Legislative update on state employee salaries and retirement plan

[Tom Trail <RepTrail@infotrail.com>]

Our Employment Compensation Committee in the Legislature met during the past
two days discussing various issues concerning state employees.  District 5
has the highest per capita # of state employees of any district in the
state.  We discussed two items of interest for state employees.

1.   Potential salary increase---Governor Kempthorne will make this proposal
in his budget.  The best estimate that we hear at this time is 3%.  The CEC
Committee will meet on Thursday to either accept or reject the
Governor's proposal and to make recommendation in the allocation of the
increase.

2.  PERSI--State Retirement Plan--this includes state employees, school
teachers, city and county employees, fire fighters, law enforcement, and
several other groups.  A major bill--the NO COST PERSI Retirement Equity
Bill will be introduced this session.  Idaho lags behind surrounding states
and the private sector in terms of it's retirement plan.

     An improved retirement plan would serve both as a positive incentive
for recruitment and retention of personnel.  The PERSI fund is well managed
and realized a return of 17.6% this past year.  The fund now has in
excess of $500 million in assets over liabilities.  The fund is in a
position to move from the Rule of 90 to 85 for most employees and from 80 to
75 for law enforcement and fire fighters.  This would place us on a par
with sister states.  Employees have been granted a 2% temporary reduction in
the contribution rate by the PERSI Board and to help fund the plan about
1.3% of the reduction in the contribution would be needed.  The passage
of Phase IV of the bill would increase retirement benefits by about 5%.

    We still need to hear the Governor's position on the bill, but
financially the economic situation is right to move forward to pass the
bill.  Any comments and suggestions will be appreciated.

Rep. Tom Trail/District 5