House Bill No. 112
Introduced By ahner, lynch, van valkenburg, beck, halligan, waterman, hertel, bartlett, lawson, schmidt, menahan, rose, harper, j. johnson, masolo, squires, kitzenberg, cocchiarella, galvin, harrington, hibbard, pavlovich, shea
By Request of the Teachers' Retirement Board
A Bill for an Act entitled: "An Act providing for
a biennial AN AD HOC postretirement adjustment for retired teachers;
providing a state contribution; revising eligibility requirements; amending sections 19-20-711, 19-20-712, and SECTION
19-20-713, MCA; and providing an immediate effective date AND A TERMINATION DATE."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. State contribution --
biennial AD HOC postretirement adjustment. (1) The state shall
contribute monthly $2 MILLION to the pension trust fund a sum equal to 0.40% of the compensation reported to the
retirement system each month ON JANUARY 1, 1998.
(2) The amount received by the retirement system under subsection (1) must be deposited into a reserve fund to be used
each odd-numbered year to pay a postretirement adjustment pursuant to 19-20-713. AN ADJUSTMENT MADE UNDER
THIS SECTION IS NOT SUBJECT TO 19-20-712.
(3) A BENEFIT RECIPIENT IS ELIGIBLE TO RECEIVE AN AD HOC ADJUSTMENT PAYABLE WITH THE RECIPIENT'S JANUARY 1998 BENEFIT IF THE RECIPIENT IS AT LEAST 60 YEARS OF AGE AND THE RETIRED MEMBER HAS BEEN OR WAS RETIRED FOR AT LEAST 10 YEARS.
Section 2. Section 19-20-711, MCA, is amended to read: "19-20-711. Eligibility for postretirement adjustment. (1) Except as provided in subsection (2), a member retiree or
beneficiary is eligible to receive a postretirement adjustment, as provided in 19-20-713, if he the retiree or beneficiary is
receiving a: (a) service is receiving a monthly retirement allowance and is 55 60 years of age or older on or before June 30 in the year
that the postretirement adjustment is made; or and (b) disability or survivorship allowance. (2) A member or beneficiary is ineligible to receive a postretirement adjustment under subsection (1) unless he has been
receiving a monthly service, disability, or survivorship (b) has been receiving the monthly retirement allowance for at least 24 60 consecutive months on or before June 30 in the
year that the adjustment is made." Section 3. Section 19-20-712, MCA, is amended to read: "19-20-712. Funding for postretirement adjustment -- reserve fund. (1) At the end of each fiscal year, the board shall
determine the total investment income earned minus any unrealized gains or losses on the retirement fund for that fiscal
year. From this amount, the board shall subtract the: (a) actuarial amount required to fund the retirement system for the fiscal year amount equivalent to the actuarially required
investment yield; and (b) retirement system's administrative and investment expenses for the fiscal year. (2) (a) From the remainder obtained in subsection (1), the board shall calculate the amount of investment income earned on
that portion of the retirement fund balance representing retired members. (b) The board shall deposit the amount calculated in subsection (2)(a) in a reserve fund. (3) Subject to the restrictions contained in subsections (4) and (5), the board shall annually use 90% of the amount in the
reserve fund provided for in subsection (2)(b) to pay a postretirement adjustment to eligible members retirees or
beneficiaries under 19-20-713. (4) If the amount in the reserve fund is insufficient to provide an average monthly postretirement adjustment of at least $1
under 19-20-713, an adjustment may not be made in that calendar year. (5) The amount available for payment of the postretirement allowance adjustment under 19-20-713 is limited to an amount
that would provide a percentage increase in the average service, disability, or survivorship allowance of all eligible
members, when combined with the postretirement adjustment, that is equal to or less than the percentage increase for the
previous calendar year in the annual average consumer price index for urban wage earners and workers compiled by the
bureau of labor statistics, United States department of labor, or its successor agency."
Section 2. Section 19-20-713, MCA, is amended to read:
"19-20-713. Payment and amount of postretirement adjustment. (1) Effective January 1
of following each year that
funds are available under 19-20-712 and in each odd-numbered year that funds are available pursuant to [section 1], a
member retiree or beneficiary eligible under 19-20-711 AND [SECTION 1] shall must receive a postretirement adjustment
in the form of a monthly benefit payable for life.
(2) The board shall calculate the amount of the postretirement allowance payable to an eligible
member retiree or
(a) dividing the amount available under 19-20-712(3) and [section 1] for payment of the postretirement allowance by the
total accumulated years of service for all eligible
members retirees and beneficiaries;
(b) multiplying the quotient obtained in subsection (2)(a) by the
member's retiree's total years of service at the time of
(c) dividing the product obtained in subsection (2)(b) by a factor for calculating a monthly
annuity retirement allowance
from actuarial tables adopted by the board; and
(d) applying the provisions contained in subsections (3) and (4).
(3) If a
member retiree had elected to receive an optional retirement allowance, the amount of his the retiree's
postretirement allowance must be adjusted by the appropriate optional factor.
(4) If more than one beneficiary is receiving a
member's retiree's retirement allowance, the postretirement adjustment must
be divided in the same manner as the member's retiree's retirement allowance."
NEW SECTION. Section 3. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 19, chapter 20, part 7, and the provisions of Title 19, chapter 20, part 7, apply to [section 1].
NEW SECTION. Section 4. Effective date. [This act] is effective on passage and approval.
NEW SECTION. SECTION 5. TERMINATION. [THIS ACT] TERMINATES JULY 1, 1998.