The Helena Independent Record reports that all 50 Democrats and one Republican Representative passed the bill sponsored on behalf of Governor Brian Schweitzer, who recommended using the state’s surplus to help the systems. Actuarial reports in October revealed the Montana Public Employees’ Retirement System and Teachers’ Retirement System faced a potential $1.46 billion deficit (See Montana Pension Funds Show $1.4B Funding Shortfall).
In a Legislative Audit Committee Hearing prior to the vote, lawmakers were warned that the state could face a lawsuit if the deficit problem was not addressed soon (See MT Could Face Lawsuit Over Public Pension Systems). Prior to actually voting, 25 House members disclosed personal conflicts due to drawing a pension from one of the plans, according to the Independent Record. The representatives are still allowed to vote, though, in spite of the personal conflicts.
Some Representatives had complained that the bill does nothing else other than appropriate the excess money to help the systems’ problems, but one Democrat said it was better than doing nothing.
An interim legislative committee already has prepared a bill for 2007 that would raise the amount that state and local governments and school districts contribute toward their employees’ pension funds. Other legislators are looking at issuing bonds to speed the payoff of the potential deficit and putting in some restrictions.
Some are recommending the public employees and teachers be switched from a defined benefit (DB) plan to a defined contribution (DC) plan type, butthe MEA-MFT, the union representing school and government employees, said it would strongly oppose a switch.