PERSI tells JFAC it remains well‑funded at ~87% and requests software funding, board recommends modest COLA

The Joint Finance‑Appropriations Committee reviewed the Public Employee Retirement System of Idaho’s (PERSI) FY2026 budget request, heard a summary of recent markets and the system’s funded status, and discussed continued funding for a multi‑year pension software upgrade.

Legislative analyst Frances Lippitt opened the briefing with an overview of PERSI’s organization, noting the system was created in 1963, funded by the legislature in 1965, and provides a defined‑benefit pension to career public employees. Lippitt said PERSI is authorized for 81 full‑time staff across Boise, Pocatello and Coeur d’Alene and reported that PERSI averaged about 73.8 filled positions over the past five years with roughly an 89% fill rate.

Why it matters: PERSI manages retirement benefits for more than 185,000 members and administers pension payments totaling into the hundreds of millions of dollars; changes to PERSI funding, cost‑of‑living adjustments (COLAs) or contribution rates have long‑term fiscal implications for the state, employers and employees.

Key numbers and recent developments

- Investment returns and funded ratio: Director Mike Hampton told the committee the system posted “about a 9% return” in the most recent year and said PERSI ended the fiscal year with roughly $22.0 billion in assets. He said PERSI’s funded ratio was approximately 87% at the end of the last fiscal year. - Pension payments and operating costs: Lippitt said continuously appropriated pension payments totaled roughly $245.9 million in the most recent year. Appropriated administrative expenditures were about $11.4 million in FY2024, with personnel accounting for about 56.6% of those costs and operating expenditures representing the remainder. - Pension software upgrade: PERSI is mid‑way through a multi‑year pension software upgrade. Lippitt said the upgrade is funded with a five‑year, $12 million plan (a $3 million annual one‑time tranche in prior years); PERSI requested $3 million in FY2026 for year four of the software project and $628,500 for IT hardware recommended by OITS. Hampton said the agency expects ongoing maintenance costs to remain consistent after the upgrade because maintenance for the current system is already budgeted.

COLA, board process and contribution levers

Committee members asked about cost‑of‑living adjustments. Hampton explained the statutory process and said the board recommended, in addition to the statutory automatic 1% adjustment, a 0.3% retroactive adjustment going back to 2020; that combination would total a 1.3% increase if the legislature approves it. Hampton said the board carefully considers sustainability and long‑term funded status before recommending COLAs.

Hampton described the limited levers available to preserve funded status: investment earnings, employee contributions and employer contributions. He said the fund’s current amortization period is 10.7 years, well within statutory targets, and that the board’s fiduciary duty is to preserve long‑term sustainability.

FY2026 requests

PERSI’s FY2026 package includes two ongoing enhancements of $277,100 (for travel for trustees and a 5% inflationary request referenced by the agency, though the governor did not recommend the inflationary increase), and one‑time requests that include $3 million for year four of the pension software upgrade, $7,000 for office furniture and $628,500 for IT hardware. Lippitt said the governor recommended these items except for the inflationary request and office furniture.

Operational context

Hampton emphasized the operational scale: PERSI staff handled more than 66,000 phone calls, provided education to more than 14,000 members, completed over 44,000 administrative workflows in the year and registered some 37,000 users to the new member portal. He said Idaho’s single statewide pension system and consistent governance make PERSI one of the better‑funded public pension systems nationally.

No committee votes were recorded during the presentation. The committee asked clarifying questions about administrative costs, which items are charged to appropriated funds versus continuously appropriated investment accounts, and the projection of funded ratios.

Speakers (selected)

Frances Lippitt, budget and policy analyst, Legislative Services Office; Mike Hampton, director, Public Employee Retirement System of Idaho; Alex Simpson, deputy director; Mike Anderson, CFO; trustees Darren D’Angeli and Jeff Selig; members of JFAC including Vice Chair Woodward and Senators Cook and Wintrow.

Sources and documents cited

Analyst slides in the Legislative Budget Book (LBB), the agency’s FY2024 expenditure reports, and documentation of the five‑year pension software upgrade.