The Idaho Public Employee Retirement System (IPERS) is governed by specific statutes and administrative rules that dictate how retirement benefits are calculated and administered for state employees. The determination of a member’s retirement benefit is primarily based on a formula that considers their years of credited service and their average final compensation. Average final compensation is typically calculated as the average of the member’s highest consecutive years of compensation, as defined by IPERS rules. Idaho Code § 59-1301 et seq. and the associated administrative rules outline the precise methodology for calculating these components. For instance, if a member has 25 years of credited service and an average final compensation of $60,000, and the IPERS formula multiplier is 1.75%, their annual retirement benefit would be calculated as: 25 years * \(0.0175\) * $60,000 = $26,250. This calculation illustrates the direct relationship between service credit, compensation, and the benefit multiplier. The explanation of this calculation shows how credited service and average final compensation are used in conjunction with a statutorily defined percentage to arrive at an annual pension amount. Understanding the nuances of what constitutes “credited service” and how “average final compensation” is derived, including any limitations or adjustments, is crucial for accurately assessing retirement income under IPERS. This involves adherence to the specific definitions and calculation methods provided within Idaho’s retirement system statutes and regulations, ensuring compliance and accurate benefit projections for public employees.

The Idaho Public Employee Retirement System (IPERS) is governed by specific statutes and administrative rules that dictate how benefit calculations are performed. For a member retiring with a service retirement allowance, the calculation typically involves a formula that considers the member’s final average compensation, years of service, and a multiplier. The multiplier is often determined by the member’s age at retirement or the type of service rendered. In Idaho, the calculation for a service retirement allowance is generally structured as follows: \(Benefit = Final Average Compensation \times Years of Creditable Service \times Multiplier\). The final average compensation is usually based on the highest consecutive months of earnings, often 36 months. The multiplier is a percentage that increases with age and service. For instance, a common multiplier structure might be 2% for each year of service, with adjustments for early retirement. However, specific provisions within IPERS law may introduce nuances. For a member retiring at or after age 65 with 30 years of service, the calculation would use their final average compensation and the applicable multiplier for that age and service. The question asks about the correct *method* of calculating the benefit, not a specific dollar amount, implying a focus on the statutory framework. The relevant Idaho Code sections, such as Title 59, Chapter 13, outline the structure of retirement allowances. Understanding the interplay between final average compensation, creditable service, and the age-based multiplier is crucial. The core principle is that the benefit reflects a portion of the member’s career earnings, adjusted for the duration of their service and their age at retirement.

In Idaho, the Public Employee Retirement System (PERSI) is governed by specific statutes. When a PERSI member separates from service and is eligible for a retirement benefit, they have several options regarding how their benefit is paid. One crucial aspect is the treatment of post-retirement employment and its impact on benefit payments, particularly concerning the concept of “reemployment” within the PERSI system. Idaho Code Section 59-1301 et seq. outlines the rules for PERSI. Specifically, for a member who has retired and is receiving a disability retirement benefit, reemployment with a PERSI-covered employer is strictly regulated. If a PERSI disability retiree is found to be able to return to their previous or a comparable position, and they do so with a PERSI-covered employer, their disability benefit may be recalculated or terminated, depending on the specific circumstances and the nature of the reemployment. The law aims to ensure that disability benefits are provided to those who are genuinely unable to work, and that reemployment does not circumvent the system’s integrity. The recalculation typically involves assessing the member’s current earnings against their pre-disability earnings and the disability benefit itself, often leading to a reduction or cessation of the disability benefit if the reemployment earnings are substantial. This ensures that the system’s resources are preserved for those who continue to meet the criteria for disability retirement.

In Idaho, the Public Employee Retirement System of Idaho (PERSI) is governed by specific statutes that dictate benefit calculations. For a PERSI member who is a general employee and has elected to participate in the defined benefit plan, the retirement benefit is typically calculated using a formula that involves the member’s final average salary and their service credit. The final average salary is generally the average of the highest consecutive 60 months of compensation. The service credit is the total number of years of creditable service. The benefit is then calculated as a percentage of the final average salary multiplied by the service credit. This percentage is determined by the member’s age at retirement and the plan’s provisions. For instance, if a member retires at normal retirement age with 30 years of service and a final average salary of \$60,000, and the benefit factor is 2% per year of service, the annual retirement benefit would be calculated as \(0.02 \times 30 \times \$60,000 = \$36,000\). However, if the member retires before the normal retirement age, the benefit may be actuarially reduced. Idaho Code Title 59, Chapter 10, outlines the structure and benefits of PERSI. Understanding the interplay between final average salary, service credit, age at retirement, and the applicable benefit factor is crucial for accurate benefit projection and understanding retirement entitlements under Idaho law. The question tests the understanding of how these elements combine to form the retirement benefit, specifically focusing on the reduction for early retirement. If a member retires at age 60 with 30 years of service and a final average salary of \$70,000, and the normal retirement age is 65, the benefit is reduced. Assuming a reduction factor of 0.5% per month for each month prior to normal retirement age, and the member is 5 years (60 months) early, the reduction would be \(0.005 \times 60 = 0.30\) or 30%. The unreduced benefit would be \(0.02 \times 30 \times \$70,000 = \$42,000\). The reduced benefit is then \(\$42,000 \times (1 – 0.30) = \$42,000 \times 0.70 = \$29,400\).

