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Guideline Idaho Attorney General Reports and Opinions 1 (2011)

handle is hein.sag/sagid0039 and id is 1 raw text is: STATE OF IDAHO OFFICE OF THE ATTORNEY GENERAL LAWRENCE G. WASDEN February 3, 2011 Don Drum PERSI Executive Director P.O. Box 83720 Boise, ID 83720-0078 THIS CORRESPONDENCE IS A LEGAL GUIDELINE OF THE ATTORNEY GENERAL SUBMITTED FOR YOUR GUIDANCE Re: PERSI 1% Mandatory Cost of Living Adjustment (COLA) Dear Mr. Drum: When the inflationary requirements are met, Idaho Code § 59-1355 of the Public Employee Retirement System of Idaho (PERSI) statutes provides for a 1% mandatory cost of living adjustment to retiree benefit payments (the 1% COLA). QUESTIONS PRESENTED 1. Do current PERSI retirees have a vested (contractually protected) right to the 1% COLA? 2. Do non-retiree members of PERSI have a vested right to the 1% COLA (after retirement)? 3. If there is a vested right to the 1% COLA, under what circumstances, if any, can the 1% COLA be eliminated for either current PERSI retirees or non-retiree PERSI members? The PERSI COLA is tied to inflation/deflation based on the Consumer Price Index - Urban (CPI-U) for the 12 months ending August of the current year and becomes effective the following March. Idaho Code § 59-1355 provides for a mandatory COLA ranging from -6% to 1% if the CPI-U is between -94% and 101%. If the CPI-U is above 101%, the statute provides that the COLA shall be 1% (called the 1% COLA). The 1% COLA is not subject to Legislative review. If the CPI-U is above 101%, the PERSI Board can provide a greater COLA (called a discretionary COLA) (not to exceed 6%) if it finds that the Fund's actuarial assets exceed its actuarial liabilities (including the increased liability that would be created by the COLA). The discretionary COLA is subject to Legislative review. P.O. Box 83720, Boise, Idaho 83720-0010 Telephone: (208) 334-2400, FAX: (208) 854-8071 Located at 700 W. Jefferson Street, Suite 210

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