Read the full stored bill text
- 2025
69th Legislature 2025 SB 56
- 1 - Authorized Print Version – SB 56
ENROLLED BILL
AN ACT REVISING SUPPLEMENTAL EMPLOYER CONTRIBUTIONS TO RETIREMENT SYSTEMS;
EXTENDING AND INCREASING THE SUPPLEMENTAL EMPLOYER CONTRIBUTION RATE FOR THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM; ADDING SUPPLEMENTAL EMPLOYER CONTRIBUTION
RATES FOR THE HIGHWAY PATROL OFFICERS' RETIREMENT SYSTEM, THE SHERIFFS' RETIREMENT
SYSTEM, AND THE GAME WARDENS' AND PEACE OFFICERS' RETIREMENT SYSTEM; AMENDING
SECTIONS 19-3-316, 19-6-404, 19-7-404, AND 19-8-504, MCA; AND PROVIDING AN EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 19-3-316, MCA, is amended to read:
"19-3-316. Employer contribution rates. (1) Each employer shall contribute to the system. Except
as provided in subsection (2), the employer shall pay as employer contributions 6.9% of the compensation paid
to all of the employer's employees plus any additional contribution under subsection (3), except for those
employees properly excluded from membership. Of employer contributions made under this subsection for both
defined benefit plan and defined contribution plan members, a portion must be allocated for educational
programs as provided in 19-3-112. Employer contributions for members under the defined contribution plan
must be allocated as provided in 19-3-2117.
(2) Local government and school district employer contributions must be the total employer
contribution rate provided in subsection (1) minus the state contribution rates under 19-3-319.
(3) (a) Subject to subsection (4), each employer shall contribute to the system an additional
employer contribution equal to the percentage specified in subsection (3)(b) of the compensation paid to all of
the employer's employees, except for those employees properly excluded from membership.
(b) The percentage of compensation to be contributed under subsection (3)(a) is 1.27% for fiscal
year 2014 and increases by 0.1% each fiscal year through fiscal year 2024 fiscal year 2035. For fiscal years
- 2025
69th Legislature 2025 SB 56
- 2 - Authorized Print Version – SB 56
ENROLLED BILL
beginning after June 30, 2024, June 30, 2035, the percentage of compensation to be contributed under
subsection (3)(a) is 2.27% 3.27%.
(4) (a) The board shall annually review annually the additional employer contribution provided for
under subsection (3) and recommend adjustments to the legislature as needed to maintain the amortization
schedule set by the board for payment of the system's unfunded liabilities.
(b) The employer contribution required under subsection (3) terminates on January 1 July 1
following the board's receipt of the system's actuarial valuation if the actuarial valuation determines that
terminating the additional employer contribution pursuant to this subsection (4)(b) and reducing the employee
contribution pursuant to 19-3-315(2) would not cause the amortization period to exceed 25 years."
Section 2. Section 19-6-404, MCA, is amended to read:
"19-6-404. State employer contribution -- definitions. (1) (a) From July 1, 2023, through June 30,
2024, the state shall pay as employer contributions 38.33% of compensation paid to all of the employer's
employees, except those properly excluded from membership.
(b) Beginning July 1, 2023, and each fiscal year thereafter, the state treasurer shall transfer
$500,000 from the state special revenue fund provided for in 17-2-102 to the highway patrol officers' retirement
pension trust fund by August 15. This transfer must terminate when the public employees' retirement board's
actuary determines that the funded ratio for the highway patrol officers' pension system is 100% funded.
(2) (a) Beginning July 1, 2024, the state shall pay as employer contributions an actuarially
determined employer contribution that is determined annually by the public employees' retirement board's
actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year.
(b) The actuarially determined employer contribution must be the sum of the following contribution
rates minus the employee contribution provided for in 19-6-402:
(i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
(ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
liability; and
- 2025
69th Legislature 2025 SB 56
- 3 - Authorized Print Version – SB 56
ENROLLED BILL
(iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
as they accrue.
(c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
July 1, 2023.
(ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
amortization period.
(d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
the fiscal year ending June 30, 2024.
(e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
annual actuarial valuation as the benefits accrue for each of the employer's employees.
(3) (a) Subject to subsection (4), the state shall contribute to the system an additional employer
contribution equal to the percentage specified in subsection (3)(b) of the compensation paid to all of the
employer's employees, except for those properly excluded from membership.
