House Bill No. 121
Introduced By simpkins
By Request of the Teachers' Retirement Board
A Bill for an Act entitled: An Act adjusting the Montana university system optional retirement program supplemental employer contribution rate to amortize, by July 1, 2033, the past service liabilities of the university system members participating in the teachers' retirement system; amending section 19-21-203, MCA; repealing section 19-21-111, MCA; and providing an effective date.
Be it enacted by the Legislature of the State of Montana:
Section 1. Montana university system optional retirement program supplemental contributions. (1) Each employer within the university system with employees participating in the optional retirement program under Title 19, chapter 21, shall contribute to the teachers' retirement system a supplemental employer contribution sufficient to amortize, by July 1, 2033, the past service liability of the teachers' retirement system for the university system members.
(2) The optional retirement program supplemental employer contribution as a percentage of the total compensation of all employees participating in the program must increase to:
(a) 2.81% beginning July 1, 1997;
(b) 3.12% beginning July 1, 1998;
(c) 3.42% beginning July 1, 1999;
(d) 3.73% beginning July 1, 2000; and
(e) 4.04% beginning July 1, 2001.
(3) The board shall periodically review the supplemental employer contribution rate and recommend adjustments to the legislature as needed to maintain the amortization of the university system's past service liability by July 1, 2033.
Section 2. Section 19-21-203, MCA, is amended to read:
"19-21-203. Contributions. (1) Each optional retirement program participant shall contribute an amount equal to the member's contribution required under 19-20-602. The board of regents shall contribute an amount that, when added to the participant's contribution, is equal to 12% of the participant's earned compensation.
(2) (a) On or after July 1, 1997, the board of regents may:
(i) reduce the participant's contribution rate established in subsection (1) to an amount not less than 6% of the participant's earned compensation; and
(ii) increase the employer's contribution rate to an amount not greater than 6% of the participant's earned compensation.
(b) The sum of the participant's and employer's contributions made under subsection (2)(a) must remain at 12% of the participant's earned compensation.
(3) The board of regents shall determine whether the participant's contribution is to be made by salary reduction under section 403(b) of the Internal Revenue Code of 1954 or by employer pick-up under section 414(h)(2) of that code.
(4) The disbursing officer of the employer or other official designated by the board of regents shall pay both the participant's contribution and the appropriate portion of the regents' contribution to the designated company or companies for the benefit of the participant.
(a) The board of regents shall contribute the amounts specified in subsection (5)(b) make the supplemental
contributions to the teachers' retirement system as provided in [section 1] to discharge the obligation incurred by the
employees of the Montana university system who elect or who are required to become members of the optional retirement
plan. The contributions paid by the board are for the past service liability incurred by active, inactive, and retired members
of the teachers' retirement system and must be consistent with the requirements of 19-21-111. (b) (i) Beginning July 1, 1993, through June 30, 1997, the contributions to be made by the board of regents must equal
2.503% of earned compensation attributable to optional retirement participants. (ii) Beginning July 1, 1997, the contribution rate must be adjusted, pursuant to 19-20-201, based on the actual experience of
the members of the Montana university system who are members of the teachers' retirement system, and must be set at a
rate sufficient to amortize the past service liability of the university system members by July 1, 2033."
Section 3. Repealer. Section 19-21-111, MCA, is repealed.
Section 4. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 19, chapter 20, part 6, and the provisions of Title 19, chapter 20, part 6, apply to [section 1].
Section 5. Effective date. [This act] is effective July 1, 1997.