House Bill No. 505
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act reducing the vesting requirements for members of the municipal police officers' retirement system; increasing employer and state contributions; superseding the unfunded mandate law; amending sections 19-9-104, 19-9-301, 19-9-702, 19-9-703, and 19-9-801, MCA; and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 19-9-104, MCA, is amended to read:
"19-9-104. Definitions. Unless the context requires otherwise, the following definitions apply in this chapter:
(1) "Compensation" means the remuneration, excluding overtime, holiday payments, shift differential payments, compensation time payments, and payments in lieu of sick leave and annual leave, that a member receives as an active police officer.
(2) "Dependent child" means a child of a deceased member:
(a) who is unmarried and under 18 years of age; or
(b) who is unmarried, under 24 years of age, and attending an accredited postsecondary educational institution as a full-time student in anticipation of receiving a certificate or degree.
(3) "Employer" means any city that participated in a prior plan or that elects to join this retirement system under 19-9-207.
(4) "Final average compensation" means the monthly compensation of a member, averaged over the last 36 months of
the member's service or, in the event a member has not been a member that long, over the period of membership.
(5) "Minimum retirement date" means the first day of the month coinciding with or, if none coincides, the date on which a
member both becomes age 50 and completes
10 5 years of membership service.
(6) Any reference to "municipality", "city", or "town" includes those jurisdictions that, prior to the effective date of a county-municipal consolidation, were incorporated municipalities, subsequent districts created for urban law enforcement services, or the entire county included in the county-municipal consolidation.
(7) "Prior plan" means the local police reserve or pension trust fund of a city that elects to join the retirement system under 19-9-207.
(8) "Retirement date" means the date on which the first payment of the retirement, disability, or survivorship benefits of a member or a survivor is payable.
(9) "Surviving spouse" means the spouse married to a member at the time of the member's death.
(10) "Survivor" means a surviving spouse or dependent child of the member."
Section 2. Section 19-9-301, MCA, is amended to read:
"19-9-301. Active membership -- inactive vested member -- inactive nonvested member. (1) A police officer becomes an active member of the retirement system:
(a) on the date the police officer's service with an employer commences;
(b) on July 1, 1977, if the police officer is employed by an employer on that date; or
(c) in the case of an employer that elects to join the retirement system as provided in 19-9-207, on the effective date of the election if the police officer is employed by the employer on that date.
(2) Upon becoming eligible for membership, the police officer shall complete the forms and furnish the proof required by the board.
(3) A member becomes an inactive member on the first day of an approved absence from service of a substantial duration.
(4) A member with at least
10 5 years of membership service who terminates service and does not take a refund of the
member's accumulated contributions is an inactive vested member and retains the right to purchase service and to receive a
retirement benefit under the provisions of this chapter.
(5) A member with less than
10 5 years of membership service who terminates service and leaves the member's
accumulated contributions in the pension trust fund is an inactive nonvested member and is not eligible for any benefits
from the retirement system. An inactive nonvested member is eligible only for a refund of the member's accumulated
Section 3. Section 19-9-702, MCA, is amended to read:
"19-9-702. State contribution. The state of Montana shall make its contributions through the state auditor out of the
premium tax on motor vehicle property and casualty insurance policies. The payments must be made annually after the end
of each fiscal year but no later than November 1 from the gross premium tax after deduction for cancellations and returned
premiums. The division shall notify the auditor by September 1 of each fiscal year of the annual compensation paid to all
active members during the preceding fiscal year. The state's contribution is
15.66% 15.71% of compensation paid to
Section 4. Section 19-9-703, MCA, is amended to read:
"19-9-703. Employer contribution. Each employer shall make its contribution through the city treasurer or other
appropriate official out of money available to the city for that purpose. The employer's contribution, which must be paid
monthly to the division, is
14.36% 14.41% of the compensation paid to all active members."
Section 5. Section 19-9-801, MCA, is amended to read:
"19-9-801. Eligibility for service retirement -- commencement of benefit. (1) Members are eligible for retirement as provided in this section.
(2) A member is eligible to receive a service retirement benefit when the member has completed 20 years or more of membership service and has terminated service.
(3) A member who terminates service after completing at least
10 5 years of membership service but prior to completing
20 years of membership service is eligible to receive a service retirement benefit when the member has reached 50 years of
(4) (a) Except as provided in subsection (4)(b), the retirement benefit may commence on the first day of the month following the member's minimum retirement date or, if requested by the inactive member in writing, on the first day of the month following receipt of the written application.
(b) The retirement benefit for an eligible inactive member must commence no
later earlier than the first day of the month
following the member's 55th 50th birthday."
NEW SECTION. Section 6. Unfunded mandate law superseded. The provisions of [this act] expressly supersede and modify the requirements of 1-2-112 through 1-2-116.
NEW SECTION. Section 7. Effective date. [This act] is effective July 1, 1997.