The Joint-Select Committee on Pensions has had a tough job the last few months– wading through the complex budget shortfall facing the state’s largest retirement systems. Over the next 30 years, those funds will end up more than $4 billion in debt if nothing is done.
When the committee first started meeting, it was mentioned that the committee would try to put forth one, encompassing bill to fix the pensions, combining what they liked from the 18 different bills presented to them. But as discussions moved forward, it became clear the group of eight Republicans and four Democrats were considering two main, and opposing, ideas.
- Governor Steve Bullock’s proposal: This plan, modified from a plan put forth by former Governor Brian Schweitzer, would keep the current ‘defined benefit’ retirement systems in place for future employees. It would attempt to fix the plans by requiring employees put more of their money into the retirement systems, requiring employers put in more money, and then pulling some money in from state trust lands. The Governor’s plan is being carried by Representative Bill McChesney (D-Miles City). It’s HB454
- A ‘Defined Contribution’ model: This moves all future employees to ‘defined contribution’ plans, which are similar to 401(k) retirement plans used widely in the private sector. The idea has largely been spearheaded by Committee Chair Senator Dave Lewis (R-Helena) who says the current model is unsustainable in the long-term. Lewis’s ideas were modified into HB338 carried by Representative Keith Regier (R-Kalispell). This proposal would pay for current pension funds from other sources.
Ultimately, the joint-select committee decided to pass both ideas on to the House Appropriations Committee. Chair Lewis says he has received criticism for not settling on one bill, but he says the two main ideas are in too stark opposition to combine.
“You can’t meld those,” he said. “These are policy choices the Legislature’s going to have to make.”