PERSI

[Tom Trail <ttrail@moscow.com>]

Visionaries:

The Legislative Committee for PERSI (Idaho State Employees Retirement
System) had their last meeting on Wednesday. Listed below is a summary of
their
>recommendations which will be forwarded to the legislature in January.
>
> 1.   Keep the fund fully funded at 100%
> 2.   Maintain a strategic reserve to offset negative market
>flucuations--funded at 112%
> 3.   PERSI's porfolio is valued at $6,880,000,000 today which is about
>114% fully funded
> 4.   Approved a gain sharing concept--all money at the end of the fiscal
>year which is above
>        the 112% level of funding will go into a pool to be distributed
>between employers, employees,
>        and retires.   In these years of good times we could be looking at
>$200,000,000 or more.
>        The down side is unless we have a future contribution increase
>that none of the
>        other proposed Direct Benefit enhancements can be funded.   Once
>we get to the 112% level
>        all money kicks into the gain sharing pool.
> 5.    The gain sharing pool would be divided--both 40% to employers and
>40% to employees,
>         and 20% to retirees which would in essence be a 13th check.
> 6.    If the good years continue to roll the employers get the 40% back
>from the pool as a future
>        credit on contributions.   It is possible if we continue with good
>market conditions that
>        employees might not be paying any contributions.
> 7.   Employees will have the opportunity to set up 401 (k) type plans to
>invest their gain
>       sharing monies.    PERSI will develop a series of portfolio options
>and also contract with
>       outside vendors.    Their will even be the opportunity for
>employees to invest on line.
>       You could sense the aura of potential money during the meeting as
>swarms of representatives
>       of brokerage houses and mutual funds filled the meeting room.
>There will be commissions
>       potentially in the millions to be made.   Several of us want to
>make certain that PERSI has
>       the greatest opportunity to offer employees the investment
>opportunities and eliminate some
>       of the outside commissions to vendors.
> 8.  The Committee also recommended the multiplier to be increased from
>l.91 to 2.0.  We thought
>      there might be an attempt to defeat this after it had passed by a
>7-5 vote previsouly.  However,
>      we will need to fight to get the support through the legislature
>because I'm certain there will
>      be attempts to defeat it during the legislative session.
>
>9.   PERSI is going to change from regular investment rates to investment
>rate return effective
         Jan 1, 2000.   This means that retirees will receive the rate of
11.1% instead of the old
         type of rate which would have been nearer 6 %.

Rep. Tom Trail/Dist. 5
>
>

Dr. Tom Trail
International Trails
1375 Mt. View Rd.
Moscow, Id. 83843
Tel:  (208) 882-6077
Fax:  (208) 882-0896
e mail ttrail@moscow.com