The Associated Press reports that a n attorney for the Montana Public Employees Retirement Board said it is possible the state will be sued for not meeting its constitutional requirement to keep the pension funds whole. The attorney said the board has not talked about whether it will sue the state to force a cash infusion to fix the system, but other groups or individuals could also sue if the large deficit lingers.
The total deficit for the Public Employees’ Retirement System and Teachers’ Retirement System is over $1.4 billion. The Committee was also told that erasing all of the deficits would require an immediate infusion of about $722 million in tax money, according to the AP. Investment returns from that money would cover the remainder of the deficit.
Governor Brian Schweitzer has asked the legislature to approve of putting $125 million of the state’s surplus into the retirement systems (See Montana Lawmakers Face Pension Funding Bills in Special Session). State Senator Corey Stapleton said it is unlikely that Republicans will approve of Schweitzer’s request until there is a complete solution proposed for the systems’ deficits.
The Montana Board of Investments, responsible for investing pension money, told lawmakers that steps toward improvements have been taken – a new chief investment officer has been hired, a consultant has been brought on board and the investment mix has changed. In addition, there is also o ne legislative plan on the table that calls for future increases of employer contributions, a combination of local and state tax money, along with the $125 million Schweitzer is requesting.
The attorney said that such a plan would decrease the likelihood of a lawsuit.