MEA-MFT stops attack on retirement!

Feb. 26: SB 484 (Balyeat) died this morning after two Montana senators changed their votes for 3rd Reading, just before the legislature's transmittal break.

SB 484 earlier passed Senate State Administration by a very unexpected 6-5 proxy vote, following a limited hearing. Then it passed Senate 2nd Reading Feb. 25 on a pure party-line vote, with all Democrats voting against it and all Republicans but one (John Brueggeman) voting for it.

Thanks to MEA-MFT's lobbyists and our members who made hundreds of phone calls to state senators, two Republican senators changed their votes for 3rd Reading this morning.

The vote was 24 YES - 26 NO. Voting NO were all Senate Democrats and Republican Senators John Brueggeman, Terry Murphy, and Ryan Zinke.

Please extend your thanks to all Senators who voted NO on SB 484. They have earned our respect and commendation.

SB 484 is now dead for this session. But the issue of how this state intends to deal with retirement benefits for all new hires down the road will NOT go away. We must address this issue in a deliberative and comprehensive way. And we will. And hopefully we will first "do no harm."

SB 484 was all about harm.

And there will be repercussions. Senators voting NO will face consequences. And so will we.

But, we had to make this fight . . . and we had to win.

Thank you to each and everyone of you who made a call or wrote an email . . . and then spread the word to others to do the same. It worked!

About SB 484
Lance Melton of MTSBA, put out the following summary of SB 484:"Senate Bill 484 proposes that all new hires after the effective date of the act would have to work until the age of 65 in order to qualify for full retirement benefits under either TRS (teachers) or PERS (classified staff).

That means that a new teacher coming in to teach in their first year following college would have to work for 43 years to gain retirement benefits that are currently guaranteed after 25 years.

Imagine how that will fly with a graduate looking at offers from Montana compared to other states where the pay is higher and the employer pays both sides of retirement and/or vests employees after only 25-30 years."

Lance is exactly right. SB 484 does not just attack the pension possibilities of teachers, it attacks the pension possibilities of every new hire who would be enrolled in the Public Employees Retirement System.

More on SB 484
Ultimately, SB 484 is intended to drive public workers out of career-length defined benefit pension programs and into transitory defined contribution individual account ownership, individualized investment risk, and the very real prospect of "losing it all."

SB 484 creates tiers, which typically result in lower benefits for future members that someone will eventually attempt to make equal to what older members are eligible to receive. This is the most expensive way to fund retirement benefits because in order to enhance benefits for members in the lower tier, you have to pay for the past service unfunded liabilities.

New teachers in Montana right out of college at age 22 will have to spend 43 years in the classroom and/or in administration before they are eligible for full retirement benefits.

This change in retirement benefits, on top of one of the lowest starting salaries in the nation, will worsen the current recruitment and retention crisis in many school districts.

Under SB 484, TRS members under age 65 who can no longer teach and need to retire will incur a maximum early retirement reduction of 66%. For this reason, the TRS is likely to see many more members applying to retire on disability retirement, which would increase both administrative expense to TRS and the overall cost of retirement benefits, thereby reducing any cost savings envisioned with SB 484.

Because death benefits are not reduced by SB 484, members could find their beneficiaries would receive larger retirement benefits if they die, rather than terminate and retire before age 65. This could result in a number of individuals continuing to work even though they need to retire and take care of themselves and their families.

Further, SB 484 discriminates against all new hires and will have a recklessly negative impact on the ability of schools and the State of Montana to attract and retain high-quality, capable, and career-committed staff.

At a point in time when we are already experiencing difficulty in hiring and retaining teachers in our schools, correctional officers at our facilities, and skilled/career-minded analysts for our agencies, SB 484 doesn't offer a solution but rather a threat – "work till you drop – or just leave the state."