The Idaho Public Employee Retirement Act (IPERA) governs retirement benefits for state and local government employees in Idaho. When a participating employee separates from service with a vested right to a retirement benefit, they have several options for how to receive that benefit. One such option, particularly relevant for individuals who may return to public service in a different capacity or for a different employer, is the option to defer receipt of their retirement benefit. This deferral is permitted under IPERA, allowing the member to postpone the commencement of their pension payments until a later date, typically age 65 or their normal retirement age, without penalty or loss of accrued benefits, provided certain conditions are met. The Act specifies that a vested member can elect to defer their retirement benefit, and during the deferral period, the benefit accrues interest at a rate determined by the Public Employee Retirement System of Idaho (PERSI) Board. This ensures that the value of the deferred benefit is maintained and grows over time. The primary condition for this deferral is that the individual must have separated from all participating employer service. This separation is a key trigger for the eligibility of retirement benefits, including the option to defer. Therefore, a member who has vested and separated from service can indeed defer their retirement benefit until a later date, with the benefit continuing to accrue interest.

The scenario involves the Idaho Public Employee Retirement System (IPERS) and the application of its rules regarding service credit for a former employee, Anya Sharma. Anya is seeking to purchase service credit for a period of temporary employment with the Idaho Department of Health and Welfare. IPERS regulations, specifically concerning the purchase of service credit, generally require that the service must have been performed as a contributing member of IPERS or a predecessor system, or be eligible for purchase under specific provisions. Temporary employment, if not accompanied by mandatory contributions to IPERS during that period, may not automatically qualify for service credit purchase without meeting certain criteria. Idaho Code Section 59-1340 outlines the conditions under which members can purchase service credit. This section specifies that purchased service credit is typically for periods of public service that were not previously recognized or credited by IPERS. The key is whether the temporary employment met the criteria for membership and contribution during the service period, or if a specific statutory provision allows for the purchase of such service. Without evidence of contributions or a specific IPERS rule allowing the purchase of temporary service where no contributions were made, Anya’s eligibility is questionable. The question hinges on the interpretation of IPERS’s rules regarding service credit for temporary, non-contributory employment. The most accurate outcome is that Anya cannot purchase this service credit because IPERS rules generally require prior contributions or specific statutory authorization for purchasing service credit, and temporary employment without contributions typically does not meet these criteria unless a specific exception applies.

The Idaho Public Employee Retirement System (IPERS) governs retirement benefits for state and local government employees in Idaho. When a participating employee leaves covered employment before meeting retirement eligibility, their contributions are typically refunded. The refund amount is generally limited to the employee’s accumulated contributions plus any accumulated employer contributions, if the plan document allows for it. However, any employer contributions that are not vested are forfeited. Idaho law, specifically Idaho Code Title 59, Chapter 13, outlines the rules for IPERS. Section 59-1351 addresses refunds. A critical aspect is that if a member takes a refund, they forfeit all credited service. To re-establish this service, they would need to return to IPERS-covered employment and, if eligible, repay the refunded amount plus interest. The scenario describes a scenario where a participant has accumulated contributions and some employer contributions, but has not yet met the minimum service or age requirements for retirement. Upon separation from service, the participant is entitled to a refund of their contributions. The question implies that the employer contributions might also be refundable. However, IPERS rules, as established by Idaho statute and administrative rules, typically stipulate that only employee contributions are fully refundable without penalty or loss of future rights, and employer contributions may be subject to vesting. If the employer contributions are not vested, they are forfeited upon separation and refund. Therefore, the most accurate description of what the departing employee receives is their own contributions plus any vested employer contributions. In the absence of specific vesting information, the safest assumption based on general public retirement system principles and Idaho law is that the employee receives their own contributions, and potentially vested employer contributions, but not necessarily all employer contributions. However, the question is framed to test the understanding of what is *generally* provided in such a situation. Public employee retirement systems in Idaho, like IPERS, are designed to provide benefits based on service and contributions. When a member leaves before retirement eligibility, the distribution options are typically a refund of contributions or, if eligible, a deferred retirement benefit. Refunds usually consist of the member’s contributions plus any vested employer contributions. The forfeiture of service is a key consequence of taking a refund. The specific amount of employer contributions that are vested depends on the IPERS plan rules, which are established by statute. For the purpose of this question, we consider the most comprehensive refund an employee might receive under IPERS upon separation before meeting retirement criteria. This includes their own contributions and any employer contributions that have vested according to the IPERS plan.

