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H0172.......................................by COMMERCE AND HUMAN RESOURCES PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law relating to the Public Employee Retirement System to provide an adjustment in the sum of the credited service and age which is applied to the member's service ratio to calculate benefits. 02/04 House intro - 1st rdg - to printing 02/05 Rpt prt - to Com/HuRes
H0172|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 172 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1346, 3 IDAHO CODE, TO PROVIDE AN ADJUSTMENT IN THE SUM OF THE CREDITED SERVICE 4 AND AGE WHICH IS APPLIED TO THE MEMBER'S SERVICE RATIO TO CALCULATE BENE- 5 FITS. 6 Be It Enacted by the Legislature of the State of Idaho: 7 SECTION 1. That Section 59-1346, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 59-1346. COMPUTATION OF EARLY RETIREMENT ALLOWANCES. (1) The annual 10 amount of initial early retirement allowance of a member shall be a percentage 11 of the member's accrued retirement allowance. Such percentage shall be one 12 hundred percent (100%) if the sum of the number of years and months of cred- 13 ited service and the age in years and months is equal to or greater than the 14 sum indicated below. Otherwise, such percentage shall be one hundred percent 15 (100%) reduced by one-fourth of one percent (.25%) for each month up to sixty 16 (60) months that the member's retirement precedes the date the member would be 17 eligible to receive full accrued benefit without additional credited service, 18 and further reduced by two-thirds of one percent (.6667%) for each additional 19 month. Effective October 1, 1992, the further reduction for each additional 20 month shall equal six thousand and forty-two ten-thousandths of one percent 21 (.6042%) of the member's average monthly salary; effective October 1, 1993, 22 the further reduction for each additional month shall equal five thousand four 23 hundred and seventeen ten-thousandths of one percent (.5417%) of the member's 24 average monthly salary; and effective October 1, 1994, the further reduction 25 for each additional month shall equal four thousand seven hundred and nine- 26 ty-two ten-thousandths of one percent (.4792%) of the member's average monthly 27 salary. Entitlement to an annual amount of accrued retirement allowance shall 28 not vest until the effective date of that annual amount of accrued retirement 29 allowance. The retirement benefits shall be calculated on the amounts, terms 30 and conditions in effect at the date of the final contribution by the member. 31 If a member's service retire- Then the sum of the member's Effective 32 ment ratio as defined by section credited service and age must be September 30, 33 59-1341, Idaho Code, is: equal to or greater than: 1999 : 34 0.000 to 0.050 90 85 35 0.051 to 0.150 89 84 36 0.151 to 0.250 88 83 37 0.251 to 0.350 87 82 38 0.351 to 0.450 86 81 39 0.451 to 0.550 85 80 40 0.551 to 0.650 84 79 41 0.651 to 0.750 83 78 42 0.751 to 0.850 82 77 43 0.851 to 0.950 81 76 2 1 0.951 to 1.000 80.75. 2 (2) If the majority of a member's credited service is as an elected offi- 3 cial or as an appointed official, except as a member of the Idaho legislature, 4 and that official was normally in the administrative offices of the employer 5 less than twenty (20) hours per week during the term of office, or was nor- 6 mally not required to be present at any particular work station for the 7 employer twenty (20) hours per week or more during the term of office, that 8 member's accrued retirement allowance for service credited only during that 9 period shall be computed from an average monthly salary for salary received 10 during that period of such employment only. The initial service retirement 11 allowance of members of the Idaho legislature will be computed under the pro- 12 visions of this section, on the basis of their total months of credited ser- 13 vice. 14 (3) If that member has credited service from any other employment, the 15 accrued retirement allowance for the credited service from such other employ- 16 ment shall be computed from an average monthly salary for salary received dur- 17 ing the period of such other employment.
STATEMENT OF PURPOSE
RS 08802
This legislation will change the current calculation used by the Public Employee
Retirement System of Idaho (PERSI) to determine when a participant is eligible for
unreduced retirement benefits. Specifically, it amends Section 59-1346 by adjusting the
credited service and age requirements, providing the "Rule of 85" for general employees
and the "Rule of 75" for police members and firefighters.
FISCAL NOTE
This bill would increase the normal cost of the PERSI system by .45% of pay, which
increases the total temporary contribution rate from 15.78% to 16.23%. Of this increase,
.28% will be the responsibility of the employers, .17% the responsibility of general
employees, and .20% the responsibility of police members and firefighters. As of July 1,
1998, PERSI's actuaries reported that the system's unfunded liability has been completely
eliminated; and, in fact, the funding ratio stood at 108.6%. The actuaries also estimated
that, had the changes proposed in this legislation been in effect, that ratio would have been
reduced to 105.6. (a reduction of 8144.8 million, leaving $269.9 million more in assets
than liabilities). The proposed improvements can be implemented without increasing the
total employer and employee contribution rate above the current permanent rates of
17.78% that has been established by the PERSI Board and which should have been
budgeted for by employer units. The total contribution rate is assumed to go to the permanent rate
on November 1, 1999, if the Board takes no action to extend the temporary period.
CONTACTS
Representative Tom Trail (Eor all contacts:
Representative Tim Ridinger 208-332-2100)
Senator John Andreason
OTHER CO-SPONSOR';
Representative Max Black Senator Cecil Ingram
Representative Wendy Jaquet Senator Shawn Keough
RS08802 Page 2
Representative Doug Jones Senator Marguerite McLaughlin
Representative Bert Marley Senator Gary Schroeder
Representative Shirley Ringo Senator Sheila Sorensen
Representative Ruby Stone Senator Betsy Dunklin
STATEMENT OE PURPOSE/ FISCAL NOTE Bill No. H 172