Benefits May 8, 2013
Mont. Governor Signs Pension Reform
May 8, 2013 (PLANSPONSOR.com) – Montana Governor Steve Bullock signed two bills into law to fix the state’s underfunded pension systems.
Reported by PLANSPONSOR staff
The two bills aim to put the Montana Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) back on track financially, the Missoulian reports. The state’s eight pension funds face a combined potential shortfall of $4.3 billion, largely because the pension funds’ investment lost one-fourth of their value during the 2008 recession, according to the newspaper.
Both bills require employees and employers to pay more into the retirement funds and cut cost-of-living increases for current and future retirees. In addition, the state is pumping nearly $55 million into TRS and nearly $73 million into PERS over the next two years, with much of the money coming from natural resource revenues and interest.
Retired public employees have said they will file a lawsuit against the reduction in their cost-of-living increase, contending it breaks the state’s contract with them, the news report said.