The Idaho Public Employee Retirement Act (IPERA) governs the retirement benefits for state and local government employees in Idaho. A key aspect of this act concerns the treatment of service credit purchased by members. When a member purchases service credit under IPERA, this additional service is added to their overall service record. This purchased service credit is then used in the calculation of their retirement benefit. The formula for calculating a defined benefit pension typically involves multiplying the member’s final average salary by their years of service and a multiplier specific to their retirement plan. The purchase of service credit directly increases the “years of service” component of this formula. For instance, if a member has 25 years of actual service and purchases an additional 5 years, their total credited service becomes 30 years for benefit calculation purposes. This increase in credited service, when applied to the final average salary and the applicable multiplier, results in a higher monthly retirement allowance. Therefore, the primary effect of purchasing service credit is to enhance the future retirement benefit by increasing the credited service period used in the pension calculation. This is a fundamental mechanism for members to improve their retirement security within the framework of IPERA.

The Idaho Public Employees Retirement System (IPERS) is governed by specific statutes and administrative rules that dictate how benefits are calculated and administered. When considering the impact of a participant’s re-employment with a participating employer after receiving a retirement benefit, Idaho law, specifically Title 59, Chapter 13 of the Idaho Code, outlines the procedures and potential adjustments to benefits. For IPERS members, re-employment with a participating employer generally requires a re-evaluation of their retirement status. If the re-employment is deemed to be for a period exceeding a de minimis threshold, or if the position is considered substantially similar to the position held prior to retirement, IPERS may require the retiree to either rejoin the system and contribute, or suspend their retirement benefits during the period of re-employment. The determination of whether benefits are suspended or if re-enrollment is required hinges on the nature and duration of the re-employment, as well as specific IPERS rules regarding post-retirement employment. These rules are designed to prevent individuals from drawing a retirement pension while simultaneously earning a salary from the same or a similar public employment without proper re-enrollment and contribution. The scenario presented involves a former IPERS member returning to work for a participating employer, and the question tests the understanding of how such re-employment affects their existing retirement benefits under Idaho law. The correct application of the law in such situations involves understanding the conditions under which benefit suspension or re-enrollment is mandated, ensuring compliance with the IPERS statutes and regulations. The primary principle is to ensure that retirees are not unduly benefiting from both a pension and a salary from the same system without adherence to the rules governing post-retirement employment.

The Idaho Public Employee Retirement System (IPERS) operates under specific statutes and administrative rules governing its investments and fiduciary responsibilities. When considering the investment of IPERS assets, the primary governing principle is the prudent investor rule, as codified in Idaho law. This rule requires fiduciaries to act with the care, skill, prudence, and diligence that a prudent investor of comparable experience would use in similar circumstances. This encompasses diversification of investments to avoid unreasonable risk concentrations, considering the expected return and risk of investments, and managing assets with the intention of meeting the long-term obligations of the retirement system. The Uniform Prudent Investor Act, adopted in Idaho, provides a framework for this fiduciary duty. Specifically, it emphasizes a total portfolio approach to investing, where the risk and return of individual investments are evaluated in the context of the entire portfolio. This means that while certain investments might appear speculative in isolation, they could be appropriate if they contribute to diversification and overall portfolio objectives. The statute does not mandate specific investment vehicles but rather outlines the process and standards by which investment decisions must be made. Therefore, the most appropriate consideration for IPERS in making investment decisions is adherence to the prudent investor rule and the diversification requirements that are integral to it, ensuring the long-term financial health and stability of the retirement system for its beneficiaries.

