Compliance March 28, 2007

Montana House Panel Axes DC Plan for State Employees

March 28, 2007 (PLANSPONSOR.com) - A House panel in Montana rejected a proposal to create a 401(k)-like plan for new government employees and teachers, in which the state would have matched the payments with 1% of new employees' salary and increased that match to as much as 8% over the worker's length of employment, the Billings Gazette reported.
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The 48-page bill – HB827 – was defeated 15-3 by the House State Administration Committee, but the Gazette reported that committee members have not closed the door on the proposal altogether and will consider it further over the next 20 months.

Committee members said that much more time is needed to study the idea. Representative Dennis Himmelberger, sponsor of HB827, said he will look into how the panel might request that a legislative interim committee study the new plan and draft a proposal for the 2009 Legislature.


Senator Joe Balyeat, R-Bozeman, who helped write HB827, says a new DC scheme could help pull the current DB plans out of trouble. The DB plans would be unchanged by HB827.

The DB plans are facing about $540 million in long-term deficits, according to the newspaper.

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