House Bill No. 565

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act reestablishing the retirement incentive program by making the program available to members of the public employees' retirement system who are eligible on February 1, 1997; establishing a window of eligibility for members who voluntarily or involuntarily terminate employment during that timeframe; making participation in the program optional for local public employers; allowing employers to pay costs in installments; allowing the public employees' retirement board to adopt rules; limiting the hours persons may work for the same jurisdiction after having retired under the incentive program; PROVIDING A TERMINATION INCENTIVE TO CERTAIN STATE EMPLOYEES IN THE TEACHERS' RETIREMENT SYSTEM WHO ARE ELIGIBLE TO RETIRE AND WHO TERMINATE EMPLOYMENT WITHIN A PRESCRIBED WINDOW OF ELIGIBILITY; amending section

19-3-908, MCA; and providing an immediate effective date and a termination date."

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 19-3-908, MCA, is amended to read:

"19-3-908.   Retirement incentive program -- window of eligibility. (1) Except as provided in subsection (4)(3), a person who is an active member on February 1, 1993 1997, and who voluntarily terminates service or whose service is involuntarily terminated because of a reduction in force on or after June 25, 1993 1997, but before January 1, 1994 1998, and who is eligible for a normal service retirement under 19-3-901 or early retirement under 19-3-902 is entitled to the retirement incentive provided in subsection (2).

(2)  (a) The employer of an eligible member under subsection (1) shall pay the total cost of purchasing up to 3 years of additional service that the member is qualified to purchase under 19-3-513.

(b)  The department of revenue shall pay the cost of purchasing up to 3 years of additional service for qualifying county assessors and deputy assessors eligible under subsection (1) whose employing county has not elected for participation in the incentive program as provided in subsection (4).

(c)  A member is entitled to a refund for that portion of previously purchased additional service that would otherwise cause the member to be unqualified to receive all or part of the additional service provided in this section.

(3)  An active member who is involuntarily terminated because of a reduction in force on or after March 1, 1993, but before June 25, 1993, and who, if the member had not been terminated, would have been eligible under subsection (1) for the retirement incentive is entitled to the retirement incentive under subsection (2) if the member was, at the time of termination, eligible for normal service retirement under 19-3-901 or early retirement under 19-3-902 and retires on or after June 25, 1993.

(4)  Subject to subsection (2)(b), a A contracting employer's participation in the incentive program described in this section is optional. A contracting employer may elect to provide the incentive by filing with the board a written notice of election on or before June 1, 1993 1997, and complying with rules adopted pursuant to subsection (6) (4).

(5)  County assessors and deputy assessors are eligible for the incentive program even if the employing county has not elected to participate in the incentive program.

(6)(4)  The board may allow an employer to pay the contributions required under subsection (2)(a) in installments for up to 10 years and may charge interest at a rate set by the board pursuant to 19-2-403. The board shall adopt rules to implement the provisions of this section.

(7)(5)  A member who has received additional service under this section and who returns to employment for the same jurisdiction for 600 or more hours in a calendar year shall forfeit the additional service. The employer's contributions to purchase that member's additional service, minus any retirement benefits already paid, must be refunded to the employer. For purposes of this subsection, all agencies of the state, including the university system, are considered the same jurisdiction and other public employers contracting with the retirement system are each considered separate jurisdictions."

NEW SECTION. Section 2.  Termination incentives for teachers' retirement system members -- exceptions. (1) Except as provided in subsection (5), a person who is a full-time, active member of the teachers' retirement system on February 1, 1997, and who is employed by the state is entitled to the voluntary termination incentive provided in subsection (2) if:

(a) the employee is eligible for retirement under 19-20-801 or 19-20-802; and

(b) the employee:

(i) voluntarily terminates on or after June 25, 1997, but on or before July 5, 1998; or

(ii) is involuntarily terminated because of a reduction in force on or after [the effective date of this act] but before June 25, 1997.

(2) The termination incentive paid to a terminating eligible employee must be an amount equal to 1 year of the combined member and employer contributions established in 19-20-602 and 19-20-605 for each 5 years of creditable service within the teachers' retirement system, not to exceed the amount of combined contributions for 3 years. An employer shall use the employee's final year contract or salary to calculate the incentive amount.

(3) A member who terminates employment under the provisions of subsection (1) and who returns to employment in a position in the teachers' retirement system, except as provided in 19-20-804, shall refund the voluntary termination incentive to the terminating state agency.

(4) To qualify for the termination incentive authorized in this section, the participant shall notify the state in writing of an intent to terminate employment no later than 30 days prior to termination or December 31, 1997, whichever is earlier.

(5) An employee of the university system or of the commissioner of higher education is excluded from [section 3] and this section.

NEW SECTION.  Section 3. Use of termination incentive -- installment payments authorized. (1) If the eligible employee elects to use the termination incentive paid under [section 2], in whole or in part, to enhance retirement benefits, the employer contributions to the teachers' retirement system required under 19-20-101(5)(d) are included in the total amount of termination incentive paid to the employee.

(2) The provisions of this section apply only to a termination incentive and do not relieve an employer from making any contributions defined in 19-20-101(5)(d).

(3) The termination incentive may be paid, upon request of the employee, in 12 equal installments as long as the final installment payment occurs on or before June 30, 1999.

NEW SECTION. Section 4.  Codification instruction. [Sections 2 and 3] are intended to be codified as an integral part of Title 2, chapter 18, part 3, and the provisions of Title 2, chapter 18, part 3, apply to [sections 2 and 3].

NEW SECTION. Section 5.  Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].

NEW SECTION. Section 6.  Effective date. [This act] is effective on passage and approval.

NEW SECTION. Section 7.  Termination. [This act] terminates July 6, 1998.