The Idaho Public Employee Retirement Act (IPERA) governs the retirement benefits for public employees in Idaho. A key aspect of IPERA is the determination of service credit, which is crucial for calculating retirement allowances. Service credit is generally earned for periods of active employment for which contributions are made to the retirement system. Idaho Code §59-1301 et seq. outlines these provisions. Specifically, IPERA allows for the purchase of certain types of service credit, such as prior military service or service with other governmental entities, under specific conditions. These conditions often involve making a payment to the system that reflects the actuarial cost of the service. For instance, purchasing service credit for periods of employment prior to becoming a member of IPERA or for periods of leave of absence may require a contribution from the member and potentially the employer, calculated based on actuarial assumptions and the member’s compensation during the period being purchased. The law is designed to ensure that the retirement system remains actuarially sound while allowing members to enhance their retirement benefits by accounting for eligible past service. The ability to purchase service credit is not automatic and is subject to strict rules regarding eligibility and the calculation of the purchase cost.

The scenario presented involves a governmental entity in Idaho, the City of Oakhaven, which has established a defined benefit pension plan for its firefighters. The plan is governed by Idaho law and is subject to federal regulations like ERISA, though governmental plans are generally exempt from ERISA’s reporting and disclosure requirements, they are still subject to fiduciary standards and funding requirements. The question centers on the proper valuation of plan assets for actuarial purposes. Actuarial valuations are critical for determining the plan’s funded status and the required employer contributions. Idaho law, mirroring federal best practices, mandates that pension plans value their assets at fair market value. Fair market value is defined as the price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts. For publicly traded securities, this is typically the closing price on the valuation date. For illiquid assets, such as real estate or private equity investments, fair value may be determined through appraisal or other valuation methodologies. The key principle is that the valuation should reflect the current market worth of the assets, not their historical cost or some other arbitrary measure. Therefore, when the City of Oakhaven’s pension plan’s actuary needs to value its investment portfolio for the annual actuarial valuation, the correct approach is to use the fair market value of each asset. This ensures that the actuarial calculations accurately reflect the plan’s financial health and its ability to meet future benefit obligations. The Idaho Public Employee Retirement Act (IPERA) and related administrative rules provide guidance on these matters for public employee retirement systems in Idaho, emphasizing prudent investment management and accurate asset valuation.

The scenario involves the Idaho Public Employee Retirement System (IPERS) and the application of its rules regarding disability retirement benefits for a member who has also accrued benefits under a private sector 401(k) plan. The core issue is whether IPERS can offset its disability retirement benefit by the amount received from the private 401(k) plan, even if the 401(k) plan was not a direct rollover or a plan established by IPERS itself. Idaho law, specifically as it pertains to IPERS, governs the coordination and offset of benefits. IPERS, like many public retirement systems, has provisions to prevent dual recovery for the same period of disability or retirement. Idaho Code Section 59-1322(5) addresses the offset of IPERS disability retirement benefits by other retirement allowances or disability benefits received from any other retirement system or plan, including those funded by public or private sources, if the benefit is based on the same period of disability or service. The key is that the offset applies if the benefit is received for the same disability. The fact that the 401(k) was not directly rolled over from a previous public employment or established by IPERS does not exempt it from the offset provision if it provides a benefit for the same period of disability that IPERS is compensating. Therefore, IPERS is permitted to offset its disability retirement benefit by the amount received from the private 401(k) plan, provided the 401(k) benefit is indeed attributable to the same period of disability. The question tests the understanding of the broad scope of offset provisions in public retirement systems like IPERS, which aim to ensure that a member does not receive a windfall by being compensated twice for the same period of incapacity or service.

The Idaho Public Employee Retirement Act (IPERA) outlines specific rules regarding the purchase of service credit. When an employee of a participating employer in Idaho wishes to purchase service credit for periods of employment with another governmental entity outside of Idaho, specific conditions must be met. The core principle is that such service must be “qualifying governmental service.” This means the service must have been rendered for a state, county, municipality, or other political subdivision of any state or the District of Columbia, and it must be creditable under the retirement system of that entity. Furthermore, the employee must be an active member of IPERA and have at least five years of credited service under IPERA to be eligible to purchase this out-of-state service. The purchase price is determined by actuarial valuation to ensure the system is not adversely affected financially. The employee typically pays the actuarial cost of the service credit, which includes the employer’s and employee’s contributions plus interest. This mechanism aims to allow public servants to consolidate their retirement benefits from various public sector roles across different jurisdictions, provided the service meets the statutory definition of qualifying governmental service and the member meets the minimum service credit requirement within IPERA.

