Governor unveils pension fix plan

2012-04-11T00:25:00Z 2015-08-13T13:37:24Z Governor unveils pension fix planBy MIKE DENNISON IR State Bureau Helena Independent Record
April 11, 2012 12:25 am  • 

Gov. Brian Schweitzer Tuesday unveiled his proposal to fix Montana’s troubled pension funds for 78,000 public employees, teachers and retirees, with a mix of cash infusions and increased payments by workers and employers.

Schweitzer said his plan, if adopted by the 2013 Legislature, would erase a combined $3.4 billion in long-range “unfunded liability” in the two major public retirement systems in five to eight years.

“We will fix it without raising taxes — not one penny of new taxes,” he said at a Capitol news conference. “We adopt this plan, we’ll be the first among the states in fixing pension liability.”

Schweitzer, whose final term as governor ends in less than eight months, said he presented a plan now so he could explain it to the public and garner support among those affected by the pension fund and legislators who must adopt it.

Schweitzer’s plan would require workers covered by the Teachers Retirement System and Public Employees Retirement System to increase their contribution by a percentage point, to 8.15 percent for TRS and 7.9 percent for PERS.

School districts would contribute a lump sum of $14.7 million to TRS, while a state lands account would kick in another $25 million.

For PERS, the state and local governments would pay a lump sum of $18.1 million and also increase their payroll contribution for employees by one

percentage point.

The governor said the state can cover the payments without raising taxes, and that local governments should be able to do the same. PERS covers not only state workers, but also county and city workers.

TRS covers about 18,500 workers and pays benefits to nearly 13,000 retirees. PERS covers 28,700 workers and pays pensions to 18,000 retirees.

Eric Feaver, the leader of the state’s largest public-sector union, said Tuesday it supports the proposal, which resembles what the union has been talking about for some time.

“The governor is on the right track,” said Feaver, president of MEA-MFT, which represents teachers and some state and local government workers.

Rep. Pat Ingraham, R-Thompson Falls, who chairs the State Administration and Veterans Affairs Interim Committee, said she looks forward to hearing about the plan, because the panel has done little to develop its own proposal.

The bipartisan panel advanced a major pension-fund reform bill in 2011, but Schweitzer vetoed the bill after it was passed by the Legislature, with Democrats opposing it. The bill would have created a new, hybrid pension plan for new hires covered by TRS, tied to the amount of contributions by the employee and a matching amount from TRS.

“We only have three meetings left; we’ve not come up with anything at this point,” she said. “We’ve sort of been waiting to see what the stakeholders were going to bring forth, for us to consider.”

Sen. Dave Lewis, R-Helena, who last year sponsored a bill requiring new hires under the PERS system to have a 401(k)-style retirement plan rather than a pension, said Tuesday he plans to introduce the same bill in 2013. His bill died during the legislative process.

“We have to stop the bleeding,” he said. “We’ve got to shut off the defined-benefit (pension) plan and go to a defined-contribution plan.”

Schweitzer, however, said he’s very much opposed to a defined-

contribution plan, because it would make the pension funds even less stable and make future retirees entirely dependent on their own investment decisions and Wall Street.

Copyright 2016 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(22) Comments

  1. enu_22
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    enu_22 - April 19, 2012 12:00 pm
    There are times when politicians should stop politicking and start believing the math. Our esteemed GOP'rs didn't believe the Governor's budget figures so they slashed social program funding to ensure a "balanced budget". We have a $400M surplus now. Give the Governor's plan a chance before you gun-deck it.
  2. patriot
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    patriot - April 15, 2012 7:48 am
    A long range future liability of $3.4 billion will be fixed with no increase in taxes. One would assume all the local governments within the state have that amount projected as surplus now and in later years. Public employees have the benefit of a defined pension and benefit plan, a great perk allowing those employees security and stability. Now we can wait for the local governments to weigh in on how they will come up with the necessary funds to meet the governors edict to fund the system. Is it imperative for the roughly 92% of Montana citizens to fund this program through taxes yet to be levied? Those who have a defined contribution pension program. Is it any wonder that Feaver is in the governors corner.
  3. 5kranch
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    5kranch - April 14, 2012 3:22 pm
    Ok, If I understand the thinking of ralphy, catspaw , TanMan, enu_22 and others who gets paid by taxpayers( Public Employees) dollars, then should be right. Every Person in this nation, no matter what kind of work they do, or don’t even work at all, are all paid by taxpayers.

