Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pensions topic
No spam. Unsubscribe anytime.
Committee hears support for $300M pension reserve, debate over contribution schedule
Summary
Senate Bill 287 would create a pension state special revenue account seeded with $300 million, change interest distribution rules, and provide incremental employer contribution increases; proponents said it reduces unfunded liabilities while some stakeholders prefer a slower contribution schedule.
Senate Bill 287 (sponsor: Sen. Wendy McKamey) would create a pension state special revenue account to support the Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS). The bill proposes a one‑time $300 million general fund transfer into a pension reserve account, a cap of $150 million on the debt-and-liability-free fund (with excess flowing to the pension reserve), and a revision to treasurer’s fund investment earnings distribution (50/50 split between general fund and the debt-and-liability-free account).
The bill also includes a mechanism to provide incremental employer contribution increases to PERS and TRS: base language proposed 0.2% per year for 10 years (total 2%), and proponents and committee members discussed an amendment to instead adopt 0.1% for 20 years (also totaling 2%). Proponents argued the reserve provides a "trap door" funding mechanism to shore up pensions during poor market returns without turning to taxpayers.
Ryan Evans (assistant budget director) and Dan Villa (Board of Investments executive director) described the mechanics and argued the plan would allow the state to use investment earnings to reduce liabilities and purchase low-yield coal‑trust loans into the debt-and-liability-free account. Sean Graham (TRS) and William Hollahan (PERS) said the additional contributions would materially reduce amortization periods for the systems (examples given: TRS amortization dropping from 21 to 19 years under a 0.2 schedule; PERS projections also improved under initial modeling).
Stakeholders including the Montana League of Cities and Towns and county and labor groups generally supported the bill but some organizations asked the committee to prefer the 0.1/20‑year approach as less compressive on local budgets. Informational witnesses from DNRC and the governor’s budget office were present to answer fiscal questions.
The hearing closed after questioning; sponsor urged concurrence and said the bill provides durable tools to protect retirement funding without recurring tax increases.
