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TRS director urges legislature to increase university supplemental contribution to cover MUSRP liability
Summary
The Teachers Retirement System told House members that to pay off the liability tied to university-system employees moved to a defined-contribution plan, the supplemental contribution would need to rise from 4.72% to 14.21% of payroll or the state would need to make a roughly $214 million lump-sum payment; the change is proposed in House Bill 51.
The House State Administration Committee heard details about House Bill 51 and the university-system supplemental contribution during a presentation by Sean Graham, executive director of the Montana Teachers Retirement System (TRS). Graham said the rate currently paid by the university system for the Montana University System Retirement Plan (MUSRP) is 4.72% of covered payroll and that the TRS board's valuation shows the contribution would need to increase to 14.21% to amortize the associated unfunded liability by the statutory deadline of July 1, 2033.
"In order to actually pay that off by that deadline of July 1, 2033, that rate would have to increase from 4.72% of compensation to 14.21% of compensation," Graham told the committee. He added a one-time alternative: "Alternatively, they could pay a lump sum of 214,000,000 and then continue to pay the 4.72%."
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