    All currency is made by the Federal Government. Taxpayers fund the Government. We pay for the Paper, ink, metal, electricity and so on. So all the US money is taxpayers money. There is no private sector money or jobs because it all comes from taxpayers.

    Tell Bill Gates and Warren Buffet I want all of their money back because they were not part of a Public Union job. They disguised their earnings as private sector jobs.
  4. steeline
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    steeline - April 14, 2012 9:51 am
    What about getting some oil wells going on public land? How about the coal trust fund? We need to get the dead wood out of our Capital and get some serious thinkers in. With oil developement we could have better roads, schools, and Montana jobs. duh We have to get America back and soon.
  5. Agenda
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    Agenda - April 13, 2012 8:55 pm
    The Governor's plan makes sense and I am thankful for his insight and leadership. The legislature needs to work with Governor Schweitzer to bring this plan to fruition. Quality pensions help to recruit, retain, and reward a quality workforce - in the public and the private sector. Rather than pension envy threatening the public sector pensions, let's collaborate to encourage pension security as to workers in both the public and private sector. Hard work should be rewarded.

    Public employees do work that matters as do workers in the private sector. The private sector is able to survive - even thrive - in part, because of a strong public sector. I am pleased to pay taxes for streets, services, clean water and more.

    A strong public education system provides a skilled workforce and encourage businesses to locate in Montana. An effective system of higher ed brings millions of dollars of economic development to the state. Quality public services - done efficiently - make Montana a great place to do business. Montana ranks well in education, efficiency and business climate.

    We need to celebrate our successes in getting through the great recessions in far better shape than most states. Governor Schweitzer and our public sector employees need to be congratulated and appreciated. Resolving the pension issue is a win-win.

    Let's get behind the Governor and resolve this issue. I'm sending my tax payment to the state today - pleased to live in Montana and willing to pay my fair share of taxes. I do not work in the public sector but I would be very pleased to see the employees who opt for a career in public service assured that they will have a pension that they can depend upon.

    Agenda: Keeping Montana Great!
  6. Riamh
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    Riamh - April 13, 2012 12:58 pm
    @5kranch - When a public employee gets his/her paycheck, they have taxes withheld just like private sector workers. workers in the public sector have no tax exempt status. Government employees are taxpayers just like the rest of us. Do you think, that because they earned their money serving us, that they have no claim to their own earnings?

  7. ralphy
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    ralphy - April 13, 2012 7:33 am
    the problem 5k is you think your taxes go into a pot and you get nothing out of it. I am a tax payer too and I fully understand how public employees are paid. the difference is that you believe that public employees are of a lower class who don't provide a service. So you want to marginalize them by referring to "tax payer money" as though it is different than money for gas or groceries. if your moniker is indicative of ranching as a livlihood, then you know that modern agriculture is subsidized for most operations and the government also puts a lot of money into food production to keep food prices low for many people. If you believe that the school taxes you pay cover the cost of your children attending public school, guess again. If you believe that the highway taxes and gas taxes you pay personally provide the cost of the paved road nearest you, guess again. Those nice Davis-Bacon wages paid for construction of public roads, they come from taxes. Street lights, manufactured somewhere, are paid for with taxes. the cars in the motor pool, the dump trucks the snow plows and other equipment used by the state mdt and local county road and bridge staff are made somewhere else but paid for by tax money. If you live in Helena and work at any job, a good portion of your salary, whether you work in the private or public sector, comes from tax money. The wages at the Helena Costco come mostly from tax money, spent there by government employees. So 5KRanch, get off your high horse.
  8. 5kranch
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    5kranch - April 13, 2012 12:14 am
    Catspaw and Ralphy ; I hope you read my last posting and see where I am coming from. I am not anti-union but why not let public employees make their choice on how they want to pay their dues. Not the unions confiscating the dues prior to the employees gets their checks.

