Helping Idaho Public Employees Build A Secure Retirement

Base Plan Frequently Asked Questions (FAQs)

What is my Base Plan account balance?

Your account balance can be found by using PERSI Account Balances and Projections.

Can I borrow from my Base Plan?

NO. Because the Base Plan is a 401(a) qualified plan it can't be borrowed against for any reason. But, if you have a PERSI Choice 401(k) Plan, you may be eligible to take a loan or hardship withdrawal from that.

Can I contribute more each month to my Base Plan?

NO. Because PERSI's Base Plan is a 401(a), the rate of contribution is a set amount for everyone. You can, however, voluntarily contribute to the PERSI Choice 401(k) Plan.

Can I continue adding to my Base Plan account after I terminate?

NO. You must be an active employee working for a PERSI employer and working 20 hours or more per week for at least 5 months to contribute.

What does it mean to be "vested"?

Vesting establishes your right to a guaranteed lifetime monthly Base Plan retirement benefit.

How long does it take to become "vested"?

Generally, you are vested when you acquire 60 months of service.

Do I have to be a member of PERSI?

If you work for an employer who belongs to PERSI, you are required to participate as long as you work 20 hours or more per week for at least 5 months.

Will my PERSI benefit affect my Social Security benefit?

Generally, PERSI-eligible employment is covered by Social Security, therefore your PERSI benefit will likely not reduce your Social Security. Learn more about the Social Security Windfall Elimination Provision.

What are my Base Plan Retirement Options?

At retirement you will have several different payment options on how to receive your pension benefit. You may choose to have your benefit paid for your lifetime only, or you may choose to have payments to continue to another person after your death by choosing a Contingent Annuitant. Your retirement options are not easily explained in a few words, so we suggest you read Retirement Options.

How does the Social Security Retirement Option work?

This option is only available to members who retire before Social Security Full Retirement Age (SSFRA). It provides an increased benefit before Social Security Full Retirement Age (SSFRA) and a REDUCED benefit after Social Security Full Retirement Age (SSFRA). For more information and an illustration of the Social Security Option, see Retirement Options.

Can I work after retirement and still receive my PERSI pension?

Several factors determine whether a retiree can return to work and still receive their PERSI pension benefits. PERSI offers a brochure that provides more detail. See Working After Retirement.

If I had my contributions to invest on my own I could make a lot more money. Why do I have to contribute to PERSI?

PERSI has two plans--the mandatory Base Plan and the voluntary Choice Plan. The Base Plan is a Defined Benefit plan where membership is mandatory for eligible employees of employers belonging to PERSI. The reason for this is that PERSI is intended to be a method for public employees to ensure their own retirement security.

You might very well be able to make more money if you could invest your contributions on your own; however, countless studies show that most Americans have not and are not investing or saving for their retirements as they should. And all too often, those who do invest on their own do so very conservatively, earning only about half of what is needed for retirement. PERSI's portfolio is handled by professional investment experts worldwide to ensure that PERSI will be able to provide you with a secure, long-term retirement income.

When you retire, the Base Plan will pay you every month for as long as you live. If you choose a Contingent Annuitant, after you die he/she will continue receiving a benefit for the rest of his/ her life. Additionally, if you choose to receive the benefit for your lifetime only and at the time of your death you have not received all the contributions (plus interest) that you made during your employment, the balance will be paid to your beneficiary.

You "make back" every dollar you put into the PERSI Base plan within about your first 3 1/2 years of retirement. Say you put $60,000 into PERSI's Base Plan during your career. If your monthly benefit is $1,500, you will receive your $60,000 back in just over three years. But, we will continue paying you that $1,500 (plus yearly Cost of Living Adjustments) every month for the rest of your life. If you are retired for another 30 years, you will receive another $540,000 from PERSI (plus COLAs).

The Choice Plan is a 401(k) plan. You may make contributions to the voluntary Choice Plan. You can decide how much to contribute and have several investment options from which to select. When you retire, you may use your Choice Plan funds to supplement your Base payments. You may withdraw your Choice Plan funds in a lump sum or as a stream of payments.

PERSI's Base plan is a guaranteed, secure portion of your retirement income. With the PERSI Choice 401(k) Plan, you can invest and save on your own.

