HELENA – Gov. Steve Bullock has appointed former Rep. Mark Noennig of Billings as the new chairman of the Montana Board of Investments.

Noennig, who had served four terms as a Republican member of the Montana House, is an attorney with Hendrickson Law Firm. He’s been a member of the Board of Investments since September 2011.

Bullock selected Noennig to replace Gary Buchanan, co-owner of Buchanan Capital of Billings, as chairman. Noennig’s term expires in 2017.

“It was a complete surprise to me when I was asked to be chairman of the board,” he said. “I was very flattered or pleased.”

The board oversees the investments of various funds, including state pension funds. The board’s total investments were valued at $14.203 billion as of Dec. 31.

Buchanan, appointed chairman by former Gov. Brian Schweitzer, said he will serve out his term as a board member until 2015.

“I think it’s important the governor appoints who he wants (as chairman) and I respect that,” Buchanan said. “I’ve always been rather blunt and outspoken. Some are more comfortable than others about my independence.”

Buchanan has written columns to newspapers and done television interviews recently about the state of Montana’s pension funds. He has suggested the state fully fund the biennial pension shortfall of $238 million in part by using the money set aside in the governor’s budget for pay raises for state employees over the next two years.

His remarks have drawn criticism from Eric Feaver, president of the MEA-MFT union.

Noennig said Buchanan has been a valuable member of the board with his expertise in investments.

“The Board of Investments’ function is narrower than I think people realize,” Noennig said.

The board is required to follow the “prudent expert” rule in making its investment recommendations.

In some states, these boards decide whether to increase state employees’ and the state’s contributions to pension funds, he said. The Montana board lacks that authority.

“The fact that it doesn’t amortize on an actuarial schedule for some (pension) funds is a fact,” Noennig said. “But the solution is up to the Legislature and governor.”

Noennig said he will be operating as chairman of the board, but not as a spokesman for it.

“I don’t believe the board will take a policy position on the legislation that’s before the Legislature,” he said.

Buchanan, meanwhile, said as chairman, he tried to get the Board of Investments to focus on three concerns: the “dramatically increased (investment) costs” at the board, the “unrealistic actuarial assumption” that pension investments will show a rate of return averaging 7.75 percent annually and “a $4 billion underfunding of the pension funds.”

“I will vigorously support the next chairman, but I can’t imagine dropping my concerns,” he said.

Missoulian State Bureau reporter Charles S. Johnson can be reached at (406) 447-4066 or at chuck.johnson@lee.net.

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