Governor releases proposal to fix state pension plans

Governor Brian Schweitzer has released a plan he says will fix the state’s ailing pension system. The retirement plans for the state’s teachers and many other public employees have been running in the red for about a decade now. Schweitzer’s proposal includes increasing contributions from both state employees and the agencies that employ them. Lawmakers on both sides of the issue agree something needs to be done soon.

The state retirement plans are not solvent right now. That is to say Montana does not have the money set aside to pay them, and it’s on a downward slide.

Speaking to reporters, Governor Brian Schweitzer says that’s actually unconstitutional.

“You know, there’s some folks who say well, dog-gone it if we don’t have the money I guess we won’t pay them. But it doesn’t work that way. We have a constitutional requirement,” Schweitzer said.

The retirement plans split into two groups. There’s the Teacher’s Retirement System and the Public Employee Retirement system. For the Teacher’s Plan, the Governor is proposing a one percent increase in how much the employees contribute. Then, he is asking school districts to contribute a combined one time only amount of about $15 million dollars.

With the Public Employee System there would be a one percent increase to both the employees and the employing agencies, like local governments. The third component would be putting in more money from state trust lands.

Erik Feaver is President of the MEA-MFT, the state’s largest public employee union. He says he supports the plan, that his members realize something needs to be done.

“The fact is this is not unique to the Governor, we’ve been talking about this plan for some time, maybe not in every little detail…he is in part saying the sorts of things we would want him to say if we were actually lobbying him,” he said.

The Governor says his plan would make the retirement plans by about 2017.

Republican Senator Dave Lewis sits on the State Administration and Veteran’s Affairs Interim Committee, the committee that looks at the pensions. He says the plan may not go far enough.

“I’m willing to support looking into some one-time-only money simply to take care of the existing fund, but we’ve got to stop the growth of the problem and the only way to do that is to put new employees into a different kind of plan,” Lewis said. He proposes 401K plans for new employees.

The Governor’s proposal would need to go before the 2013 legislature, after Schweitzer has left office.

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