(b) The percentage of compensation to be contributed under subsection (3)(a) is 0.1% for fiscal
year 2026 and increases by 0.1% each fiscal year through fiscal year 2035. For fiscal years beginning after
June 30, 2035, the percentage of compensation to be contributed under subsection (3)(a) is 1%.
(4) (a) The board shall review annually the additional employer contribution provided for under
subsection (3) and recommend adjustments to the legislature as needed to maintain the amortization schedule
set by the board for payment of the system's unfunded liabilities.
(b) The employer contribution required under subsection (3) terminates on July 1 following the
board's receipt of the system's actuarial valuation if the actuarial valuation determines that terminating the
- 2025
69th Legislature 2025 SB 56
- 4 - Authorized Print Version – SB 56
ENROLLED BILL
additional employer contribution pursuant to this subsection (4)(b) would not cause the amortization period to
exceed 25 years.
(3)(5) For the purposes of this section, the following definitions apply:
(a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
(b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
Section 3. Section 19-7-404, MCA, is amended to read:
"19-7-404. Employer contributions -- definitions. (1) From July 1, 2023, through June 30, 2024,
each employer shall pay 13.115% of the compensation paid to all of the employer's employees.
(2) (a) Beginning July 1, 2024, each employer shall pay as employer contributions an actuarially
determined employer contribution that is determined annually by the public employees' retirement board's
actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year.
(b) The actuarially determined employer contribution must be the sum of the following contribution
rates minus the employee contribution provided for in 19-7-403:
(i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
(ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
liability; and
(iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
as they accrue.
(c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
July 1, 2023.
(ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
- 2025
69th Legislature 2025 SB 56
- 5 - Authorized Print Version – SB 56
ENROLLED BILL
amortization period.
(d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
the fiscal year ending June 30, 2024.
(e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
annual actuarial valuation as the benefits accrue for each of the employer's employees.
(3) (a) If the required contributions under subsections (1) and (2) exceed the funds available to a
county from general revenue sources, a county may, subject to 15-10-420, budget, levy, and collect annually a
tax on the taxable value of all taxable property within the county that is sufficient to raise the amount of revenue
needed to meet the county's obligation.
(b) (i) A county may impose a mill levy to fund the employer contribution required under
subsections (1) and (2). The mill levy is not subject to 15-10-420(1) or to approval at an election under 15-10-
425.
(ii) Each year prior to implementing a levy under subsection (3)(b)(i), after notice of the hearing
given under 7-1-2121, a public hearing must be held regarding any proposed increase.
(iii) If a levy pursuant to this subsection (3)(b) is decreased or ceases to be levied, the revenue
may not be combined with the revenue determined in 15-10-420(1)(a).
(4) (a) Subject to subsection (5), each employer shall contribute to the system an additional
employer contribution equal to the percentage specified in subsection (4)(b) of the compensation paid to all of
the employer's employees, except for those members properly excluded from membership.
(b) The percentage of compensation to be contributed under subsection (4)(a) is 0.1% for fiscal
year 2026 and increases by 0.1% each fiscal year through fiscal year 2035. For fiscal years beginning after
June 30, 2035, the percentage of compensation to be contributed under subsection (4)(a) is 1%.
(5) (a) The board shall review annually the additional employer contribution provided for under
subsection (4) and recommend adjustments to the legislature as needed to maintain the amortization schedule
- 2025
69th Legislature 2025 SB 56
- 6 - Authorized Print Version – SB 56
ENROLLED BILL
set by the board for payment of the system's unfunded liabilities.
(b) The employer contribution required under subsection (4) terminates on July 1 following the
board's receipt of the system's actuarial valuation if the actuarial valuation determines that terminating the
additional employer contribution pursuant to this subsection (5)(b) and reducing the member contributions
pursuant to 19-7-403(1)(b) would not cause the amortization period to exceed 25 years.
(4)(6) For the purposes of this section, the following definitions apply:
(a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
(b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
Section 4. Section 19-8-504, MCA, is amended to read:
"19-8-504. Employer's contribution -- definitions. (1) From July 1, 2023, through June 30, 2024,
the employer shall pay as employer contributions 10.56% of the compensation paid to all of the employer's
employees, except those properly excluded from membership.
(2) (a) Beginning July 1, 2024, each employer shall pay as employer contributions an actuarially
determined employer contribution that is determined annually by the public employees' retirement board's
actuary in accordance with the provisions of this section and part of the plan's annual actuarial valuation. This
actuarially determined employer contribution is effective July 1 following the annual actuarial valuation
completed in the prior calendar year with a maximum annual increase of no more than 0.5% in any year.