    I will try to explain how public employees get paid. I pay city, county and state taxes. There are all sort of fees going to different districts that make up my tax bill. And I have to pay different fees(taxes) if I want other services from these government agencies. I don’t have a choice of not paying these taxes. They will come after me and take my personal property for payment. Money they collect from me and others including businesses go to pay public employees. That is taxpayers money.
    Now, say I work for Costco or any other non-public agency. When I pay my taxes, I don’t see Costco or any other business on my tax bill. If you don’t want to shop or spend your money where I work, that’s fine. I get paid by Costco and not any government agency.

    As to your comment on tax breaks. I agree with you, but don’t stop at 2001 go back to the 30’s. Every tax loop hole was put in place to benefit a special interest group. Why? To keep that elected politician(s) in power. They used those reasons you mentioned to sell it. That’s all.

    Hope that clears things up for you.
  9. 5kranch
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    5kranch - April 12, 2012 5:59 pm
    To: enu_22 and TanMan;
    First enu_22 , I ever say or referred to public employees as you stated, "good for nothing, lazy, overpaid public employees.” I was making the point that union dues come from taxpayers. These employees don’t had a choice to receive their pay check without their union dues already confiscated from them by the unions. Let them receive their pay checks without the dues already taken. Then they can pay dues separately and of their own free will. Also you clarified yourself by stating that public employees REGULATE and not provide. Your friendly” Pie Hole “as you called me.

    TanMan: Your statement; “Seriously, are public employees slaves? Are our wages not belong to us? Are we to work and serve the residents of Montana for free? I never said any of the above things you stated. In fact, I want your wages to belong to YOU and not be confiscated by the unions without your consent. Remember YOU don’t have that choice. You can pay your dues, Pay double the dues or give your hole paycheck to the union if you like. But it is your choice not the unions.

    Your second statement:” Which Corporation collects taxes from the public you asked? B of A, Chase, Lehman Brothers etc… What and how much tax??? $700 Billions of taxpayer’s money…” I don’t remember seeing that on any of my tax bills, City, County, State or Federal which I pay all. It was our Federal Government and the wise politicians in both parties who gave this money out and against my likings. Most of all the banks have paid the money back with interest. Remember the federal government does not play by the same rules as you and I do. Or even the cities , counties and State of Montana. We can not just print more money when we over spend or want more. Everyone has a budget and must stick to it. This is why the State of Montana is in better shape financially than 95% of the other States.

    Public pensions is the #1 problem for all Taxpayers in this State. Better work it out before it bankrupts Cities, Counties and the State. If this happens, everyone looses.

  10. catspaw
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    catspaw - April 12, 2012 4:52 pm

    Either you are very naïve about the planet you live on or purposely not willing to view reality outside a radical conservative viewpoint. Federal legislation for the past decade from 2001 to present is littered with laws and bills that give tax breaks, shelters, etc. to big corporations including oil, auto, banking, pharma, energy, etc. This was done as a deal for those corporations to provide 1. Jobs, 2. Better product 3. Cost friendly product. Instead that tax money went to pockets for lavish lifestyles. I am not sure about your feelings on class warfare, but why would anyone willingly give tax dollars to someone and expect nothing in return but negative consequences (recession and unemployment)?

