learns from 9 years on PERSI board
ITD employees and other state workers are assured of a strong, growing retirement system that will provide for their needs in life beyond work.
The health of the Public Employee Retirement System of Idaho relies, in significant part, on volunteer trustees like ITDs Sue Simmons, who stepped down July 1 after more than nine years of service.
Trustees oversee PERSI investment activities (including the hiring of investment managers), review and adopt actuarial assumptions, oversee administrative activities, approve legislation, review and approve disability retirement applications and set contribution rates.
Simmons, first appointed to the five-member PERSI board by Gov. Phil Batt in February 1995, watched the retirement fund rebound from turbulent times early in the decade to become a sound, stable fund today. The plan increased from less than $3 billion in 1995 to nearly $8 billion at a time when the number has leveled off.
She worked in the Division of Financial Management when she was appointed to fulfill an unexpired five-year term. She was subsequently was reappointed and confirmed by the Legislature in 1999.
The fund was buffeted by the economic downturn of the early 2000s and experienced three consecutive sub-par annual performances. The fund was negative 6.1 percent in FY01, negative 7.1 percent the following year and grew by 3.7 percent in FY03. To meet anticipated retirement needs, the fund needs to earn at least 8 percent annually, provided that all actuarial assumptions materialize, Simmons said.
The fund rode the crest of high economic tides in the late 1990s and in 2000. It was 113 percent funded, providing a cushion against one or two slow years. But the recession lasted longer than anyone anticipated, recovering from two negative years with slight growth in FY03, that left it under-funded.
Rather than trying to immediately recoup the shortage, trustees decided to defer the necessary rate increase until 2004. The delayed increase became effective last month.
As a certified public accountant (CPA), Simmons brought a strong financial management background to the board. She was appointed because of her familiarity with state budgets, procedures and finance.
It was a very rewarding, very educational experience, she said reflecting on her nine years of PERSI service. It gave me a better understanding of our retirement system, and an appreciation for what a good retirement plan we have.
It was gratifying to watch how the fund did over time and was fascinating to watch the different investment styles that influenced the fund.
PERSI benefits from an aggressive investment philosophy and a diversity that helps it avoid extreme peaks and valleys that result from a fluctuating economy.
In contrast to many other state retirement systems, Idahos offers participants a defined benefit, meaning a guaranteed monthly payment during retirement, based on service years and salary. Idahos system also includes an annual cost of living adjustment of at least one percent.