SENATE BILL NO. 195

INTRODUCED BY J. LYNCH, J. QUILICI, G. BECK, S. DOHERTY, E. FRANKLIN, S. GALLUS, L. GRINDE, M. HALLIGAN, D. HARGROVE, J. HARP, D. HARRINGTON, B. MCCARTHY, B. PAVLOVICH,

D. SHEA, S. STANG, B. WILSON

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR QUALIFICATION OF CERTAIN ACTIVE MILITARY SERVICE IN THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM; EXEMPTING MILITARY SERVICE PURCHASES FROM THE LIMIT ON ADDITIONAL SERVICE; AMENDING SECTIONS 19-3-503 AND 19-3-513, MCA; AND PROVIDING AN EFFECTIVE DATE AND A TERMINATION DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 19-3-503, MCA, is amended to read:

"19-3-503. Election to qualify military service. (1) (a) Except as provided in subsection (2), a member with 10 years or more of service credits may, at any time prior to retirement, make a written election with the board to purchase service credits for all or any portion of the member's active service in the armed forces of the United States, including the first special service force or the American merchant marine in oceangoing service during the period of armed conflict, December 7, 1941, to August 15, 1945, up to a maximum of 5 years, if the member is not otherwise eligible to receive service credit for this same service pursuant to 19-2-705 or is ineligible under subsection (2)(a).

(b) Except as provided in subsection (3), to qualify this service, the member shall contribute to the pension trust fund the actuarial cost of the service credit based on the most recent actuarial valuation of the system.

(2) (a) If a member has retired from active duty in the armed forces of the United States, including the first special service force or the American merchant marine in oceangoing service during the period of armed conflict, December 7, 1941, to August 15, 1945, with a military service retirement benefit, the member may not qualify the member's military service under subsection (1) or subsection (3).

(b) However, a member who is serving or has served in the military reserves with the expectation of receiving a military service pension may qualify the member's active military service under subsection (1) if the member's active duty in the armed forces of the United States, including the first special service force or the American merchant marine in oceangoing service during the armed conflict, December 7, 1941, to August 15, 1945, is not more than 25% of the total sum of all years of military service, including reserve and active duty time.

(3) (a) A member may, prior to retirement, receive up to 4 years of creditable service for active service in the armed forces of the United States, which includes the army, navy, marine corps, air force, and coast guard, during the Korean conflict between June 1, 1950, and January 31, 1955, and the Vietnam conflict between December 22, 1961, and May 7, 1975, dates inclusive, if the member has at least 10 years of membership service in the retirement system and is not otherwise ineligible under subsection (2)(a).

(b) To qualify this service, a member shall:

(i) submit to the board a completed application form and proper certification of the member's military service; and

(ii) contribute to the pension trust fund the amount determined by the board to be due based on the member's compensation and regular contribution rate as of the member's 11th year and based on as many succeeding years as are required to qualify this service, with regular interest from the date on which the member becomes eligible for this benefit to the date on which the member makes the required contribution.

(c) Service qualified pursuant to this subsection (3) is in addition to the service that may be qualified under subsection (1), except that a member may not receive duplicate credit for the same years of military service."

Section 2. Section 19-3-513, MCA, is amended to read:

"19-3-513. Election to purchase additional service. (1) At any time before retirement, a person who has 5 years or more of membership service may make a written election with the board to purchase additional service credit for the purpose of calculating the member's retirement benefit. Except as provided in subsection (3), the member may purchase 1 year of additional service credit for each 5 years of membership service that the member has qualified under the retirement system, up to a maximum of 5 years of additional service.

(2) For each year of service credit purchased under this section, a member shall contribute to the pension trust fund the actuarial cost of the service credit based on the most recent actuarial valuation of the system. Contributions may be made in a lump-sum payment or by making additional contributions in installments as agreed upon by the member and the board.

(3) (a) Except as provided in subsection (3)(b), a member may elect to qualify a combined total of 5 years of service under 19-3-512 or this section.

(b) A member who has purchased service under 19-3-503 or 19-3-512 on or before January 1, 1990, and who elects to purchase service under this section must receive credit for the full months of service purchased on or before January 1, 1990.

(4) Service purchased under this section is not membership service and may not be used to qualify a member for service retirement."

NEW SECTION. Section 3. Effective date. [This act] is effective July 1, 1999.

NEW SECTION. Section 4. Termination. [This act] terminates July 1, 2001.

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