Montana Senate Advances Pension Plan Overhaul

By Beacon Staff

HELENA – A proposed overhaul of the state’s public employee and teacher pension systems has gotten closer to approval in the Legislature after the state Senate advanced a pair of related measures Wednesday.

House Bills 377 and 454 aim to slightly reduce benefits while increasing contributions and were endorsed when some Republicans joined minority Democrats in advancing the plans in 30-20 and 30-19 initial votes.

The measures face a final vote in the Senate and another vote in the House to accept the Senate’s changes.

The bills ask both employees and employers to pay more into a system that faces a $4 billion projected shortfall in 30 years. Supporters say the bills will balance the pension systems, bringing stability to state finances and fixing a problem that has hounded lawmakers for years. Opponents, meanwhile, wanted to scrap the plan altogether for new employees.

Some of the money to overhaul the system comes from the state’s stream of natural resource revenue.

Both bills are backed by Gov. Steve Bullock.

The Senate’s Republican leadership failed in its effort to scuttle the bills. The GOP had come into the session with the hope of getting rid of the pension systems for new employees and replacing it with a defined contribution like a 401(k) retirement savings account common in the private sector.

Republican leaders argue the cost of maintaining the pensions will continue to grow.

Senate Majority Leader Art Wittich, R-Bozeman, said the measures cost the state more than $40 million a year, and he argued that some employees are likely to sue to block portions of the bills that reduce retirement benefits.

State Sen. Eric Moore, R-Miles City, also objected saying, “We are shoveling money into a hole that doesn’t have a bottom. It is not sustainable.”

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