    Your sentiment regarding unions is so uninformed it is hard to figure out where to begin. You suggested that public taxpayers actually pay union member dues of those employed by unionized positions, even though those dues are a deduction from the workers after tax are taken? I thought that once a person pays taxes on his or her earned income, then it is his or hers to spend for their needs/desires. Should a state employee ask you as a taxpayer if he/she can buy a Coke or Pepsi? If what you are saying is correct then just respond back and let me know where you work. I ask this as I am going to show up and buy something. After the transaction, I will suggest that since I paid for a product at your store, and I am a taxpayer who pays your wage, then I can tell you what to buy with your wages after taxes are taken. I like the color lime green, so be prepared to buy everything (or paint everything) in your world lime green. Vehicles, house, clothing, food, drinks, silverware, Kleenex, TP, even your pets and wristwatch band will be lime green. After all, taxpayers are paying your wage, and after tax income is owned by taxpayers, so under your definition my tax dollars just bought and paid for my right to tell you what to buy and how to live.

    Now that this is clarified, lets address membership. When you apply for a unionized position, the application usually states if the position is a union position. You have the option to either accept membership in a union upon hiring for the position or not applying for the position and saving yourself time and energy. It should be a very easy process and done so without “taking” anything. Conversely, if you are skilled in a private employed trade, then the same thing applies, you pay to be associated within your profession and retain your skilled credentials. Are you suggesting that if private professionals could choose to pay for their association or credentials they would not? I guess all of those fast food employees and janitors would be attorneys, doctors, and educators overnight then, right?

    And last, perhaps you should do some research on who ensures that the breathing air quality is acceptable, drinking water is not contaminated, and soils are clean and usable. Do you drink contaminated water or live on land that the soils are full of toxic waste? Perhaps you should find out what happens to home builders and contracted builders when inspectors show up and buildings are not up to code or permits are not submitted on established timelines. I will throw in Education (thanks!!)……..….perhaps if you are finding that this is not working out for you, then you should consider homeschooling (we can get lime green pencils and paper too) or let your child(ren) be uneducated, illiterate, and possibly be as naïve as you are. Would that work out better for you?
  11. ralphy
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    ralphy - April 12, 2012 4:26 pm
    5Kranch...the money everyone is paid or receives in the form of profits or dividends all comes out of the same money pot. the money everyone is paid or profits from came from a tax payer, therefore it is "tax payer money." If I buy groceries at the store, is not what I spend tax payer money? When you buy clothes at the store, is not that "tax payer money?" The difference is that many folks (apparently including you) want people who do jobs the government hires people to do, is to do them with poor wages and no benefits. The future does not bode well for any of us if we want to have public employees work as slaves. Public employees in Montana were hired with the current pension system in place. Now some public figures (not all) don't want to keep their promises or pay the bill. And your claim that because union dues paid for by government employees is tax payer money that you should not have to pay it is ludicrous. the reason that unions exist in the first place is because people who controlled the money did not want to pay fair wages or benefits and tended to mistreat employees who did not fall in line.
  12. TanMan
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    TanMan - April 12, 2012 11:42 am
    "5kranch said - what planet do you live on? What corporations are you talking about? ... taxpayers $0. The dues are paid 100% by taxpayers. How do public union employees get their pay, from taxpayers. It is that simple." Seriously, are public employees slaves? Are our wages not belong to us? Are we to work and serve the residents of Montana for free?
    Which Corporation collects taxes from the public you asked? B of A, Chase, Lehman Brothers etc… What and how much tax??? $700 Billions of taxpayer’s money…
    Montana Public employees choose to serve the people of Montana because we love our state. If we wanted to be fairly paid in accordance to our worth and education, we could easily work in another state or another private sector job higher wages. 100% of the wages paid to the public employees are collected from taxpayers this is correct. Similarly, 100% the wages paid to private sector employees are money paid to Private Corporation by whom? Taxpayers and public employees are all regular everyday people. We are all levied the same taxes. We all buy trade sell and live from the income paid by our employers.
    FYI, China has no labor union and you are free to live and work there. The only thing you don’t have in China is the freedom of speech, but you are only free to work and do business there. There are no EPA, no labor laws, no minimum wages, and their public employees are not unionized either. Since “American Jobs” are moved to China by these great corporations and private sector businessmen, you are sure to be able to find a job in China. China is hurting for experienced workers.
  13. enu_22
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    enu_22 - April 12, 2012 8:16 am
    5Kranch: Think "Public employees" the next time you renew your driver license, register your car, pay your State taxes, call for emergency services (public safety), purchase a fishing or hunting license, hunt on public lands, have a concern about air, water or soil pollution, wonder whether or not your children or grand kids are getting a good education. These are just a few of the responsibilities that your "good for nothing, lazy, overpaid public employees" regulate. please think before you open your pie hole.
  14. 5kranch
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    5kranch - April 11, 2012 10:23 pm
    Catpaw, what planet do you live on? What corporations are you talking about? You spew this hate towards anyone who has a successful business straight from the Democratic play book. President Obama would be proud of you relaying his class warfare speech.
    Now take the public union dues which you say does not cost taxpayers $0. The dues are paid 100% by taxpayers. How do public union employees get their pay, from taxpayers. It is that simple. These employees don’t have a choice, their union dues are taken from their pay check. Sounds like taxpayers pay the entire amount. Instead of forcing public employees to pay union dues out of their pay checks, let these employees pay their union dues after they receive their pay checks on their own. I bet a large percentage of them would stop paying their excessive dues and keep the money for themselves and/or family.
    And last, what public employee cleans the air , produce water, grow food and builds homes. Then throw in Education, how is that working out for our kids. Catpaw, you might want to look in the mirror first before you start blaming others.
  15. catspaw
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    catspaw - April 11, 2012 7:43 pm

