MPERA Press Releases

May 2, 2014

Montana Public Employees’ Retirement Board Announces New Executive Director

Helena, MT – The Public Employees’ Retirement Board has selected Dore Schwinden as the Executive Director for the Montana Public Employee Retirement Administration.  Mr. Schwinden begins work in this position effective May 5, 2014.

When asked about his new assignment Mr. Schwinden stated, “I look forward to working with the Board to provide exceptional service and a secure retirement for our members and retirees.  I am honored to have been selected as the Executive Director of MPERA.”

Mr. Schwinden was selected through a competitive hiring process conducted by the Public Employees’ Retirement Board.  He was selected from a final candidate pool of three individuals interviewed at a Special Board meeting on April 4, 2014.

Mr. Schwinden currently holds the position of Deputy Commissioner with the Montana Department of Labor and Industry.  He brings considerable government finance, budget, and leadership experience to this position having served as the Director of the Montana Department of Commerce and as a former state legislator.

Mr. Schwinden will succeed Roxanne Minnehan who announced her retirement plans earlier this year.


January 29, 2014

Montana Public Retirement Plans post 17.38% return on investments in 2013

The net investment return on the public pension funds for calendar year 2013 was 17.38%. The Montana Public Retirement Plans provide benefits to over 35,000 individuals including retired state and local government employees, firefighters, game wardens, highway patrol officers, judges, police officers, sheriffs, volunteer firefighters, teachers and their beneficiaries. Total investments for the nine plans were worth $9.3 billion as of December 31, 2013.

The Montana Board of Investments has invested wisely and the public pension funds met or exceeded expectations in 2013. As a case in point, the 2013 return is more than twice the 7.75% assumed rate of return adopted by the underlying retirement plans for actuarial valuation purposes.

There has recently been a fair amount of scrutiny surrounding the appropriate assumed rate of return used by public pension plans for valuation purposes. It is worth noting that according to National Association of State Retirement Administrators, in 2013 the national average public pension plan assumed rate of return was 7.72% with 8.0% being the most predominant assumption utilized by the 126 public pension plans surveyed. According to State Street, the custodian for Montana’s eight defined benefit plans’ assets, the actual net rate of return from 1994 to 2013 was 7.81%. Simply put, the long term actual rate of return of investments is slightly higher than the actuarial assumed rate of return utilized in the System’s valuation.

The goal of the two boards that govern the public pension funds (the Public Employees’ Retirement Board and the Teachers’ Retirement Board) is to set the assumed rate of return at a level that is estimated to be attainable over 20, 30, or more years. These practices allow the funds to pool and smooth investment outcomes and provide secure, lifelong post-retirement benefits for their members.

Investment return assumptions that are too low overstate the current liabilities of the system which may cause current employers, employees and taxpayers to be overcharged in order to fund the system’s liabilities in 30 years or less. Investment return assumptions that are too high understate the current liabilities of the system which may cause future employers, employees and taxpayers to be overcharged in order to fund the system’s liabilities in 30 years or less.

Although there is no way to know for sure what the actual investment return will be over the next twenty or more years, we do know that actuarial assumptions are based on actual data and professional experience. We can also clearly see that the current assumption came very close to hitting its mark based on the past twenty years of investment experience.

Roxanne Minnehan   Shawn Graham
Executive Director   Executive Director
MPERA   TRS

October 21, 2013

MONTANA PUBLIC EMPLOYEES’ RETIREMENT BOARD RECEIVES PRESTIGIOUS AWARD

Helena – For the 15th year in a row the Montana Public Employees’ Retirement Board and the Fiscal Services Bureau have received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR). The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.

The CAFR has been judged by an impartial panel to meet the high standards of the program including demonstrating a constructive "spirit of full disclosure" to clearly communicate its financial story and motivate potential users and user groups to read the CAFR.

The GFOA is a nonprofit professional association serving approximately 17,500 government finance professionals with offices in Chicago, IL and Washington, D.C.