The scenario involves a public employee retirement system in Idaho that is facing funding shortfalls. The Idaho Public Employee Retirement Act (IPERA) governs such systems. When a defined benefit pension plan experiences actuarial deficits, the plan sponsor (in this case, the state or a participating political subdivision) is generally responsible for making up the difference to ensure the plan remains solvent and can meet its future obligations. This responsibility is often codified within the pension statutes. The actuarial valuation determines the present value of future benefits and the current assets available to pay those benefits. If the present value of future benefits exceeds the current assets, an actuarial deficit exists. To address this, contribution rates for both the employer and employees may need to be adjusted, or the employer may need to make direct appropriations from its general fund. The Idaho Legislature, through its appropriations process, ultimately authorizes the funding for these shortfalls, often based on recommendations from the Public Employee Retirement System of Idaho (PERSI) Board and actuarial reports. The core principle is that the employer bears the ultimate responsibility for ensuring the pension plan’s financial health, even if it requires additional legislative action and funding.

The scenario involves the Idaho Public Employee Retirement System (IPERS) and the application of its contribution rules. Specifically, it addresses the distinction between employee and employer contributions for members who are also participating in a governmental retirement plan in another state or country. Idaho Code §59-1309 governs the crediting of service and contributions. For members who have prior service in a retirement system outside of Idaho and wish to purchase that service with IPERS, the law outlines specific procedures. When a member is actively contributing to a governmental retirement plan in another jurisdiction simultaneously, IPERS requires the member to make a contribution equal to the member’s current contribution rate plus the employer’s current contribution rate for the service being purchased. This is to ensure that IPERS receives the full actuarial cost of the service credit. The employer’s contribution rate for IPERS members is set by the IPERS board and can change annually. For the purpose of this question, assume the employer contribution rate for the fiscal year in which the service is purchased is 11.38%. The member’s current contribution rate is 7.11%. Therefore, the total contribution required from the member to purchase this out-of-state service, while still employed and contributing elsewhere, is the sum of these two rates. Calculation: Member’s current contribution rate = 7.11% Employer’s current contribution rate (assumed for fiscal year) = 11.38% Total contribution rate = Member’s rate + Employer’s rate Total contribution rate = 7.11% + 11.38% = 18.49% The question asks for the percentage of the member’s current salary that must be contributed to purchase this service. Based on the calculation, this is 18.49%.

The scenario involves a potential violation of the Idaho Public Employee Retirement Act (IPERA) concerning the treatment of service credit for a former employee. Specifically, it touches upon the rules governing the purchase of service credit for periods of employment that may have been interrupted or served under different governmental entities within Idaho. Under IPERA, members generally have the option to purchase service credit for certain periods of prior service, provided specific conditions are met. These conditions often include whether the prior service was with a participating employer in IPERA or another governmental entity in Idaho, and whether the member received a refund of contributions for that service. The key principle to consider is whether the employer’s action of denying the purchase of service credit for the period of employment with a different Idaho state agency, without a clear statutory prohibition or established policy within IPERA that would disallow such a purchase, constitutes an improper denial. IPERA, like many public retirement systems, aims to allow members to consolidate their public service for retirement benefit calculations. The denial, as described, suggests a possible misinterpretation or overly restrictive application of IPERA’s service credit purchase provisions. Without a specific exclusion in IPERA for service rendered with another Idaho state agency when a refund was taken, the employee should typically be permitted to purchase this service credit, provided all other statutory requirements for purchasing service credit are met. The employer’s refusal, if not based on a valid IPERA exclusion, would be an improper action.

The Idaho Public Employee Retirement System (IPERS) is governed by Idaho Code Title 59, Chapter 13. This chapter outlines the structure, benefits, and administration of the retirement system for state and local government employees in Idaho. Specifically, concerning benefit adjustments, Idaho Code Section 59-1316 addresses cost-of-living adjustments (COLAs). This section details the methodology for calculating and applying COLAs to retirement benefits. The adjustment is typically tied to a specific inflation index, such as the Consumer Price Index (CPI), and is subject to limitations or caps as defined by the statute. The statute mandates that the IPERS Board of Trustees approve these adjustments annually, based on the prescribed formula and available funds. The primary objective of these COLAs is to help maintain the purchasing power of retirement benefits in the face of rising living costs. The statute specifies the particular index to be used and any caps on the annual percentage increase. For instance, the adjustment is generally calculated as a percentage of the prior year’s Consumer Price Index for All Urban Consumers (CPI-U) for the Western Region, as published by the U.S. Bureau of Labor Statistics, not to exceed a certain percentage, often around 2% or 3% depending on the year and specific IPERS rules. The calculation is applied to the current retirement allowance.

