Guest opinion: State must honor promise to retired teachers

2013-11-08T00:00:00Z Guest opinion: State must honor promise to retired teachersBy SCOTT McCULLOCH The Billings Gazette
November 08, 2013 12:00 am  • 

Montanans value their quality educators. In the midst of the Great Depression, the 1937 Legislature created a retirement system, in part, to honor their service. They also sought to provide economic stability to a population of senior Montanans.

For nearly 76 years, the Teachers' Retirement System has provided Montana teachers with pensions.

For a long period in its history, the system failed to adjust payment levels to match inflation.

Increases in the cost of living bore into the monthly checks. The first check received by the retirees was the best they were to get as time and the economy eroded from subsequent payments their purchasing power.

Inflation hedge

The advent of the guaranteed annual adjustment to pension benefits in 1999 provided retirees with a partial hedge against inflation. The 1.5 percentage increase per year helped pensioners cope with the economic challenges of retirement.

Governor Bullock and the 2013 Legislature undertook a modification of the retirement system. Actuarial concerns for the long-term health of the fund prompted legislative action to shore up the economic stability of the plan.

The work of the lawmakers and strong investment returns have successfully brought the pension system into an amortization that pays off well within the 30-year limit set by state law and makes the plan actuarially sound. Moody's Investment Service has hailed the recovery of the fund.

Given the nature of law making, it will come as no surprise that the legislation twists and turns through the workings of the pension system. Educators increased their monthly contributions to the fund. New hires fell under provisions that changed the calculation of their benefits.

School districts contributed more. The state added a fresh influx of money.

Among the provisions wedged into the law is a reduction of the annual adjustment to the pensioners' benefits. The 1.5 percentage increase that has provided a partial protection against inflation has been reduced to 0.5 percent.

Legislative overreach

Six members of the retirement system and the MEA-MFT have gone to court to restore the annual adjustment to its previous level. The plaintiffs argue that the Legislature over-extended the pension fix when it sliced the benefit. A restoration of the 1.5 percent keeps a healthy amortization while honoring a contract right enjoyed by Montana's teachers.

The Billings Education Association supports their efforts. For those who endorse the notion that we need to compensate teachers to get the most effective classroom professionals, the inclusion of a healthy retirement program into the incentive package resonates well.

At its core, the lawsuit affords Montana the opportunity to end the partisan imbroglio that has surrounded the issue of public pensions. The retirement system must be allowed to fulfill its mission to provide financial security to its members. The incautious talk of reducing or ending the pension plan that found its way into the Senate and House chambers last session needs to end.

The Dec. 4 preliminary hearing puts the state on the road to restoring more than a guaranteed annual benefit adjustment. It revitalizes a promise made in 1937 to Montana teachers that the state values them beyond their classroom years.

Scott McCulloch is president of the Billings Education Association.


Copyright 2015 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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