Policy lets some lawmakers reap huge retirement benefits
Some state lawmakers are cashing in on a perk that allows big spikes to their retirement funds.
Three long-time legislators have recently been appointed by the governor to direct agencies in Idaho. It means a bump in their salaries compared to what they might earn as part-time legislators. And it means an increase in their Public Retirement System of Idaho (PERSI) accounts.
Wayne Hoffman, president of the Idaho Freedom Foundation, said this is inappropriate.
“It’s nothing more than a political payoff,” he said. “It’s as simple as that.”
Here’s how Hoffman explains it: Members of the Legislature are considered part-time employees as they work three months a year. But if they get appointed to run an agency, they get to count the years they were in the Legislature as full-time employment, which can make a big difference in their monthly benefits when they finally do retire.
“It’s an incredible amount of cronyism.” – Wayne Hoffman, Idaho Freedom Foundation
In the case of former Sen. Dean Cameron, R-Rupert, if he had retired from the Legislature this year, he would have earned $8,500 in pension payments annually based on his three months a year. But now that has been appointed by the governor to be director of the Department of Insurance, if he serves 42 months in that position, his pension payments jump to $55,000 a year because he counts all these legislative years as full time. He is “elected/appointed,” so he gets credit for all months served, regardless of how many hours he works. In other words, because he has been a legislator, he is exempted from the “split calculation,” which gives him a huge retirement bump.
And Cameron isn’t the only one. This year, other lawmakers have been appointed by Gov. C.L. “Butch” Otter to high-paying state posts . They include former Senate Pro-Tem Bob Geddes, R-Soda Springs, to the State Tax Commission and Sen. John Tippets, R-Montpelier, to the Department of Environmental Quality.
“I’ve got to pick the best people, and the best people just happen to be those that have served on the germane committees that have been oversight for the agency and have dealt with the political and administrative realities of those agencies.” – Gov. C.L. “Butch” Otter
“It’s an incredible amount of cronyism,” said Hoffman.
Dennis Lake, a Republican from Blackfoot who served in the Idaho House of Representatives for years, said he thinks this policy is wrong.
“That’s what it is — a pension spike,” said Lake. “What’s wrong with that is the legislators put this benefit in place for themselves a number of years ago. That’s what’s wrong with it. Does a mayor qualify? No. Nobody qualifies to do this except 105 legislators. That’s what’s wrong with it. This is all about, is it right for the Legislature to vote themselves this kind of benefit?”
But Senate Majority Leader Bart Davis, R-Idaho Falls, said the plan helps the state hire the best of the best.
“I need to have a public policy that works and invites quality capable people at the prime of their career to be willing to make changes to do it,” said Davis. “Otherwise, what you’re left with is a selection pool that are still good people, but they don’t bring some of the experience that other candidates might be able to bring.”
Hoffman disagrees.
“They’re going to say, ‘This is how you lure good people to be bureaucrats in state government,'” said Hoffman. “And it’s an interesting argument. It’s as if we have 1.5 million people in the state, and only 105 of them are capable of being agency directors. Well, that’s just nonsense.”
Otter said he’s merely picking the right people for the job.
“I’ve got to pick the best people, and the best people just happen to be those that have served on the germane committees that have been oversight for the agency and have dealt with the political and administrative realities of those agencies,” Otter said.
Lake has no argument with the appointments — it’s just the way retirement benefits are determined for lawmakers.
“My problem and the reason I looked at this along with other legislators — this is not something I dreamed up myself — the problem with this is it applies to just legislators, and it’s a benefit that they voted for themselves a number of years ago,” Lake said. “Very few legislators have been in a position to take advantage of it, but those that can take advantage of it — it can be a huge windfall that they probably are not entitled to.”
But “you get what you pay for,” Otter said. And Davis said the benefit to Idaho has been substantial.
“If we weren’t managing our retirement fund well, or we were putting in a bunch of rascals that weren’t doing the job, well, I think we’d be having a different conversation,” said Davis. “With few exceptions, taxpayers were able to harvest on some pretty good women and men.”
Opponents of the benefit plan say the law should be changed so that legislators in pension plans would be treated like everyone else. A bill to do just that passed the House in the last legislative session, but ultimately faded away. Hoffman said it will come up again next session.
“A lot of these legislators will earn in retirement more than Idaho families earn all year long working,” said Hoffman.
