Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Public Pensions topic
No spam. Unsubscribe anytime.
Senate committee hears bill to seed pension reserve with $300 million, boost employer contributions
Summary
Senate Bill 287 would deposit $300 million into a newly funded pension reserve, change distribution of treasurer's interest earnings, and authorize phased 0.2% employer contribution increases for teachers and public employees to reduce unfunded liabilities. Proponents said the move shortens amortization schedules; no committee vote was recorded.
Senate Bill 287, sponsored by Senator Wendy McCamey, would deposit $300 million from the general fund into a pension state special revenue account, change how treasurer's fund interest earnings are distributed, and authorize phased employer-contribution increases to both the Teachers' Retirement System (TRS) and Public Employees' Retirement System (PERS).
“First, there would be a $300,000,000 deposit from the general fund into the pension reserve fund,” said Ryan Evans, assistant budget director in the governor’s budget office, explaining the bill’s mechanics. The bill would allow the pension reserve to retain interest earnings and would use those earnings to fund a 0.2% employer-contribution increase beginning in fiscal year 2027 and repeated for 10 years, producing a cumulative 2.0% increase in employer contributions for each retirement plan if the schedule proceeds as described.
Evans and other proponents said the design also creates a “trap door” using the state’s debt-and-liability-free account to replenish the pension reserve if investment returns fall below pension boards' assumed discount rates. The bill would also alter distribution of the treasurer's cash account interest so 50% remains in the general fund and 50% funds the debt-and-liability-free account; any unencumbered balance above a $150 million cap at the end of a biennium would transfer to the pension reserve.
William Hollahan, executive director of the Public Employee Retirement Administration, said the point-2 percent increase would materially reduce amortization: passage would “lower the amortization period of our largest public pension system in Montana from 27 to 22 years overnight,” he testified. Sean Graham, executive director of the Montana Teachers Retirement System, said the same contribution schedule would reduce TRS’s amortization from 21 years to 19 years, according to the fiscal note.
Kim Popham of the Montana Federation of Public Employees said stronger retirement funding helps recruit and retain teachers and state employees.
Budget analysts from the governor’s office and counsel from the law firm that assisted on the fiscal note provided technical detail; witnesses noted a technical formatting issue in the fiscal note but said the bill’s proposed transfer timing is correct. Senator McCamey urged a due pass; the hearing closed with a record of proponents and informational witnesses but no committee action recorded in the transcript.