    Historically speaking, when the governor has stated that there will be no tax raises, that has been the case as taxes have not increased. If you do not believe me or the history here, then feel free to provide information to the contrary.

    Also, when was the last time state employees recieved a raise in salary (regardless of tax increases)? If you knew anything you would know it will be 6 years the next time legislature comes into session (January 2013). So the rhetoric you push here is all bark and no bite.

    You both push the same GOPT stained conspiracy theory and scare tactics. You grovel on about "private tax payers" as though only a few unfortunate souls pay taxes. Everyone, who works, including public unionized employees pay taxes.

    Question for you: How much in taxpayer money does unions cost the average taxpayer? The answer is $0. That's right. Membership in unions is a cost to the EMPLOYEE and not the employer or in this case the taxpayer. Union dues are a payment deducted after taxes are taken out, which your responsibility to those taxes ends when the employee pays his/her taxes on earned income. Also, the unions you talk about aren't singlehandedly putting everyone in the poorhouse as you and MichaelS would suggest.

    I think what taxpayers are sick and tired of are hearing from radically conservative tell everyone that our tax dollars are exclusively here for the corporations and we should kowtow to them. PUBLIC EMPLOYEES PROVIDE CLEAN AIR, WATER, FOOD, ENSURE ADEQUATE HOUSING, CLEAN/CLEAR/SAFE HIGHWAYS, FORCE PROTECTION FROM CRIMINALS IN OUR COMMUNITY AND EDUCATION AND CHOICE PROGRAMS FOR OUR CHILDREN to name a few services. What would you do without these services being provided to you buy public employees on your behalf with your hard earned tax dollars (I am assuming you work)?

    Corporations continue to raise the prices on goods even when they are given tax breaks. Corporations continue to not hire more employees, but continue to recieve tax dollars and breaks under the assumption that these activities are going to happen. Corporations continue to clog our elections processes with campaign dollars (your tax dollars) to candidates who will protect their corporate interests over ours. Corporations continue to provide product that is inferior at a higher price. Corporate tax breaks reduce our tax base, which is made up by you and I the taxpayer. Corporations make millions on the services/products of their employees, then lay them off (non-unionized anyway) to pay CEO's and Board Chairpersons five to six figure bonuses. Finally, Corporations pass themselves off as "People" (I prefer the term "vermin" myself).

