Employees in eligible positions with the City contribute to the Public Employee Retirement System of Idaho (PERSI). If you are employed in a position working 20 hours or more per week for longer than 5 months you will be enrolled in PERSI.
Employee Contribution - 9.13% (NEW on July 28th paycheck)
Employer Contribution - 12.28%
PERSI Retirement Plan
You become a PERSI (Public Employees Retirement System of Idaho) member when you go to work in an eligible position with a PERSI employer. The longer you work for PERSI employers, the greater your retirement benefit will be. You become fully vested if you belong to PERSI as little as five years (60 months) which means you will receive a lifetime benefit at retirement. Because the PERSI Base Plan is a defined benefit plan, the lifetime allowance you receive at retirement from this plan is not dependent on the amount of money you contribute to PERSI. The Base Plan is a qualified tax-deferred plan under IRS Code Section 401(a).
Base Plan Benefits
Enrollment in the PERSI Base Plan (pension) is automatic. Both you and your employer make contributions to PERSI. Your contributions are credited to your personal account, while employer contributions are pooled in a trust to cover benefits. The actual value of your benefit exceeds your contributions. When you retire as a vested member, PERSI will pay you every month for as long as you live.
In addition to your retirement benefit, your Base Plan contributions provide for disability coverage. As a vested PERSI member, if you should become totally and permanently disabled while an active member, you may be eligible for a disability benefit.
The PERSI Base Plan offers financial security for your beneficiaries after you die. Whether an active or inactive member, if you die after becoming vested and had named your spouse as your sole beneficiary, PERSI will offer your spouse the choice of a lump sum payment of your remaining contributions plus interest or a monthly allowance payable for life. The lump sum death benefit for vested members is two times your account balance with interest. If you die before becoming vested, your beneficiary will receive your account balance plus any interest accrued.
Portability of Funds
Your Base Plan contributions are always yours. If you leave a PERSI employer, but keep your Base Plan money in PERSI and later work for another PERSI covered employer, you retain the service credit earned in your previous job. All service credit you earn while working for a PERSI employer is automatically combined into a single account for you. If you leave PERSI-covered employment, you may withdraw your Base Plan money, plus any interest earned - although tax penalties and withholdings may apply, or you may roll over your money and interest to an Individual Retirement Account (IRA) or other qualified retirement plan, including the PERSI Choice Plan 401(k) if you have an account.
Cost of Living Adjustments
To help benefits keep pace with inflation, the Base Plan offers annual cost of living adjustments (COLAs) to all retirees. Without COLAs, inflation could dramatically reduce the value of your benefit over time. Additional Benefits of the PERSI Base Plan Contributions are secure and protected by state and federal law. Once earned, your lifetime benefit is guaranteed. PERSI is neither funded nor managed like Social Security. It is not a "pay as you go" system. PERSI is designed so the future value of benefits is funded as benefits are earned.
The PERSI Choice 401(k)
The Choice Plan 401(k) is an optional defined contribution retirement savings plan available to active members. Unlike the Base Plan, participation in the Choice Plan 401(k) is completely voluntary. It allows you to contribute a portion of your salary on a tax-deferred basis via payroll deduction. This means your contributions come out of your paycheck before taxes, thereby reducing the amount of taxes you pay during the year. The Choice Plan 401(k) includes a loan provision where members may take a loan for any reason as long as they have a balance of $2000 or more in their account, excluding any gain sharing amounts.
For More Information
To learn more about PERSI, or for more detailed information about your retirement options and benefits, visit the PERSI Web site at: http://www.persi.idaho.gov/. You may also contact the PERSI Answer Center Monday - Friday between 7:30 a.m. and 5:30 p.m. (Mountain Time) by calling (208) 334-3365 in the Boise area, or toll-free (800) 451-8228 from other parts of the state.