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69th Legislature 2025 SB 122.1
- 1 - Authorized Print Version – SB 122
1 SENATE BILL NO. 122
2 INTRODUCED BY F. MANDEVILLE
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING THE ACTUARIALLY DETERMINED EMPLOYER
5 CONTRIBUTION RATE FOR THE HIGHWAY PATROL OFFICERS' RETIREMENT SYSTEM, THE SHERIFFS'
6 RETIREMENT SYSTEM, AND THE GAME WARDENS' AND PEACE OFFICERS' RETIREMENT SYSTEM;
7 ADDING A MINIMUM RATE FOR THE ACTUARIALLY DETERMINED EMPLOYER CONTRIBUTION RATE;
8 ADDING A MAXIMUM ANNUAL DECREASE TO THE ACTUARIALLY DETERMINED EMPLOYER
9 CONTRIBUTION RATE; AMENDING SECTIONS 19-6-404, 19-7-404, AND 19-8-504, MCA; AND PROVIDING
10 AN EFFECTIVE DATE.”
11
12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
13
14Section 1. Section 19-6-404, MCA, is amended to read:
15 "19-6-404. State employer contribution -- definitions. (1) (a) From July 1, 2023, through June 30,
16 2024, the state shall pay as employer contributions 38.33% of compensation paid to all of the employer's
17 employees, except those properly excluded from membership.
18 (b) Beginning July 1, 2023, and each fiscal year thereafter, the state treasurer shall transfer
19 $500,000 from the state special revenue fund provided for in 17-2-102 to the highway patrol officers' retirement
20 pension trust fund by August 15. This transfer must terminate when the public employees' retirement board's
21 actuary determines that the funded ratio for the highway patrol officers' pension system is 100% funded.
22 (2) (a) Beginning July 1, 2024, the state shall pay as employer contributions an actuarially
23 determined employer contribution that is determined annually by the public employees' retirement board's
24 actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
25 actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
26 completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year and a
27 maximum annual decrease of no more than 0.5% in any year. The employer contribution rate may not be set
28 lower than 38.33%.
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69th Legislature 2025 SB 122.1
- 2 - Authorized Print Version – SB 122
1 (b) The actuarially determined employer contribution must be the sum of the following contribution
2 rates minus the employee contribution provided for in 19-6-402:
3 (i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
4 (ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
5 liability; and
6 (iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
7 as they accrue.
8 (c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
9 the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
10 unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
11 July 1, 2023.
12 (ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
13 than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
14 amortization period.
15 (d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
16 the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
17 the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
18 unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
19 the fiscal year ending June 30, 2024.
20 (e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
21 must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
22 annual actuarial valuation as the benefits accrue for each of the employer's employees.
23 (3) For the purposes of this section, the following definitions apply:
24 (a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
25 losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
26 (b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
27
28Section 2. Section 19-7-404, MCA, is amended to read:
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69th Legislature 2025 SB 122.1
- 3 - Authorized Print Version – SB 122
1 "19-7-404. Employer contributions -- definitions. (1) From July 1, 2023, through June 30, 2024,
2 each employer shall pay 13.115% of the compensation paid to all of the employer's employees.
3 (2) (a) Beginning July 1, 2024, each employer shall pay as employer contributions an actuarially
4 determined employer contribution that is determined annually by the public employees' retirement board's
5 actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
6 actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
7 completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year and a
8 maximum annual decrease of no more than 0.5% in any year. The employer contribution rate may not be set
9 lower than 13.115%.
10 (b) The actuarially determined employer contribution must be the sum of the following contribution
11 rates minus the employee contribution provided for in 19-7-403:
12 (i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
13 (ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
14 liability; and
15 (iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
16 as they accrue.
17 (c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
18 the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
19 unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
20 July 1, 2023.
21 (ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
22 than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
23 amortization period.
24 (d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
25 the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
26 the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
27 unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
28 the fiscal year ending June 30, 2024.
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69th Legislature 2025 SB 122.1
- 4 - Authorized Print Version – SB 122
1 (e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
2 must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
3 annual actuarial valuation as the benefits accrue for each of the employer's employees.
4 (3) (a) If the required contributions under subsections (1) and (2) exceed the funds available to a
5 county from general revenue sources, a county may, subject to 15-10-420, budget, levy, and collect annually a
6 tax on the taxable value of all taxable property within the county that is sufficient to raise the amount of revenue
7 needed to meet the county's obligation.
8 (b) (i) A county may impose a mill levy to fund the employer contribution required under
9 subsections (1) and (2). The mill levy is not subject to 15-10-420(1) or to approval at an election under 15-10-
10 425.
11 (ii) Each year prior to implementing a levy under subsection (3)(b)(i), after notice of the hearing
12 given under 7-1-2121, a public hearing must be held regarding any proposed increase.
13 (iii) If a levy pursuant to this subsection (3)(b) is decreased or ceases to be levied, the revenue
14 may not be combined with the revenue determined in 15-10-420(1)(a).
15 (4) For the purposes of this section, the following definitions apply:
16 (a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
17 losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
18 (b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
19
20Section 3. Section 19-8-504, MCA, is amended to read:
21 "19-8-504. Employer's contribution -- definitions. (1) From July 1, 2023, through June 30, 2024,
22 the employer shall pay as employer contributions 10.56% of the compensation paid to all of the employer's
23 employees, except those properly excluded from membership.
24 (2) (a) Beginning July 1, 2024, each employer shall pay as employer contributions an actuarially
25 determined employer contribution that is determined annually by the public employees' retirement board's
26 actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
27 actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
28 completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year and a
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69th Legislature 2025 SB 122.1
- 5 - Authorized Print Version – SB 122
1 maximum annual decrease of no more than 0.5% in any year. The employer contribution rate may not be set
2 lower than 10.56%.
3 (b) The actuarially determined employer contribution must be the sum of the following contribution
4 rates minus the employee contribution provided in 19-8-502:
5 (i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
6 (ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
7 liability; and
8 (iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
9 as they accrue.
10 (c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
11 the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
12 unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
13 July 1, 2023.
14 (ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
15 than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
16 amortization period.
17 (d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
18 the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
19 the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
20 unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
21 the fiscal year ending June 30, 2024.
22 (e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
23 must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
24 annual actuarial valuation as the benefits accrue for each of the employer's employees.
25 (3) For the purposes of this section, the following definitions apply:
26 (a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
27 losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
28 (b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
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69th Legislature 2025 SB 122.1
- 6 - Authorized Print Version – SB 122
1
2 NEW SECTION. Section 4. Effective date. [This act] is effective July 1, 2025.
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