PERSI reports 9% investment return and 87% funded ratio; requests continued software upgrade funding

The Public Employee Retirement System of Idaho (PERSI) briefed the Joint Finance‑Appropriations Committee on its FY2026 budget request, the status of a multi‑year pension software upgrade and the system’s funded status.

Why it matters: PERSI manages retirement benefits for over 185,000 members and the sustainability of the system—its funded ratio, contribution rates and cost‑of‑living adjustments—affects retirees, current employees and employer budgets statewide.

Frances Lippitt, a Legislative Services Office analyst, reviewed PERSI’s structure and recent activity, noting the system was created in 1963, is governed by a five‑member retirement board appointed by the governor, and operates with locations in Boise, Pocatello and Coeur d’Alene. She said PERSI administers defined‑benefit plans and a defined contribution option (PERSI Choice 401(k)), handles the unused sick leave fund for health premium purchases and averaged 73.8 authorized full‑time positions with about an 89% fill rate over five years.

Director Mike Hampton told the committee PERSI had a roughly 9% return in the most recent year and ended the fiscal year with about $22,000,000,000 in assets and about 185,000 members. He said Idaho’s single, statewide pension system covers all public employees in the state and that Idaho compares favorably with most states in funded status.

PERSI reported a funded ratio of about 87% at the end of the last fiscal year and an amortization period of about 10.7 years. Hampton summarized the system’s levers for maintaining funded status: employer contributions, employee contributions and investment returns. He reminded the committee that the board can recommend cost‑of‑living adjustments (COLA) but must weigh long‑term sustainability; he said the board recommended a 1% automatic adjustment plus a 0.3% retroactive increment (total 1.3%) to be considered by the legislature.

On the budget side, Lippitt summarized FY2026 requests that included two ongoing enhancements totaling $277,100 (one item was a $25,000 dedicated travel budget for board member conferences; another was a requested 5% inflation adjustment that was not recommended by the governor). On the one‑time side PERSI requested $3,000,000 for year four of the pension software upgrade, $7,000 for office furniture and $628,500 for IT hardware recommended by OITS. The governor recommended the one‑time software funding and IT hardware but did not recommend the inflationary increase or furniture.

Committee members asked whether investment management fees appear in PERSI’s appropriated administrative budget; Director Hampton explained investment management fees and consultant costs are paid from continuously appropriated funds and do not run through the annual appropriation. Representative Manwaring asked for clarification of what is included in administrative costs and was told appropriated funds cover personnel, software and operating costs while investments and investment manager fees are covered under the continuous appropriation.

Hampton highlighted operational activity: PERSI staff handled over 66,000 phone calls, provided education to more than 14,000 members, completed over 44,000 workflows, and registered more than 37,000 people on a new member portal launched in January. He told the committee that Idaho’s pension system remains well‑funded relative to many other states and emphasized the fiduciary duty to act for the exclusive benefit of members.

No formal committee action was recorded during the presentation.