also receives a monthly Social Security check each month for a similar amount.

She’s protective of PERSI. Lately, Marsh has taken umbrage with a number of former state lawmakers who game the system to boost their pensions by stratospheric rates.

“It’s not fair,” Marsh said of the Politician Pension Payoff scheme.

Here’s how the politician-pension scheme works: A legislator serves a long tenure in the Capitol, and pays a small sum into his retirement account from the part-time salary. He then wins a gubernatorial appointment to a higher-paying state job.

The former legislator stays in that high-paying post for at least 42 months. After that, the state pension system converts his part-time service in the Capitol to full-time -- under the higher salary rate of the state job. That is, the former legislator’s life-long pension payout is now calculated using his short-term much-higher salary figure.

Pension increases of more than 500 percent are common. Last year, this perk spiked one former legislator’s retirement fund payout by more than 800 percent.

This system has been in place since the early 1990s, when state lawmakers wrote the loophole for themselves. Idaho city and county governments have plenty of part-time mayors, councilors and commissioners. However, part-time state lawmakers, who write the laws, are the only public officials who qualify for this loophole.

Marsh see problems with the arrangement, which she called “crooked.”

Further, Marsh asserts, converting politicians’ part-time pension credit to full-time -- thanks to a mere 42 months at a high-paying state job -- is disrespectful. She notes, the scheme disrespects government employees who work full-time, year-round for decades to earn their modest pensions. This disrespect extends to firefighters and police officers, who daily put their lives on the line.

“Why do [legislators] get to have something different than we do?” she asked. “We are all state employees, except we are working eight hours a day every day.”

In raw dollars, the Politician Pension Payoff scheme allows many lawmakers-turned-bureaucrats to leapfrog other government retirees in terms of monthly payments.

For example, Sen. Dean Cameron, who now leads the Idaho Department of Insurance and earns more than $100,000 a year in the post, will likely take his monthly pension payment from $700 for just his legislative service to more than $4,500. Cameron’s monthly increase would be more than 525 percent.

Marsh hardly stands alone in her opposition to the arrangement. At a Citizens Committee on Legislative Compensation meeting earlier this month, Pocatello attorney Reed Larsen offered a blistering take.

“It’s almost like insider trading,” Larsen said. Lawmakers “know those benefits are there. They know how to take advantage of the system.”

“It just smells to me,” Larsen said. “I don’t think it should be an additional avenue of compensation.”

The Idaho Constitution mandates the citizens panel suggest legislator pay and benefits in a report to the Legislature every other year. The Legislature can next decide to accept the committee’s report during the early days of the 2017 session.

Other citizens panel members, including former Sen. John Goedde, R-Coeur d’Alene, defended the arrangement. Goedde and allies argued that lawmakers might only work in Boise three months per year, but they perform their duties year-round, thus making the whole issue void.

Last year, pension expert and author Steven Greenhut told IdahoReporter.com the scheme is a bad look for public officials.

“It probably doesn’t mean much in terms of overall dollars,” Greenhut said. “But spiking does reinforce the unfairness of the system and the games-playing of officials who tend to have an entitlement mentality.”

In its report to the Legislature, the citizens panel encouraged lawmakers to remedy the situation and deliver a final solution on the scheme.

A bill to end Politician Pension Payoffs passed the House in 2015, despite Republican leadership’s attempt to kill the measure. The victory was short-lived, though. When the measure arrived in the Idaho Senate, Pro Tem Brent Hill, R-Rexburg, directed the bill to a pet committee, where the legislation died an unremarkable death.

Marsh doesn’t begrudge lawmakers earning a pension for their service to the state, but she tires of lawmakers exploiting loopholes to cash in at taxpayer expense.

I wouldn’t mind them having a pension, but I don’t think it should be a big pension,” she said. “Maybe $300 or $400 month.”

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