November 14, 2012

MPERA agrees to release actuarial data to PEW Center on the States

Helena – At the request of the Legislative Fiscal Division (LFD), the Montana Public Employee Retirement Administration announced today that they are working on a Memorandum of Understanding (MOU) to release actuarial data to the Pew Center on the retirement systems. The LFD is working with PEW on ideas for addressing retirement system funding issues.

Representatives of the LFD and Pew met with stakeholders including Teachers’ Retirement and the Public Employees’ Retirement (MPERA) in Helena October 8 and 9, 2012. At that meeting, PEW requested that MPERA provide actuarial data to PEW’s actuaries. “As fiduciaries, the Public Employees Retirement Board is responsible for hiring an actuary and providing information to the legislature and the public”, stated Executive Director Roxanne Minnehan. “Because PEW may be using information from other sources we need an MOU to assure our members’ information will remain confidential as well as require that the information clearly disclose that the work product is the solely that of PEW Research Center.” While the MOU is being negotiated, PEW has provided reports to the Legislative Finance Committee and the public based on information obtained from other public sources. “Members of the retirement systems administered by the MPERA should be assured that while MPERA is anxious to learn of, and consider, any new funding options Pew may identify, we remain committed to the protection of our members’ confidential data” said Ms. Minnehan. Minnehan also encourages the public and plan members to watch for the release of any PEW information on the Montana pension plans and to contact both MPERA and their legislators to share their thoughts and opinions.

For more information, visit our website at mpera.mt.gov or find us on Facebook.


October 15, 2012

Public Employee Retirement Board Votes to Support the Governor’s Proposal

Helena –The Montana Public Employees’ Retirement Board (PERB) has voted to support Governor Schweitzer’s proposed legislation to address the funding problems in the Public Employees’ Retirement System (PERS).

After a lengthy discussion expressing concern about the possible violation of contract rights, in a 6 to 1 vote, the PERB agreed to support the governor’s proposal. “We first and foremost have an obligation to our members to ensure their retirement system is sound”, stated Scott Moore, PERB President. “The governor’s proposal incorporates a shared sacrifice by employers and employees to bring the system back into actuarial soundness. We believe this proposal stands the best chance for success with what is certain to be a difficult legislative session for retirement systems.”

Diane Fladmo with MEA-MFT and Tom Schneider with MPEA both spoke up in support of the governor’s proposal. Diane Fladmo stated, “What we have today is definitely a compromise that we’ve made on behalf of our members. We have been unable to solve this problem in past sessions. It's time now to press forward with a plan that can work - a plan that features shared sacrifice by both employers and employees."

Going forward the PERB stated on record it has some reservations regarding potential impairment of contract rights, but with the support of the unions and the understanding that there needs to be a shared sacrifice, the PERB is hopeful that retirement funding concerns will be addressed with this upcoming legislative session.

For more information, visit our website at mpera.mt.gov or find us on Facebook.


September 18, 2012

MONTANA PUBLIC EMPLOYEES’ RETIREMENT BOARD RECEIVES PRESTIGIOUS AWARD

Helena – For the 14th year in a row the Montana Public Employees’ Retirement Board and the Fiscal Services Bureau have received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR). The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.

The CAFR has been judged by an impartial panel to meet the high standards of the program including demonstrating a constructive “spirit of full disclosure” to clearly communicate its financial story and motivate potential users and user groups to read the CAFR.

The GFOA is a nonprofit professional association serving approximately 17,500 government finance professionals with offices in Chicago, IL and Washington, D.C.


July 2, 2012

Reuters columnist opinion -COLUMN-Five things to consider before cutting pension benefits


June 8, 2012

Going Defined Contribution Increases Funding Burden for Montana Taxpayers

Helena – A recent study conducted by Cheiron, the actuary for the Montana Public Employee Retirement Administration, shows that closing the Public Employees’ Retirement System (PERS) Defined Benefit Plan and placing all new employees into a Defined Contribution Plan comes at a high cost for Montana taxpayers.