The scenario describes a situation where a public employee in Idaho, who is a member of the Public Employee Retirement System of Idaho (PERSI), has accrued service credit from a prior period of employment with a private sector entity that is not a participating employer in PERSI. Idaho Code §59-1301 et seq., particularly provisions related to service credit and reciprocity, govern such situations. PERSI’s rules and the relevant Idaho statutes outline specific mechanisms for purchasing or transferring service credit from non-PERSI employers, often requiring a buy-back provision with actuarially determined contributions. The key is whether the prior service is eligible for recognition within the PERSI system. Generally, service with entities not participating in PERSI cannot be directly transferred without a specific reciprocal agreement or a buy-back provision that allows the member to contribute the actuarial cost of that service. Without a specific reciprocal agreement between PERSI and the private entity, or a statutory provision allowing for the purchase of such service, the employee cannot simply claim this prior service as creditable service within PERSI. The employee would need to consult PERSI directly to determine if any purchase options exist under current regulations for service rendered to non-participating employers, which typically involves a significant financial contribution to cover the unfunded liability associated with that service. The question tests the understanding that not all prior public or private service is automatically recognized by a state retirement system like PERSI without specific statutory provisions or reciprocal agreements.

The Idaho Public Employee Retirement System (IPERS) is governed by specific statutes and administrative rules that dictate its operational framework and the rights and responsibilities of its members and participating employers. When a participating employer undergoes a merger or consolidation with another entity, the treatment of existing IPERS service credit and contribution history is a critical consideration. Idaho law, particularly within Title 59 of the Idaho Code, addresses the continuity of employment and the preservation of retirement benefits for public employees. In cases of governmental reorganization, such as the merger of two special districts, the IPERS system is designed to facilitate the seamless transfer of a member’s accrued benefits. This involves ensuring that service rendered to the predecessor employer is recognized by the successor employer for IPERS purposes. The core principle is that the IPERS membership and the associated service credit are tied to the individual member and the IPERS system itself, not solely to the specific employing entity, provided the successor entity is also an IPERS participating employer. Therefore, a member’s IPERS service credit and contributions are generally preserved and continue to accrue under the new organizational structure, assuming the merger does not result in a break in IPERS-covered employment and the acquiring entity is a participating employer in IPERS. The Idaho Legislature has enacted provisions to prevent the loss of benefits due to such governmental restructuring.

The scenario involves the administration of a defined benefit pension plan in Idaho. The question probes the fiduciary responsibilities concerning the valuation of plan assets and liabilities. Under the Employee Retirement Income Security Act of 1974 (ERISA), as applied to multiemployer plans often operating across state lines but with specific state laws like Idaho’s also being relevant for public employee plans or those with significant Idaho-based operations, fiduciaries have a duty to act prudently. This includes ensuring that plan assets are valued appropriately. For defined benefit plans, the actuarial valuation of liabilities is a critical component of this prudent valuation process. Idaho law, like federal law, requires that pension plans be administered in a manner that is solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses. This necessitates an accurate understanding of the plan’s financial status, which is heavily dependent on the actuarial present value of all benefits, both vested and non-vested, expected to be paid under the plan. This actuarial valuation must consider all relevant factors, including mortality, disability, retirement age, and salary projections, to arrive at a fair and accurate estimate of the plan’s future obligations. The determination of the “present value of all benefits expected to be paid” is the core of this actuarial liability assessment, forming the basis for funding requirements and solvency assessments.

The scenario describes a public employee retirement system in Idaho that has experienced significant investment losses due to market downturns. The Idaho Public Employee Retirement System (IPERS) is governed by specific Idaho statutes and administrative rules. When a defined benefit pension plan, like the one described, faces a funding shortfall, the primary mechanism for addressing this is through increased employer contributions. The Idaho Legislature, as the ultimate authority for state employee benefits, has the power to appropriate funds or mandate contribution adjustments. However, direct benefit reductions for current retirees are typically subject to constitutional protections against impairment of contract, making them a less viable or more legally complex option. While employee contributions can be adjusted, the primary responsibility for ensuring the solvency of a defined benefit plan often falls on the employer, especially in response to actuarial deficits. The Public Employee Retirement Investment Board (PERIB) oversees investments but does not have the authority to unilaterally change contribution rates or benefit levels; these require legislative or administrative action. Therefore, the most direct and legally sound method for the state to address the funding gap is to increase employer contributions, which would likely be mandated through legislative action or administrative rule changes overseen by the state.