    I would advise both of you to please take inventory of who provides you basic living essentials as a taxpayer and who recieves tax breaks and provides you nothing.
  16. ralphy
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    ralphy - April 11, 2012 3:35 pm
    its interesting that people like MichaelS have so much anger and so much ignorance. the public employees retirement system is a constitutional program, not one that has been negotiated by union contract. Now the governor is planning on having state employees pay another 1% into the plan. a year ago, the state with millions in surplus was too broke to pay a 1% pay increase to state employees because the tax payers couldn't afford it. I wonder whether state workers can afford a 1% pay cut so they can hope to retire some day?
  17. RickyBobby
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    RickyBobby - April 11, 2012 12:30 pm
    Unions have nothing to do with bankrupting the United States, it comes from corporate greed, owners and executives lining their pockets instead of investing in the company infrastructure and employee wages/retirement. The majority of government workers in the state are underpaid as "I'm tired" pointed out and can't afford to retire. The state loses out on great workers because $25,000 to $30,000 a year for college graduates with student loans doesn't cut it. Go through the State of Montana Jobs listings and see how ridiculous the majority of state jobs pay actually is.
  18. JVH77
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    JVH77 - April 11, 2012 12:00 pm
    Using words like Democrat or Republican as some sort of insult is a clear indication that person needn't be taken seriously. Your'e the problem. Congrats fellas, you've proven yourselves inca[able of serious discussion.
  19. rockingrudy
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    rockingrudy - April 11, 2012 10:31 am
    I like the Governor's proposal. Compared to others, it's common sense and actually addresses the problem.
  20. I'm Tired
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    I'm Tired - April 11, 2012 10:10 am
    Well, i know quite a few "Government" workers. They pay more for their plans and deductions then most private sector workers. The unions do nothing much for them. The ones you should worry about are the ones that want to step in to ?"$$Fix them up$$"? I will guarantee you, when it comes to the fix, it will cost workers much more then taxpayers. Contrary to popular belief, more then 60% of state employees take home less then $700.00 every 2 weeks that's $1400.00 a month. Say they own a home? there's $1000.00, just for that. Lets put the power bill at, if they are lucky, $150.00 phone's 60.00 food $100.00 and that's if they have no children. lets add gas, clothes, insurance, and every other cost that they have on a day to day basis. Last thing to remember 50% of retired Govt. Employees started out around 5 dollars an hour or less that's $200.00 a week before deductions say they retired at $1500.00 month, a paltry sum in this day and age. that's $17,000 a year. A person working at a middle level of Town Pump or Taco Bell makes that. For a 1/2 a lifetime of service to our great state, should they not have enough to afford living here?? Shame is, the ones that get to "?$$Fix them up$$"? Get to leave there office with a retirement 5 times that. So you might want to understand how things work before you comment on them. Even better try doing what they do for a few years and see how that works out for ya. Oh and one last thing MichaelS: Most cannot afford to retire after 25 years of service. Also for Shortie: 2% of $17,000 and one increase in 4 years. Not much money at all.
  21. shortie
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    shortie - April 11, 2012 8:15 am
    MichaelS is right, private tax payers are getting sick and tired hearing these democrats lets help the union employees of the state. When you hear a democrat say we won't raise taxes you better hang on. Our governor says the the state employees will so much more for insurance and retirement but in the same breath but we we will give you a raise in salary, what. Like I said when the democrats speak you better hang on.
  22. MichaelS
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    MichaelS - April 11, 2012 7:43 am
    the private sector taxpayer is in no mood to hear about governmental worker pensions or problems as the majority by far simply have it to good. most responsible taxpayers would agree with Gov. Schweitzer that something must be done, maybe a good start would be getting rid of the goverment unions, only then will the taxpayers and the private sector get a fair and honest deal as the unions are way out of control and are bankrupting the United States. Montana needs a reduction in government workers and the removal of the government workers unions, and no goverment employee can retire with less than 25 years of service !

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