What a difference a state line can make. Teacher retirement funds in North Dakota seek the state’s assistance to bolster their solvency, a marked contrast to the state of things in neighboring Montana, where the financial condition of teacher retirement plans has rebounded.
The North Dakota School Boards Association (NDSBA) and the Fargo School Board seek state assistance in improving the solvency of the Teachers Fund for Retirement (TFFR), reports WDAZ. The TFFR reportedly took a financial hit during the Great Recession, and Fargo School Board member Jim Johnson told WDAZ that TFFR payments are taking their toll on budgets and contract negotiations. The Fargo School District, for instance, pays 12.75% of total salaries into the TFFR and teachers contribute 11.75% of their pay, according to Johnson. In 2014, that translated to $6.8 million in contributions by Fargo into the TFFR and $12.9 in payments by Fargo District teachers.
The NDSBA and Johnson’s request that the state legislature to help boost the TFFR includes the following suggestions:
1. catch-up allocations from the state’s general fund that would put TFFR funding at 100 percent;
2. a separate state appropriation to school districts equivalent to 5% of their certified staff payroll;
3. a rollback to pre-2008 TFFR contribution levels, with the state paying the post-2008 until the plan is fully funded; and
4. an agreement to study the current TFFR funding system and explore other solutions.
But next door in Montana, things are very different. According to The Montana Standard, measures put in place in 2013 to bolster pension funds for state and local government employees, including teachers, did exactly that.
As in North Dakota, the Great Recession hit Montana public pension funds hard. But in 2013 the legislature passed, and Gov. Steve Bullock (D) signed into law, measures that:
1. put tens of millions into the plans;
2. limited employees getting promotions just before they retired so as to increase the size of their pensions; and
3. required employers and employees to contribute more into the funds.
These steps, in conjunction with better returns on the investments made with plan funds and pension smoothing, have improved the condition of the Montana funds. Teachers Retirement System (TRS) Executive Director Shawn Graham told The Montana Standard that the TRS amortizes in 28 years and is projected to hit full funding by 2042.
The North Dakota School Boards Association (NDSBA) and the Fargo School Board seek state assistance in improving the solvency of the Teachers Fund for Retirement (TFFR), reports WDAZ. The TFFR reportedly took a financial hit during the Great Recession, and Fargo School Board member Jim Johnson told WDAZ that TFFR payments are taking their toll on budgets and contract negotiations. The Fargo School District, for instance, pays 12.75% of total salaries into the TFFR and teachers contribute 11.75% of their pay, according to Johnson. In 2014, that translated to $6.8 million in contributions by Fargo into the TFFR and $12.9 in payments by Fargo District teachers.
The NDSBA and Johnson’s request that the state legislature to help boost the TFFR includes the following suggestions:
1. catch-up allocations from the state’s general fund that would put TFFR funding at 100 percent;
2. a separate state appropriation to school districts equivalent to 5% of their certified staff payroll;
3. a rollback to pre-2008 TFFR contribution levels, with the state paying the post-2008 until the plan is fully funded; and
4. an agreement to study the current TFFR funding system and explore other solutions.
But next door in Montana, things are very different. According to The Montana Standard, measures put in place in 2013 to bolster pension funds for state and local government employees, including teachers, did exactly that.
As in North Dakota, the Great Recession hit Montana public pension funds hard. But in 2013 the legislature passed, and Gov. Steve Bullock (D) signed into law, measures that:
1. put tens of millions into the plans;
2. limited employees getting promotions just before they retired so as to increase the size of their pensions; and
3. required employers and employees to contribute more into the funds.
These steps, in conjunction with better returns on the investments made with plan funds and pension smoothing, have improved the condition of the Montana funds. Teachers Retirement System (TRS) Executive Director Shawn Graham told The Montana Standard that the TRS amortizes in 28 years and is projected to hit full funding by 2042.
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