PERSI's Base Plan and Social Security were never meant to provide you with your entire retirement income. They are just two legs of the retirement "footstool." A PERSI retiree with 30 years of service who also receives Social Security may expect the two to provide a replacement income of between 83 - 96%. For the average PERSI retiree however, PERSI and Social Security together provide only about 50 - 60% replacement income. Your investments must make up the rest.

Therefore, we encourage you to participate in the Choice 401(k) Plan. If your employer also offers a 403(b) or 457 Deferred Compensation plan, you may want to participate in those as well, but you must be aware of the IRS limits applicable to those plans.

I'm only going to be at this employer for a couple of years, not retire from here, so why do I have to pay retirement contributions?

PERSI is intended to provide pension benefits to career public employees. The longer you work for PERSI employers, the greater your retirement benefit will be. And although you may not plan on being a public employee your whole career, if you belong to PERSI as little as five years you can receive a lifetime benefit at retirement. And that five years need not be all at once or with one employer. More than 750 different employers across the state belong to PERSI. You may find yourself working for a city, then the state and then maybe a highway district at different points in your career.

Frequently we hear about people who didn't think they would be at their place of work for more than a few years, but who end up staying a long, long time. The average length of service for PERSI members is about 10 years, and this increases every year. The average length of service for a PERSI retiree now is 18 years.

Another thing to consider is that, in addition to retirement benefits, your contributions are also providing you with disability "coverage." If after five years with PERSI you become totally disabled and are not able to work, you may receive a lifetime disability benefit. About 65% of PERSI members end up receiving lifetime retirement or disability benefits from PERSI.

Should your PERSI-covered employment end up being less than five years total, your contributions are still yours. You may withdraw that money, plus interest (although tax penalties and withholding apply), or you may roll over your money and interest to an IRA or another qualified plan and still use it for retirement.

I have a hard time understanding how I benefit from PERSI. Can you explain it to me?

If you're a long way from retirement, it can be difficult to picture the benefits of belonging to PERSI. Americans are very accustomed to immediate gratification and are uncomfortable with the idea of waiting 20 to 30 years for results.

Experience with tens of thousands of members has shown us that as you get closer to retirement, you will start to look forward to the PERSI benefits you will be receiving, and once you're retired you'll love PERSI. We continually hear from retirees how happy they are to receive their PERSI payments each month. Many retirees say they don't know how they'd get by without it.

 

But if you are many years from retirement, perhaps these points will help you understand PERSI more:

  • Once earned, PERSI Base benefits are guaranteed.
  • When you retire, PERSI will pay you every month for as long as you live, and if you choose a Contingent Annuitant, after you die that person will continue receiving a benefit for the rest of his or her life.
  • Your PERSI contributions are tax-deferred. You do not pay taxes on them until you retire, when you should be in a lower tax bracket. Also, this makes your current taxable income lower. If you were to receive your contributions and wanted to invest them on your own, you would be taxed on them first.
  • Payroll deduction is often considered the most "painless" way of saving for retirement. Financial planners will tell you to "pay yourself first," which is basically what PERSI does. Your contributions are taken out before you're taxed.
  • Should you leave PERSI, your contributions and interest are yours. You may roll your money to another plan or IRA or withdraw the funds.
  • Your PERSI contributions are invested by highly-qualified professionals to ensure that you will receive a secure pension for the rest of your life.
  • PERSI is not funded or managed like Social Security. PERSI is designed as a pre-funded plan to pay every future benefit that has been earned to date. PERSI is not a "pay as you go" system. It is designed so that the future value of benefits are funded as benefits are earned today. Future generations will not have the burden of paying for benefits earned today.
  • Your PERSI contributions are secure and protected by federal and state law. PERSI funds may only be used for the benefit of PERSI members.
  • With PERSI's Gain Sharing, which has happened only once since PERSI's inception, you may share in PERSI's investment earnings by receiving a payment into your personal Choice 401(k) Plan account.
  • With PERSI's Choice 401(k) Plan, you contribute on your own to save for retirement. You may choose how much to invest and where to invest your Choice funds.

What are PERSI's current and historical contribution rates?

See all the rates on our Historical Numbers page.

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