I've been watching and reading the Coeur d'Alene Press series about 'State of the Union' this past week with great interest. On Saturday, April 30, an opinion "special to the Press" from a Mr. Bob Shillingstad, " PERSI: Fiscal train wreck on the horizon?" caught my attention. Mr. Shillingstad paints a picture of total liability and leaves out the asset portion of maintaining a well managed and funded defined benefit retirement system for our public employees and the state of Idaho and to this I'd like to respond.

PERSI provides retirement, disability, survivor, and other benefits to nearly 125,000 members.PERSI members include retirees, beneficiaries, and active public employees working for some 740 employers across the State of Idaho. That's approximately 8 percent of the state population. PERSI's annual payroll is more than $522 million in retirement benefits of which 89 percent ($465 million) stays in Idaho. As of March 25 of this year PERSI has had a fiscal year to date return of 18 percent with an $11.79 million fund value.

According to the National Institute on Retirement Security (NIRS) report "Pensionomics: Measuring the Economic Impact of State and Local Pension Plans," each dollar in taxpayer contributions to state and local pension plans supports more that $11 million in total economic output. Idaho pension benefits support more than 4,200 jobs, which paid $203 million in salaries and wages within the state and resulted in $76.3 million in federal, state and local tax revenues. In regards to the state switching to defined contribution 401(k) from a defined contribution (PERSI) the NIRS goes on to report that the cost to manage a 401(k) style plan ranges from $1.25-$2 per $100 of assets compared to the 10 cents required to manage $100 in a defined benefit (DB) plan (national averages). DB plans, like PERSI, historically achieve higher investment returns than that of DC plans. A 1 percent difference in annual investment returns result in a 26 percent cost saving over a member's working career. Higher investment returns coupled with lower management cost keep costs to the taxpayers reasonable.

Recent articles and editorials such as those by the Cd'A Press and Mr. Shillingstad's regarding the fiscal situation of states and localities have lumped together their current fiscal problems, stemming largely from the recession, with longer-term issues relating to debt, pension obligations, and retiree health costs, to create the mistaken impression that drastic and immediate measures are needed to avoid an imminent fiscal meltdown. Claims made by the Press and Mr. Shillingstad overstate the fiscal problem, fail to acknowledge that severe problems are concentrated in a small number of states, and often promote extreme actions rather than more appropriate solutions. PERSI is not Social Security; a very conservative board appointed by the Governor manages it. We have been through tough economic times before. PERSI was designed to weather these markets downturns. Before this market crash PERSI was funded over 100 percent, currently it's at 88 percent and gaining. Instead of the doom and gloom and fear mongering I choose to see a brighter future for our state and it's citizens.

Sources: PERSI (www.persi.org), Center on Budget & Policy Priorities (www.cbpp.org), National Institute on Retirement Security (www.nirsonline.org)

Tim Turrell is a retired state employee of 37 years from the Idaho Transportation Department. He's currently semi-retired and resides in Hayden. His facts are researched, his opinions are his own.