The Idaho Public Employees Retirement System (IPERS) governs retirement benefits for many public employees in Idaho. When a member of IPERS separates from service, they may have several options regarding their accumulated contributions and service credit. One critical aspect is the ability to withdraw contributions. Idaho Code §59-1331 outlines the conditions under which a member can receive a refund of their contributions. This section specifies that a member who leaves IPERS-covered employment before becoming eligible for retirement benefits may elect to receive a refund of their accumulated member contributions, plus any applicable interest. However, this refund typically results in the forfeiture of all credited service earned under IPERS. This means that if the member later returns to IPERS-covered employment, they would not be able to “buy back” the forfeited service credit without making a significant additional payment, often calculated based on actuarial assumptions, to restore the lost benefits. The forfeiture of service credit is a key consequence of taking a refund and is a critical consideration for long-term retirement planning. Understanding this forfeiture is essential for making informed decisions about separating from service before meeting retirement eligibility.

The Idaho Public Employee Retirement Act (IPERA) governs the retirement benefits for state and local government employees in Idaho. Under IPERA, a “vested” member is one who has accumulated a specified period of service credit, entitling them to a retirement benefit even if they leave employment before reaching retirement age. The calculation of service credit for IPERA purposes is detailed in Idaho Code Section 59-1322. This section outlines how different types of service, such as prior service, military service, and service with other public employers, are credited. For IPERA to recognize service credit earned in another state’s public retirement system, there must be a reciprocal agreement in place between IPERA and that other system. These agreements are established to allow employees who move between public employment in different jurisdictions to retain the value of their prior service. Without such a reciprocal agreement, service rendered in another state’s public retirement system, even if similar in nature, generally cannot be directly transferred or credited by IPERA. Therefore, the crucial factor for an Idaho public employee to have their prior service from a different state’s public pension system recognized by IPERA is the existence of a formal reciprocal agreement between the two retirement systems. This ensures fairness and portability of benefits for public sector employees who have served in multiple jurisdictions.

The Idaho Public Employee Retirement System (IPERS) governs retirement benefits for many Idaho public employees. While IPERS itself is a defined benefit plan, the question concerns the treatment of contributions made by a participant to a separate, optional, tax-deferred annuity program that is not part of the core IPERS defined benefit. Such programs are often structured as 403(b) or 457(b) plans, depending on the employer type. Contributions to these plans, when made on a pre-tax basis, reduce the participant’s current taxable income. The earnings within these accounts grow tax-deferred. Upon withdrawal in retirement, both the contributions and earnings are taxed as ordinary income. This is a fundamental principle of tax-deferred retirement savings plans. The question specifically asks about the tax treatment of contributions and earnings from an optional annuity program, not the IPERS defined benefit itself. Therefore, the correct answer must reflect the taxation of both contributions and earnings as ordinary income upon distribution. The calculation is conceptual: Taxable Income = Contributions + Earnings. This illustrates that the entire distribution is subject to ordinary income tax rates at the time of withdrawal.

The scenario involves a county employee in Idaho who participated in a defined benefit pension plan. Upon separation from service before becoming eligible for retirement benefits, the employee is entitled to a refund of their contributions, including any accumulated interest. Idaho Code Section 59-1322(1) governs the refund of contributions for members of the Public Employee Retirement System of Idaho (PERSI) who separate from service. This section specifies that a member who has not yet met the age and service requirements for a retirement benefit is entitled to a refund of their contributions plus accumulated interest. The interest rate for such refunds is determined by the PERSI board and is typically compounded annually. For the purpose of this question, we assume the PERSI board has set the annual interest rate at 4%. The employee contributed \$15,000 over their service period. To calculate the total refund, we need to apply the accumulated interest to the contributions. While a precise calculation would involve the timing of each contribution and the specific compounding periods, for the purpose of testing the understanding of the entitlement and the general principle of interest accrual, we can illustrate with a simplified compounding model. If we consider the \$15,000 as a lump sum for illustrative purposes and assume a simple annual compounding for a hypothetical period of 5 years, the calculation would be: Refund = Contributions * (1 + Interest Rate)^Number of Years. Thus, Refund = \$15,000 * (1 + 0.04)^5 = \$15,000 * (1.04)^5 ≈ \$15,000 * 1.21665 ≈ \$18,249.75. This illustrates the principle that the refund includes both the principal contributions and the earned interest, as mandated by Idaho law for separated members not yet vested for retirement. The key concept is the right to recover one’s own contributions with a reasonable return on those contributions, reflecting the time value of money and the growth potential of pension fund assets.

