Time for legislators to stop the plundering of the Idaho retirement system

In 1990 the Idaho Legislature unconstitutionally exempted itself from the statute pertaining to the retirement calculation for part-time elected officials who later became full time. This was done without the knowledge of the citizens committee that has the constitutional authority to set compensation for legislators.

The effect of the 1990 law allows these employees (usually governor-appointed) to triple or quadruple their retirement benefits. In the case of one recent appointee, this will cause his retirement to go from approximately $19,000 per year to around $65,000 per year. Over his life expectancy, he would take over $1 million more from PERSI (the Idaho Retirement Fund). In this case and the other 20 to 26 cases like this, the PERSI fund received no corresponding contribution (unfunded benefits). These unfunded benefits, estimated to be as much as $30 million, are paid by the working PERSI members and taxpayers. Such perks have been the downfall of other states’ retirement funds.

In 2015 the House passed HB100, which would have removed this exemption. The bill then went to the Senate, where it was killed by the leadership.

In June 2016, the citizens committee strongly recommended that the Legislature reconsider HB100. However, efforts are still being made by some legislators to oppose a similar bill to remove the exemption.

Some of their reasons for not taking away this exemption run from invalid to nefarious:

▪  A law to remove this benefit would be unconstitutional. Evidently constitutionality was not an issue when they passed the 1990 law that gave themselves this benefit. In any event, the attorney general has ruled that HB100 would be constitutional.

▪ The argument put forth by Gov. Butch Otter and many of the legislative leadership is that without this unearned benefit, these appointees would not accept those positions. If this is the case, these are not the type of people we need in these positions. Furthermore, within the state agencies and elsewhere in Idaho there are many other qualified individuals.

▪ If present legislators are deprived of his or her expectation of receiving this benefit, it would be an “illegal taking.” Losing the opportunity to enrich oneself through an unfunded and unconstitutional benefit can not possibly be considered illegal.

During this 2017 session, some legislators plan to comply with the mandate of the citizens committee and introduce a bill similar to HB100.

We urge you to contact your legislators and tell them to support the bill to eliminate the benefit. We invite anyone interested in helping us or needing more information to contact us.

A member of the citizens committee said “this exemption did not pass the smell test.” We agree.

This story was originally published February 2, 2017 at 10:55 PM with the headline "Time for legislators to stop the plundering of the Idaho retirement system."