Debate over whether Idaho state judges should keep retirement benefits that are about twice as generous as those of other state workers has kept legislators and court officials at the negotiating table since January.
Judges say robust packages for Idaho Supreme Court justices, appellate court and district court judges are essential because experienced lawyers with lucrative private practices would be less likely to consider switching to public service if they were offered less- lucrative benefits like those most other state employees get as part of the Public Employee Retirement System of Idaho, or PERSI.
But with the Judges Retirement Fund showing an unfunded liability of $14 million, or $1.3 million annually shy of covering payouts over 25 years, legislators say changes are a must.
Rep. Dennis Lake says if a compromise isn’t struck, he’ll propose a solution to the Legislature that judges may not be pleased with.
“If we can’t come to an agreement, then we’ll probably run legislation we prepared last year to move district and appellate judges to PERSI,” said Lake, R-Blackfoot.
District judges earning $112,043 now get nearly $73,000 annually when they retire after 16 years, their average service. They can boost benefits to $82,000 by serving five years as a senior judge. When judges die, their spouses get half that amount, up from just 30 percent after changes approved by the 2000 Legislature.
Under PERSI, a similarly situated retiree earning $112,000 would get a benefit of $36,000 annually. Though PERSI also offers payments to surviving spouses, they’re less generous than the judges’ package.
Thirteen Western states have retirement plans for judges distinct from other public employees’ plans, and judges say Idaho should stay that way, too. They argue the profile of most state workers is vastly different from the people who become judges. There’s the expense of law school, and lawyers must gain 10 years of experience before moving to the bench.
“We’re not like PERSI, where some of the strategy is to bring in newer, younger employees,” Idaho Supreme Court Justice Roger Burdick said. “We need people at the height of their careers.”
Burdick added that despite the actuarial shortfall, there’s no crisis.
The Judges Retirement Fund is now 82 percent funded, an improvement from two years ago when plunging stock markets caused funding to dip to just 64 percent. PERSI is hovering around 90 percent funded. The U.S. Government Accountability Office has indicated plans that are 80 percent funded are healthy.
Still, the judges’ fund’s modest $63 million in assets makes it more vulnerable in the event of market fluctuations than larger accounts like the $11.3 billion PERSI.
“The current contribution rates are insufficient,” according to the actuaries’ report from August. “The fund should consider contribution increases to meet the fund obligation to plan members.”
Two bills to close the funding gap have failed in the Idaho House since 2006, in part because they increased revenue without trimming benefits.
The Judges Retirement Fund has three revenue sources, with judges chipping in 6 percent of their pay and the state 7 percent. The bulk comes from an $18 courts filing fee, unchanged since 1990.
In this year’s talks, less-disputed reforms to emerge include a 50 percent increase in contributions from judges and the state over two years, as well as a filing-fee hike.
Much more contentious, however, have been proposals from lawmakers to trim benefits for spouses, as well as a separate judges’ suggestion for Idaho to purchase additional years of service, a move that would further boost their payouts.
“We think we have solved the funding side,” Lake said. “We have not resolved the benefits side.”
And Lake said it’s difficult for him to justify why district and appellate court retirees get more money than magistrate judges, who earn $107,043 annually but fall under PERSI’s plan.
Judges, however, are putting up a spirited defense. There are already too few qualified applicants when judge openings arise, according to a 2010 courts-sponsored study.
Supreme Court Justice Joel Horton said trimming benefits too drastically now would make it even tougher to convince the best lawyers to exit private practice to preside over complex, sometimes life-or-death cases, in posts that are subject to re-election every four years, even if challenges are rare.