The Idaho Public Employee Retirement Act (IPERA) governs the retirement systems for public employees in Idaho. A key aspect of these systems is the calculation of retirement benefits, which often involves actuarial assumptions. When a member terminates employment before meeting the age and service requirements for retirement but has vested rights, their benefit is typically calculated based on the service credited up to the date of termination and the member’s salary history. The benefit is then deferred until the member reaches the earliest age at which they could have retired had they continued employment. For a member with 15 years of credited service and an average final compensation of $65,000, who terminates before age 62, the deferred retirement benefit calculation under IPERA would consider these factors. The multiplier for a general member’s benefit is typically 2% per year of service. Therefore, the projected annual benefit upon reaching eligibility would be based on the accumulated service and the average final compensation at the time of termination. The question asks about the calculation of a deferred retirement benefit for a member who has vested but has not yet met the age and service requirements. This requires understanding how IPERA treats vested but not-yet-retired members. The benefit is calculated using the member’s credited service and average final compensation at termination, with the benefit payable when the member reaches the earliest age at which they would have been eligible for retirement had they remained in service. The specific calculation involves applying the applicable multiplier to the credited service and average final compensation. For a general member, the multiplier is 2%. So, with 15 years of service and an average final compensation of $65,000, the annual deferred benefit, payable at retirement age, would be 15 years * 2% * $65,000. This equals 0.30 * $65,000 = $19,500.

The Idaho Public Employee Retirement System (IPERS) governs retirement benefits for public employees in Idaho. Under Idaho Code §59-1301 et seq., IPERS is a defined benefit plan. A critical aspect of defined benefit plans is the calculation of pension benefits, which typically involves a formula based on factors such as years of service, age at retirement, and a final average salary. For IPERS, the benefit is calculated using a multiplier applied to the member’s service credit and their average monthly compensation over a specified period. While specific percentages and periods can change with legislative updates, the fundamental principle is that the benefit accrues over time and is paid out as a lifetime annuity. The concept of “vesting” is also crucial; it determines when a member has a non-forfeitable right to their accrued benefits. For IPERS, vesting generally occurs after a certain number of years of credited service. The plan is funded through contributions from both employees and the employer, and the investment earnings on these contributions are used to pay benefits. Understanding the statutory framework, including contribution rates, benefit formulas, and vesting schedules, is essential for administering and participating in the IPERS system. The question tests the understanding of how IPERS benefits are structured and the legal basis for their administration within Idaho.

The scenario involves a governmental retirement plan in Idaho, specifically addressing the treatment of a participant’s accrued benefit upon separation from service before reaching normal retirement age. Idaho Code Section 59-1301 et seq., which governs the Public Employee Retirement System of Idaho (PERSI), outlines the rights and benefits of its members. When a member separates from service before meeting the criteria for retirement benefits, their vested accrued benefit remains with the system. This benefit is calculated based on the member’s service credit and average final salary, as defined by the Idaho statutes. The member has the option to leave their contributions and accrued benefit in the system to receive a retirement benefit at a later date, or in some cases, to withdraw their contributions. However, the question specifies that the member did not elect to withdraw their contributions. Therefore, their vested accrued benefit continues to be held by PERSI, subject to the plan’s provisions for deferred retirement. The core principle here is that a vested benefit does not disappear upon separation; it simply becomes a deferred benefit payable at a future date when eligibility criteria are met. The calculation of the exact future benefit would involve applying the plan’s benefit formula to the member’s service credit and average final salary at the time of separation, projected to the date of future retirement, but the question asks about the status of the benefit itself, not its specific future value.

The Idaho Public Employee Retirement System (IPERS) is governed by Idaho Code Title 59, Chapter 13. This chapter outlines the structure, administration, and benefits of the retirement system for public employees in Idaho. Specifically, Section 59-1309 addresses the crediting of service for members. This section details how various types of service, including prior service, military service, and service purchased from other governmental retirement systems, are recognized for retirement eligibility and benefit calculations. The question probes the specific conditions under which IPERS will recognize service rendered by a member for a political subdivision of Idaho that is not participating in IPERS, but where the member subsequently becomes an IPERS participant. Idaho Code § 59-1309(3) allows for the purchase of service from other governmental retirement systems, provided certain conditions are met. The key condition for a non-participating political subdivision of Idaho is that the member must have been employed by that subdivision prior to becoming a member of IPERS and must have purchased that service in accordance with the provisions of the IPERS law. This purchase typically involves paying the actuarial cost of the service. The scenario presented involves a librarian who worked for a county library in Idaho, a political subdivision, which did not participate in IPERS at the time of her employment. She later became an IPERS member through her employment with the state. For this prior service to be creditable with IPERS, she must have made a purchase of that service, which would involve paying the actuarial cost associated with that period of employment. This purchase mechanism is the established method for incorporating service from non-participating entities within Idaho into an IPERS account.