Pension bill moves step closer to 2013 Legislature

An interim committee of lawmakers has moved a plan to fix the state’s pension systems one step closer to the 2013 Legislature. The proposed bill start with the pension fix proposed by the Schweitzer Administration.

The State Administration and Veteran Affairs  (SAVA) Committee has voted to approve bills to potentially fix debt problems plaguing the state’s two biggest employee retirement systems.

The Public Employee Retirement System and Teachers Retirement System are expected to be about $3 billion in the hole over the next 3 decades.Wilsall Republican Senator Ron Arthun.

“We need to address this because we’re getting so much farther behind on our unfunded liabilities,” said Wilsall Republican Senator Ron Arthun.

Arthun joined a seven to one majority passing a bill for the Teachers Retirement System. The bill has both the employees and employers paying more into the system to correct the shortfall over the long term. Then coal tax revenue would fill in the rest.

A fix for the Public Employee Retirement System generated a little more debate in the SAVA committee. A bill for that system passed 5 to 3.

This fix has much of the same framework as the teachers plan; an infusion from natural resource taxes and more from the employees. The controversy here comes in asking for more from the employers, which are many times city and county governments. Some public comment at the meeting accused the committee of trying to balance the budgets of the pensions on the backs of local governments, leading to forced tax hikes.

Senator Arthun says it has to be a shared sacrifice.

“I think some of the burden has to be shared by the local governments,” Arthun said.

Executive Director of the Montana League of Cities and towns Alec Hansen says local governments are willing to make a reasonable contribution to solve this problem.

“It’s vitally important to restore actuarial balance to those programs. It’s also vitally important to protect the retirement benefits of our employees,” Hansen said.

The bills passed by the SAVA committee now move over to the Legislative Finance Committee for another review. SAVA will view them again in November before making a decision on whether or not to send the measures to the 2013 Legislature.


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