HELENA - A retirement board that has been feuding with the governor over the way it hired a new executive director says the administration needs to do more to fix looming deficits in state pension systems.
The board president of the Public Employees Retirement Administration sent Gov. Brian Schweitzer a letter late Monday asking him to expand the special legislative session later this month to put more money into pension systems.
The administration said the special session needs to be focused on critical problems that can be addressed quickly. The governor is sticking with his plan to use $125 million of the state's surplus to buoy the retirement plans, said budget director David Ewer.
The state faces a projected $1.4 billion deficit in its pension systems. While most of that is in the system for teachers, the employee systems covered by PERA also face large unfunded balances.
Retirement board president Carole Carey said in a letter to Schweitzer that he needs to do more to meet a constitutional requirement to make the pension plans whole.
Carey told the governor in the letter that the board has a "profound concern with the restricted scope of your special session call and the inadequate proposal for funding the public retirement systems that are actuarially unsound."
She said the employer contributions, which come from a combination of state and local tax money, could be increased as recommended by an interim legislative panel. The money would be funneled into the systems over a number of years - in addition to the $125 million cash infusion.
Ewer said the employer contribution hikes should be tackled in the 2007 regular legislative session - along with new laws to increase oversight of the pension systems.
"We are taking the most compelling action now, and waiting for the more complicated and more difficult action during the regular session," Ewer said.
The Public Employees Retirement Administration board has had a tense relationship with Schweitzer in recent months. The governor sued the board, saying it held illegal closed door meetings when it hired a new executive director.
A report from the administration said the board was too cozy and may have hired a former colleague at the expense of more qualified candidates.
Board members have lashed out that notion, saying the governor is looking for scapegoats for the state's pension crisis.
The projected deficit in the pension systems has been blamed on stock market losses in 2001 and 2002, unfunded benefit hikes made by the Legislature and lack of oversight.