(b) The actuarially determined employer contribution must be the sum of the following contribution
rates minus the employee contribution provided in 19-8-502:
(i) the contribution rate determined under subsection (2)(c) to pay off the legacy unfunded liability;
(ii) the contribution rate determined under subsection (2)(d) to pay for the contemporary unfunded
liability; and
(iii) the contribution rate determined under subsection (2)(e) to pay for the normal cost of benefits
as they accrue.
(c) (i) Except as provided in subsection (2)(c)(ii), the contribution rate under subsection (2)(b)(i) for
the legacy unfunded liability must be the amount required on a level percent basis to amortize the legacy
- 2025
69th Legislature 2025 SB 56
- 7 - Authorized Print Version – SB 56
ENROLLED BILL
unfunded liability attributable to the employer's employees over a closed 25-year amortization period beginning
July 1, 2023.
(ii) If the June 30, 2023, actuarial valuation determines the system's amortization period is less
than 25 years, then the closed amortization period used for the purposes of subsection (2)(c)(i) must be that
amortization period.
(d) The contribution rate under subsection (2)(b)(ii) for the contemporary unfunded liability must be
the amount required on a level percent basis to pay the annual contemporary unfunded liabilities attributable to
the employer's employees over a layered amortization schedule so that each fiscal year's contemporary
unfunded liability is amortized over a closed 10-year period, starting with the contemporary unfunded liability for
the fiscal year ending June 30, 2024.
(e) The contribution rate under subsection (2)(b)(iii) for the normal cost of benefits as they accrue
must be the amount required on a level percent basis to pay the normal cost of benefits as determined in the
annual actuarial valuation as the benefits accrue for each of the employer's employees.
(3) (a) Subject to subsection (4), each employer shall contribute to the system an additional
employer contribution equal to the percentage specified in subsection (3)(b) of the compensation paid to all of
the employer's employees, except for those employees properly excluded from membership.
(b) The percentage of compensation to be contributed under subsection (3)(a) is 0.1% for fiscal
year 2026 and increases by 0.1% each fiscal year through fiscal year 2035. For fiscal years beginning after
June 30, 2035, the percentage of contribution to be contributed under subsection (3)(a) is 1%.
(4) (a) The board shall review annually the additional employer contribution provided for under
subsection (3) and recommend adjustments to the legislature as needed to maintain the amortization schedule
set by the board for payment of the system's unfunded liabilities.
(b) The employer contribution required under subsection (3) terminates on July 1 following the
board's receipt of the system's actuarial valuation if the actuarial valuation determines that terminating the
additional employer contribution pursuant to this subsection (4)(b) would not cause the amortization period to
exceed 25 years.
(3)(5) For the purposes of this section, the following definitions apply:
(a) "Contemporary unfunded liability" means the plan's annual fiscal year actuarial gains and
- 2025
69th Legislature 2025 SB 56
- 8 - Authorized Print Version – SB 56
ENROLLED BILL
losses smoothed over 5 years starting with the fiscal year ending June 30, 2019.
(b) "Legacy unfunded liability" means the unfunded liability of the plan as of June 30, 2023."
Section 5. Effective date. [This act] is effective July 1, 2025.
- END -
I hereby certify that the within bill,
SB 56, originated in the Senate.
___________________________________________
Secretary of the Senate
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
SENATE BILL NO. 56
INTRODUCED BY M. CUFFE
BY REQUEST OF THE STATE ADMINISTRATION AND VETERANS' AFFAIRS INTERIM COMMITTEE
AN ACT REVISING SUPPLEMENTAL EMPLOYER CONTRIBUTIONS TO RETIREMENT SYSTEMS;
EXTENDING AND INCREASING THE SUPPLEMENTAL EMPLOYER CONTRIBUTION RATE FOR THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM; ADDING SUPPLEMENTAL EMPLOYER CONTRIBUTION
RATES FOR THE HIGHWAY PATROL OFFICERS' RETIREMENT SYSTEM, THE SHERIFFS' RETIREMENT
SYSTEM, AND THE GAME WARDENS' AND PEACE OFFICERS' RETIREMENT SYSTEM; AMENDING
SECTIONS 19-3-316, 19-6-404, 19-7-404, AND 19-8-504, MCA; AND PROVIDING AN EFFECTIVE DATE.