PERSI Legislation

[Tom Trail <ttrail@moscow.com>]

I've received many calls concerning possible PERSI Legislation  (State
Employee  Retirement
Program).   I'm serving on the Legislative PERSI Committee.   We are
evaluating PERSI and
will be developing legislation for the next legislative session.   I'd like
to share a brief progress
report.

The Investment Performance of PERSI for FY 99 is excellent--highlights.

 . 11.3% return for the year
 . $6.348 billion in assets
 . $654 million investment gain for the year
 . PERSI is now fully funded at about the 112% level
 . Investment returns estimated to be in the top third of comparable funds

PERSI also conducted a comparison of the PERSI plan with the plans of 12
surrounding
states and with about 20 Idaho companies in the private sector.   The
conclusion was that PERSI
ranks near or below median when compared to both public and private plans.

Governor Kempthore has asked the PERSI Board asking them to maintain the
status of the rate
reduction.   The Governor indicates that he would evaluate proposal based
on three criteria.

(1) Nothing should be done to endanger the health of the PERSI fund.
(2) Public employees should not have to bear a decrease in their take home
pay in order to fund
      additional benefits
(3) We must not add an additional financial burden to the state or other
public employers in the
     PERSI system in order to underwrite retirement enhancements.

The Public Sector Leadership Group/Coalition is asking basically for the
same package of PERSI
enhancements that I introduced in the last legislative session.   The major
points were:

(1)  Reduction of the Rule of 90/80 to 85/75.
(2)  Increase the multiplier from l.915 to 2.0.
(3) Reduce the penalty for early retirement

Bob Maynard, Chief PERSI Investment Counselor, reports these enhancements
could be
achieved and the fund would still be be fully funded at about the 104% level.

There is considerable discussion of partially moving toward a defined
contribution program
(advocated by the City of Boise and some members of the Idaho Association
of Cities).   The
investment risk is the responsibility of each participant and the
individual employee controls
investment choice and mix.  Funds are portable and transfer with the
employee.  The PERSI
plan today is a defined benefit program where the investment risk is the
responsiblity of the
institution and the employer controls the investment choices and mix.  In
terms of portablility
unvested funds remain with the employer if employee leaves befoe
retirement.  These are just a
few of the characteristics of the two types of investment approaches.

Our committee will meet again in September in Boise.    Another meeting
will probably be held
in  mid-October where the legislative package will be presented in rough
form to legislative
services to craft into the draft legislation.   Senator McLaughlin, Senator
Stegner, and I have agreed
to hold hearings in Lewiston,  Moscow, and Coeur d' Alene to get citizen
input and discuss the
proposals.   Another meeting in mid-November will allow the committee to
agree on the final
package to present to the Legislature.

I'll keep you posted.

Rep. Tom Trail/Dist. 5

Dr. Tom Trail
International Trails
2039 Mt. View Rd.
Moscow, Id. 83843
Tel:  (208) 882-6077
Fax:  (208) 882-0896
e mail ttrail@moscow.com