A closed Defined Benefit Plan still requires funding until the last beneficiary is paid. According to the study, if the PERS Defined Benefit Plan were closed to new members, employer contributions needed to cover the unfunded actuarial liability would initially more than double from approximately $82 million per year to over $216 million per year. Employer contributions would need to increase from the current 7.13% of payroll to over 66% of payroll by 2036. “This is an increase in cost that many of our employers cannot afford. Ultimately, the cost may fall on taxpayers.” says Executive Director Roxanne Minnehan.

Closing the Defined Benefit Plan without an increase in employer contributions means that the plan will cover only 2% of its liabilities by the year 2036; years before the Plan’s obligation to its members and their beneficiaries has been met.

Minnehan stated that the cost may be even higher. The actuary assumed a continued rate of return of 7.75%. However, as the makeup of the membership shifts to a larger percentage of retirees, investments will shift to more conservative options. The lower than expected rates of return will result in the need for even higher contributions.

To see the results of the Cheiron study, visit our website at: mpera.mt.gov.


February 21, 2012

MPERA RELEASING RETIREE INFORMATION

Helena – The Montana Public Employee Retirement Administration (MPERA) is releasing retiree information to the Montana Watchdog, a media outlet. About a year ago the Montana Watchdog requested that MPERA release retiree names and pension amounts for the ten members of the Public Employees’ Retirement System receiving the highest annual benefit amounts. At that time MPERA did not release this information in an effort to protect the privacy of its members. Since then, an Attorney General’s opinion was published determining that the public’s right to know outweighs retirees’ individual rights of privacy and Montana Watchdog expanded their request to retirees in all MPERA administered retirement systems, which include retirees from covered state, city, county and other covered employers.

MPERA’s Executive Director, Roxanne Minnehan and the Montana Teachers’ Retirement System’s (TRS) Director, David Senn, met with Phil Drake from the Montana Watchdog and Carl Graham from the Montana Policy Institute to negotiate an agreement for the type of information that will be released. MPERA and TRS agreed to release retiree names listed with the retirement system from which he or she retired, the retiree’s last employer, service credit, and an estimate of the combined amount that their employer(s) contributed throughout their employment. TRS released this information to Montana Watchdog on February 1, 2012 and MPERA anticipates releasing their information on February 21, 2012.

"What people seem to be asking is, how much are taxpayers paying for pension benefits?" said MPERA’s Executive Director, Roxanne Minnehan. "We are trying to give information that is a true reflection of taxpayer contributions. What many people don’t understand is that public employees contribute to their retirement account throughout their careers both as employees and as taxpayers. When they retire, their pensions are paid largely from the investment earnings."

The information MPERA is releasing shows estimated total employer contributions, not a retiree’s benefit amount. Once someone retires, the retirement system does not receive any more contributions for that person. Their retirement benefits are paid from their retirement system’s pension trust fund.

A study conducted by the National Association of State Retirement Administrators (NASRA) determined that in Montana state and local governments spend a total of 2.38% of their overall budgets funding public pension benefits. “Montana’s local governments typically spend less than 2% of their overall budgets on pension benefits. This is a small percent when you consider how much of that money returns to each of our Montana communities,” stated Minnehan.

For more information, visit our website at mpera.mt.gov or find us on Facebook.


December 5, 2011

UPCOMING RELEASE OF PUBLIC RETIREE INFORMATION

Helena – An agreement was reached between the Montana Public Employee Retirement Administration (MPERA) and the Montana Watchdog regarding information for retirees with benefits administered by MPERA.

About a year ago the Montana Watchdog requested that MPERA release retiree names and pension amounts; however, MPERA did not release this information in an effort to protect the privacy of its members. The Montana Teachers’ Retirement System (TRS) received the same request and asked for an Attorney General opinion on the issue. Recently, Attorney General Bullock released an opinion that the public’s right to know outweighed the individual rights of privacy of state retirees in their retirement benefits.

