New Pension Law Goes Into Effect - ABC FOX MONTANA NEWS, WEATHER, SPORTS - KTMF/KWYB

New Pension Law Goes Into Effect

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BOZEMAN - Nearly 100 new laws went into effect in Montana on Monday, July 1st. Some of those bills include fixing the pension plans for state employees and a new plan for funding schools.

Representative for District 64 in Bozeman, Tom Woods, worked hard this past legislative session on House Bill 377, a bill that provides additional funding for the teacher retirement system. Woods said troubles with the pension plan began during the recession in 2008.

"With a pension plan, you have to have a balance to it. There's people paying into the fund and people draw out of the fund," said Woods. "The big draw down from the recession, we were looking at the pension plan being overdrawn about 10 or 15 years from now."

Before the law passed, teachers received a full paid pension for 25 years. Now, it will be 30 years. Woods said a pension is a big part of a teacher's compensation.

"Employees are going to contribute more of their wages to the pension fund and employers of the school district are going to increase their contribution by one-percent," said Woods. "The new hires are going to have to work a little bit longer in order to get a full pension."

Woods said there's over a billion dollars in the current pension fund and is happy to know the pension system is improving.

"When you close a pension system, you have to back fill the pension dollars to the people that have been paying in," said Woods. "We've been shelling out somewhere between $9 and $11 million to that closed pension fund."

Woods is pleased this bill passed and that financial mistakes are not being repeated.

"I'm excited we headed off a big financial problem. I'm excited that we now have a state that is on sound financial footing," said Woods.

The state's new budget also went into affect on Monday, July 1st, which increases spending of state money by 11% over the next two years. Another law that requires girls younger than 18 to obtain parental consent before getting access to an abortion is also in affect.

For a view of the entire House Bill 377, click here.

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