Retirement Members Want Benefits Maintained 

                Through a policy resolution, MPEA members at the Billings Annual Meeting this month have instructed staff of MPEA to initiate legislation to increase the funding necessary to pay off the unfunded liability of the public employees, sheriffs and game warden and police officers retirement systems.

                Members also wanted  MPEA to protect the right of current and future employees to have access to a defined benefit retirement plan with the current benefit provisions. And, made it clear that MPEA is to be prepared to provide the financial support to enforce the policy resolution through the court system if that becomes necessary.

                The resolution adopted at the Annual Meeting noted that:

1.        The Montana Public Employees Association was created to develop a retirement system for public employees;

2.        Today’s public employee retirement systems guarantee a defined benefit, provide for an annual cost-of-living adjustment and have a constitutional protection of their fiscal health;

3.        Revenue growth from investments by the State Board of Investments fell precipitously, creating an unfunded liability in several PERD systems;

4.        Losses must be addressed to meet constitutional obligations;

5.        Legislation is already being drafted to impose another retirement structure on new employees;

6.        It is necessary to return the retirement system to fiscal health;

7.        Legislation was introduced and killed in the 59^th regular session to increase employer contributions to correct the unfunded liability of the affected systems.

Earlier, both Larry Jent, Bozeman, and MPEA’s recently retired executive director, Tom Schneider, discussed the state’s retirement systems.

                Rep. Jent, who is now running for Senate District 32, noted that the bills which passed through the House to increase employer contributions to correct the problems were killed by the Governor’s office. “They saw taxes being increased at the local level and wanted more time to examine the situation.”

                There will be a number of bills introduced into the next session to change the system from a defined benefit to a defined contribution (DC) system. DC systems place all risk on the employee.

                Rep. Jent said he didn’t see changing from the defined benefit to a defined contribution system as the answer and said he would oppose any move to make such a change. “The incentive should be to get the best possible people into government.”

                 He also said he believed the “real solution, for the long term, is a well-managed system.”

                Schneider discussed many of the specifics of PERD systems and pointed out that even after losses PERS has assets of over $4 billion. He explained that from 2000 to 2003 the Board of Investments lost $1.4 billion. “Everyone talks about GABA (guaranteed annual benefit adjustment) as the problem. Not so, it was the Board of Investments.”

                Schneider said he believed that the problem had to be solved in the next legislative session and that he believed the new employee was most in danger. “This organization has to care about new employees.”

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