MPERA’s Executive Director, Roxanne Minnehan and TRS’s Director, David Senn, met with the Montana Watchdog to negotiate an agreement for the type of information that will be released. “Our concern with releasing pension amounts is the perception that taxpayers are fully funding retiree pensions. This is simply not the case,” stated Minnehan. “Public employees contribute to their retirement account throughout their careers both as employees and taxpayers. When they retire, their pensions are paid largely from the investment earnings on those contributions with a portion contributed by taxpayers. It is misleading to imply that taxpayers pay the full amount of a retiree’s benefit,” said Minnehan.

Benefit amounts are not a true reflection of taxpayer contributions. Many retirees have purchased service they were eligible for, which increases the years of service used to calculate their benefit. This expense is paid solely by the member. Benefit amounts are also dependent upon the retirement option a member chooses. Monthly and lifetime benefit amounts vary significantly based on this personal, financial choice.

With this in mind, MPERA has agreed to release retiree names listed with their last employer, years of service credit and the estimated amount that their employer contributed throughout their employment. “The question seems to be, “how much are taxpayers paying for pension benefits?” says Minnehan. A study conducted by the National Association of State Retirement Administrators (NASRA) determined that in Montana state and local governments spend a total of 2.27% of their overall budgets funding public pension benefits. “Montana’s local governments typically spend from 1 – 2% of their overall budgets on pension benefits. This is a small percent when you consider how much of that money returns to each of our Montana communities,” stated Minnehan. MPERA plans to release the information in January 2012. For more information, visit our website at mpera.mt.gov or find us on Facebook.


September 13, 2011

MONTANA PUBLIC EMPLOYEES’ RETIREMENT BOARD RECEIVES PRESTIGIOUS AWARD

Helena – the Certificate of Achievement for Excellence in Financial Reporting has been awarded to Montana Public Employees’ Retirement Board by the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR). The certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.

An Award of Financial Reporting Achievement has been awarded to the individuals(s), department or agency designated by the government as primarily responsible for preparing the award-winning CARF. This has been presented to:

Fiscal Services Bureau, Montana Public Employees’ Retirement Board.

The CAFR has been judged by an impartial panel to meet the high standards of the program including demonstrating a constructive “spirit of full disclosure” to clearly communicate its financial story and motivate potential users and user groups to read the CAFR.

The GFOA is a nonprofit professional association serving approximately 17,500 government finance professionals with offices in Chicago, IL and Washington, D.C.


May 13, 2011

GOVERNOR SIGNS PENSION IMPROVEMENTS

Helena- With Gov. Brian Schweitzer's signatures on a trio of bills adjusting pension plans for public workers, steps have been taken in the right direction to make the plans more financially viable for the long term.

"House Bill 122 was our suggestion for improvements to the Public Employees' Retirement System, covering most public workers, and House Bills 134 and 135 were specific for improvements to the pension plans for Game Wardens and Peace Officers Retirement System' and Sheriffs' Retirement System," said Roxanne Minnehan, executive director of the Montana Public Employees' Retirement Administration (MPERA).

"We still have funding deficiencies in a few of the retirement plans covering state, county and city workers, but bills like these make improvements little by little that we'll see over time," Minnehan stated.

For new hires in all three plans, effective July 1 pension calculations will be made averaging the high five years of earnings, instead of the current high-three. The change prevents so-called spiking of retirement benefits via late-career pay raises or substantial pre-retirement overtime pay to boost the average when figuring monthly benefits.

Beginning July 1, 2011, new hires under PERS will see these changes: normal retirement age increases from 60 to 65, and eligibility for early retirement increases from age 50 to 55 with five years of membership service. Employee contributions also increase from 6.9% to 7.9%.

"The changes made this session are a beginning to addressing the funding shortfalls", said Minnehan. "No doubt funding for the retirement systems will be revisited during the next legislative session."


April 25, 2011

HIGH TOTAL RETURNS ON STATE RETIREMENT FUNDS

HELENA– High total returns on some retirement funds for Montana city, county and state pensioners were reported recently to the board of directors of the Montana Public Employees’ Retirement Administration (MPERA).

