PERSI reports 87% funded ratio, seeks continued IT and administrative support

PERSI (the Public Employee Retirement System of Idaho) told the Joint Finance-Appropriations Committee it ended the most recent fiscal year with an approximate funded ratio of 87% and is requesting continued support for a multi-year pension software upgrade and limited ongoing administrative enhancements.

Frances Lippitt, a Legislative Services analyst, summarized the agency’s structure and budget. PERSI administers a defined-benefit pension system for public employees and a defined-contribution (401(k)) option, operates from several dedicated funds and is overseen by a five-member retirement board appointed by the governor.

Why it matters: PERSI manages pensions for roughly 185,000 members and pays retirement benefits that are continuously appropriated; the system’s investment returns and funding status affect future contribution rates and the long-term sustainability of benefits.

Budget and operations: Lippitt said PERSI’s appropriated administration expenditures were about $11.4 million in FY2024, with personnel accounting for about 56.6% of that amount. The agency reported a 10% vacancy rate and a 24.6% turnover rate in FY2024. Lippitt noted a multi-year, $12 million pension-software upgrade that began with a $3 million one-time appropriation in FY2023 and is budgeted over five fiscal years; $3 million was requested for year four of the upgrade in the FY2026 request.

Director Mike Hampton, PERSI’s director, told the committee the fund returned roughly 9% in the most recent year and that the system’s assets were a little over $22 billion. He described Idaho’s PERSI as a single, statewide pension system covering multiple classes of public employees and said Idaho’s funded ratio places it among the better-funded public pension systems nationally.

On cost-of-living adjustments, Hampton explained the statutory process for post-retirement allowance adjustments and the board’s role in recommending adjustments that the legislature must approve; he noted the board recommended a 1% automatic COLA plus a 0.3% retroactive supplement to address prior years, for a total 1.3% this year if approved by the Legislature.

Requests and enhancements: PERSI’s FY2026 request includes two ongoing items (a modest amount to support travel for board members’ conferences and an inflationary request the governor did not recommend) and one-time items including $3 million for the pension software upgrade, about $628,500 for IT hardware, and small office furniture requests. The governor recommended most of the one-time IT and hardware items but did not recommend the inflationary ongoing request.

Committee questions covered what is included in administrative appropriations (personnel, operating costs and software), whether investment-management fees run through appropriated funds (they do not — those are in continuously appropriated investment funds), the rationale for the board’s COLA recommendation, and the long-term funded status. Hampton said the board balances benefit recommendations against the long-term sustainability of the fund and noted Idaho’s amortization period was about 10.7 years.

Discussion and direction: lawmakers asked for clarification of line items and the difference between appropriated administrative costs and continuously appropriated investment expenses. No formal committee votes occurred at the hearing.