Inquiry delves into pension deficits
Montana State Roundup
Published July 1, 2005 | July 2005 issue
Lawmakers want to know why the state's two largest retirement programs for public workers are in trouble and what can be done about it. In May, a legislative committee put ballooning deficits in pension plans for public employees and teachers at the top of a list of government issues to be studied before the next session.
A state audit last fall found that the unfunded liability for the teachers' plan—the amount of future benefit obligations that are not covered by income from contributions and investments—almost doubled to $757.8 million between 2002 and 2004. The shortfall in another plan for public employees skyrocketed from $1 million to $466.8 million in the same period. Together, the plans cover 71,000 active and retired personnel.
Like pension plans across the country, the programs have been hit hard by investment losses in the wake of the 2001 stock market meltdown. In addition, the Schweitzer administration believes that benefit increases in 1999 and 2001 contributed to the deficits. Lawmakers are expected to address the pension deficits in a special legislative session slated for December.