At its regular monthly meeting in Helena, the board was told by Clifford Sheets, chief investment officer of the Montana Board of Investments that the retirement fund covering the state’s largest group of retirees, the Public Employees’ Retirement System, had a return of 19.8% for the fiscal year through March 31, driven mostly by strong returns from publicly traded stocks. It was 4.4% for the first quarter of this year, he added, and both rates appear to indicate a strong fiscal year for investment earnings. He cautioned, however, that we were in a similar position a year ago, and the last quarter of the fiscal year suffered from a sharp correction in stocks that pulled down final results for the full fiscal year. read more...


March 30, 2011

PENSION PLAN SWITCH OPPOSED BY STATE EMPLOYEE RETIREMENT BOARD

Conversion to an all Defined Contribution plan for state, county and city workers was opposed Wednesday morning by the Montana Public Employee Retirement Administration (MPERA) and six statewide employee organizations in testimony before the House State Administration Committee.

No one else spoke in support of SB328 after an initial explanation by its sponsor, Sen. Dave Lewis (R-Dist. 42). The House committee will take executive action on the measure at its Friday meeting at 8 a.m.

The proposed legislation for new hires in the Public Employees' Retirement System (PERS) seeks to change most public employee retirements from a defined-benefit method, by which employees are typically guaranteed a certain amount in monthly pension based on career earnings and contributions, in favor of a defined-contribution plan, similar to a 401(k) plan, in which workers are responsible for deciding where and how their contributions are invested, and how much can be drawn out monthly upon retirement. read more...



February 28, 2011

PENSION SHORTFALL COULD BE REMEDIED

Shortages in a few state public employee pension funds could be remedied for new hires though higher pension contributions by workers, increasing the age for retirement eligibility, and a change to how benefits are calculated. But to work, the solutions also need to include increased contributions from public employers.

The Montana Public Employees' Retirement Administration (MPERA) has proposed fixes for the Game Wardens & Peace Officers Retirement System in House Bill 134, the Sheriffs Retirement System (HB135) and the Public Employees' Retirement System (HB122). read more...



January 19, 2011

MPERA WORKS TO IMPROVE SOLVENCY OF RETIREMENT FUNDS

Helena - The Montana Public Employee Retirement Administration (MPERA) has proposed legislation in the 2011 Legislative Session to help better ensure the long-term stability of three of the eight retirement systems administered by the agency. The pension funds for Sheriffs, Game Wardens & Peace Officers, and Public Employees currently do not meet the requirements to be actuarially sound.

"None of these three retirement systems are in danger of failing, because there is no possibility that all the debts will come due right now," said Roxanne Minnehan, MPERA executive director. "But MPERA feels that there needs to be some action taken during the legislative session to help ensure the funds' solvency over the coming decades." read more...



December 13, 2010

RETIRED GOVERNMENT WORKERS SPEND LOCALLY

Helena -- Businesses in cities and towns across Montana are boosted substantially by the $250 million in benefits received every year by state, county and local government pensioners from retirement plans administered by the Montana Public Employee Retirement Administration (MPERA).

Before retiring, these public servants showed up for work every day as snowplow drivers, policemen, child protection workers, license plate issuers, garbage collectors, game wardens and many other public service jobs that help Montana's government run.

"These retired workers from county courthouses, city halls and assorted state agencies aren't typically seen as an economic engine, but they spend a lot of money in stores and professional offices every day," said Roxanne Minnehan, MPERA executive director in Helena. read more...



November 30, 2010

AVERAGE FIREFIGHTERS RETIREMENT IS $27,596

Firefighters do hard work and look forward to the day when they can retire to a safer existence. They get burned and cut up on the job, and exposed to communicable diseases when responding in their roles as EMTs. Rescues can be in snow or sun, on land or water. Hazardous chemicals can also be involved.

"Firemen contribute quite lot more than average public workers toward their retirement plans," explained Roxanne Minnehan of Helena, executive director of the Montana Public Employees' Retirement Administration (MPERA).

"In addition to those years of irregular sleep, mental stress and hazardous workplaces," said Minnehan, "firefighters defending the Montana public have 10.7% of their pay deducted for retirement benefits, compared to members of the Public Employees Retirement System (PERS) who contribute 6.9%. read more...