Idaho Fund Increases COLAs, Lowers Contribution Rates After “Banner” Year

For the Public Employee Retirement System of Idaho (PERSI), fiscal year 2013-14 was a historic one. That’s because the fund returned 17.2 percent – not a staggering return (the S&P 500 returned around 30 percent over the same period), but still one of the best performances in the history of the fund.

The pension fund’s board has rewarded its members in light of the news. The reward includes a significant COLA boost for most retirees. From the Idaho Statesman:

The PERSI board approved a cost-of-living increase for retirees that includes the state-required 1 percent increase, an additional 1 percent increase and up to 2 percent more depending upon when pensioners retired.

Employees who retired between July 1, 2010, and July 1, 2014, will get a 2 percent increase.Employees who retired between July 1, 2008, and June 30, 2010, will get a 2.08 percent increase. Employees who retired before July 1, 2008, will get a 4 percent increase.

The increase is contingent upon a likely 2 percent increase in the consumer price index, which is to be released Wednesday. If it’s less than 2 percent, the PERSI COLA may be slightly adjusted.

Both employees and employers are now looking at lower contribution rates, as well. From the Idaho Statesman:

The PERSI board also voted Tuesday to eliminate two future planned contribution rate increases for active employees and the Idaho government agencies that employ them.

This means employees do not have to worry about a reduction in take-home pay, employers will avoid an increase in their PERSI costs and the contribution rates stay at a lower percentage of pay than 15 years ago, PERSI officials said.

[…]

The PERSI board voted to lower firefighter fund contributions from 17.24 percent of payroll to 5 percent because the fund, which has been closed to new members since 1980, has reached 110 percent of its anticipated benefits. That means the 22 firefighter departments will collectively save $7.75 million every year.

PERSI members since 2007 had been limited to 1 percent cost-of-living increases.