PERSI reports recovery, 87% funded ratio and seeks routine software and hardware spending

The Public Employee Retirement System of Idaho (PERSI) presented its FY2024 operating budget, continued pension software upgrade and fund status to the Joint Finance‑Appropriations Committee, reporting a funded ratio of about 87% and recent investment returns that support long‑term sustainability.

The briefing matters because PERSI administers retirement benefits for roughly 185,000 members and its funded ratio and investment performance influence contribution rates and long‑term liabilities that affect state and local employers and employees.

Legislative analyst Frances Lippitt summarized the agency’s structure and recent appropriations: PERSI administers a defined‑benefit pension and a defined‑contribution (PERSI Choice 401(k)) plan, is directed by a five‑member retirement board appointed by the governor, and operates with authorized staffing of 81 full‑time positions across Boise, Pocatello and Coeur d’Alene. Lippitt said PERSI’s five‑year average authorized FTP is 73.8 with typical fill rates near 89% and average appropriated personnel costs of about $6.2 million.

Lippitt noted a multi‑year pension software upgrade that has driven appropriations and operating expenditures in recent years: a $3,000,000 one‑time appropriation to begin the upgrade (spreading costs over five fiscal years), with ongoing maintenance and hardware requests in the FY2026 package. She said PERSI expended $11.4 million from appropriated funds in FY2024 and that personnel and operating costs have fluctuated with the software project.

Director Mike Hampton provided fund performance and actuarial context. Hampton said the fund had “about a 9% return” in the most recent year following market correction in 2022 and that PERSI’s fund balance is “a little over $22,000,000,000” supporting approximately 185,000 members. He said the funded ratio at the end of the last fiscal year was about 87% and the amortization period is roughly 10.7 years.

Hampton described the board’s approach to cost‑of‑living adjustments (post‑retirement allowance adjustments): the statute provides an automatic 1% adjustment when CPI‑U conditions are met; the board evaluates whether additional retroactive or supplemental adjustments are prudent, taking long‑term sustainability into account before recommending action to the legislature.

On FY2026 requests, Lippitt said PERSI sought two ongoing enhancements totaling $277,100 (including modest travel for board member conferences and a 5% inflation request) and one‑time requests including $3,000,000 for year four of the software upgrade and $628,500 in IT hardware recommended by OITS. The governor recommended the technical enhancements excluding the inflation request and office furniture.

Committee members asked about what appears in the operating appropriation versus continuously appropriated investment expenses. Hampton clarified that investment management fees (contracted investment managers and consultants) are paid from continuously appropriated funds, not the annual operating appropriation. He emphasized the board’s fiduciary role and the fund’s comparatively strong funded status versus many other U.S. systems.

Concluding, Hampton thanked committee members and staff and urged continued support for PERSI’s operational needs; he reiterated that the fund remains comparatively well‑funded and that proposed capital and IT investments support member service delivery and administrative resilience.

More detailed appropriation line items and software upgrade schedules were provided in the agency materials for JFAC review; no legislative decision on FY2026 requests was made at the hearing.