Posted: Mar 23, 2013 9:44 AM by Marnee Banks - MTN News
HELENA- The Montana House Budget Committee has made a big decision about how to fix the state's $4 billion pension shortfall.
Lawmakers voted 14-to-7 on Friday afternoon to keep the current defined benefit plan, which guarantees retirees a predetermined benefit every month regardless of how the investment performs.
But the Legislature has agreed to tweak the plan to make it financially solvent. The bills requires employees to pay 1% more into their pension funds, and in return the state will also pay 1% more. Additionally the state will use coal tax money to shore up the fund.
The other plan on the table would convert the system to a defined contribution plan subjecting the retirement funds to market fluctuation. A leading lawmaker on the budget committee told us this plan will likely die in committee.
The House Budget Committee also passed Governor Steve Bullock's JOBS bill Friday afternoon, but not before significantly amending it.
The bonding bill as amended authorizes the state to sell over $60 million worth of bonds to pay for eight construction projects across Montana.
Seven of them are university system projects, and on Friday, lawmakers agreed to take out the Montana Historical Society construction project, worth $23 million.
The funding for this project is now in a separate bill which authorizes the state to pay cash for the building instead of bonding for it.