Senate Bill No. 328
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act increasing the minimum retirement benefit provision for certain retirees in the municipal police officers' retirement system; increasing state contributions from the insurance premium tax; amending sections 19-9-702 and 19-9-1007, MCA; and providing an effective date."
WHEREAS, the effects of inflation have reduced the value of the current postretirement benefit adjustment provided for retired police officers in section 19-9-1007, MCA; and
WHEREAS, police officers retiring at the rank of sergeant or above, by virtue of attaining a higher rate of pay when employed, have become accustomed to and plan to retire at a higher standard of living than a basic patrol officer yet are required to wait many years longer than a retiring patrol officer for retirement benefits to fall to a level equal to one-half of the pay of a newly confirmed patrol officer before receiving a postretirement increase; and
WHEREAS, the legislature intends that by granting an increased retirement benefit to police officers who retire at the rank of sergeant or above, more police officers will be encouraged to achieve at least the rank of sergeant and to use their acquired skills for the benefit of their respective communities; and
WHEREAS, there are insufficient funds for the state to provide all or a portion of a postretirement benefit adjustment for ranks above and below the rank of sergeant.
Be it enacted by the Legislature of the State of Montana:
Section 1. 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% 33.55% of compensation paid to
Section 2. Section 19-9-1007, MCA, is amended to read:
"19-9-1007. Supplement to certain benefits. (1) The benefits paid in each fiscal year to a retired member or the member's survivors may not be less than:
(a) one-half of the compensation that will be paid in the current fiscal year in the appropriate city or town to newly confirmed police officers for officers retiring at the rank of patrol officer; or
(b) one-half of the compensation that will be paid in the current fiscal year in the appropriate city or town to a sergeant receiving the base salary of a sergeant for officers retiring at the rank of sergeant or above.
(2) On or before October 1 of each year, the division shall make a report including the following information:
(a) the names of all retired members who are receiving benefits from the retirement system as of the date of the report;
(b) the names of all surviving spouses or dependent children who are receiving benefits from the retirement system because of the death of an active or retired member of this or a prior plan;
(c) for the purpose of determining the base retirement, disability, or survivorship benefits for the computations set forth in subsection (3), the following information relating to the base fiscal year commencing July 1, 1976:
(i) the amount of the benefits paid in the base fiscal year to each retired member described in subsection (2)(a);
(ii) the amount of the benefits paid in the base fiscal year to each surviving spouse or dependent child described in subsection (2)(b);
(iii) upon the death after the base fiscal year of any retired member who was receiving benefits, the amount of benefits that would have been paid to an eligible surviving spouse of the retired member if the surviving spouse had been receiving benefits in the base fiscal year;
(d) the original amount of retirement, disability, or survivorship benefits paid to retired members or their eligible survivors as of the original retirement dates after July 1, 1975;
(e) the compensation that will be paid during the current fiscal year to:
(i) a newly confirmed police officer of each city or town participating in the retirement system; and
(ii) a sergeant receiving the base salary of a sergeant in each city or town participating in the retirement system.
(3) The division shall compute the difference between each amount reported under subsections (2)(c) through (2)(e) and one-half the compensation to be paid during the current fiscal year to a newly confirmed police officer of the appropriate city or town. The division shall also compute the difference between each amount reported under subsections (2)(c), (2)(d), and (2)(e)(ii), and one-half the compensation to be paid during the current fiscal year to a sergeant receiving the base salary of a sergeant in the appropriate city or town. The difference must be reported to the state auditor who shall pay the difference to the pension trust fund out of the premium tax collected on insurance sold in this state to insure against the risks enumerated in 19-18-512(3) no later than November 1. If the compensation of a newly confirmed police officer or the base salary for a sergeant has not been set for the current fiscal year in time to be included in the October 1 report to the state auditor, the division shall make any retroactive adjustments necessary to individual supplemental benefits after the current compensation has been determined and shall include these amounts in the next year's report for reimbursement at that time.
(4) The premium tax amount paid by the state auditor is statutorily appropriated, as provided in 17-7-502, for the payment of supplemental retirement benefits to eligible retired members and their survivors. This payment is in addition to the payment to be made by the state auditor under 19-9-702.
(5) If more than one dependent child is entitled to supplementary benefits under this section by virtue of the death of a common parent, the minimum benefit paid to the dependent children under this section must be determined as if there were one dependent child and the supplementary benefits must be paid to the dependent children collectively."
NEW SECTION. Section 3. Effective date. [This act] is effective July 1, 1997.