The bill proposes significant revisions to the Public Employees' Retirement System (PERS) in Montana, establishing a special select committee dedicated to public employee retirement systems and creating a Pension Special Trust Fund. A key provision includes the transfer of $300 million from the general fund to this trust fund by July 1, 2023, aimed at addressing discrepancies between the actuarially determined employer contribution rate and the base rate. The bill also amends existing statutory language to clarify definitions related to retirement benefits and unfunded liabilities, while introducing new employer contribution requirements that mandate a contribution of 9.29% of employee compensation for both defined benefit and defined contribution plans starting July 1, 2023.

Additionally, the bill modifies the amortization periods for unfunded liabilities and establishes a layered amortization funding policy to enhance the financial sustainability of the retirement system, which currently faces a $2.25 billion unfunded liability. It specifies that beginning July 1, 2024, employers must contribute either the actuarially determined employer contribution or a base rate of 9.79%, with a gradual increase in the base rate over the following years. The bill also outlines the allocation of contributions to various funds, including educational programs and long-term disability plans, and mandates the formation of a select committee to assess the financial stability of the retirement systems, with an appropriation of $45,000 from the general fund for its operations.

Statutes affected:
HB0226_1.pdf: 19-2-303, 19-2-405, 19-2-409, 19-3-315, 19-3-316, 19-3-319, 19-3-1605, 19-3-2111, 19-3-2117, 19-21-214
HB0226_2.pdf: 19-2-303, 19-2-405, 19-2-409, 19-3-315, 19-3-316, 19-3-319, 19-3-1605, 19-3-2111, 19-3-2117, 19-21-214
HB0226_3.pdf: 19-2-303, 19-2-405, 19-2-409, 19-3-315, 19-3-316, 19-3-319, 19-3-1605, 19-3-2111, 19-3-2117, 19-21-214
Amended: 19-2-303, 19-2-405, 19-2-409, 19-3-315, 19-3-316, 19-3-319, 19-3-1605, 19-3-2111, 19-3-2117, 19-21-214
Introduced: 19-2-303, 19-2-405, 19-2-409, 19-3-315, 19-3-316, 19-3-319, 19-3-1605, 19-3-2111, 19-3-2117, 19-21-214