Montana

Overview

Montana has two state retirement systems that account for nearly all employees of the state and its political subdivisions. The Montana Teachers’ Retirement System (TRS) provides retirement and other benefits to teachers, administrators, and other skilled public education employees. General employees of schools and school districts participate in the Public Employees Retirement System.

The Montana Public Employees’ Retirement Administration (PERA) board oversees nine separate retirement plans, one Other Employee Benefit plan (457(b)), and one Other Post Employment Benefit (OPEB) plan, as follows:

• Public Employees' Retirement System - Defined Benefit Retirement Plan
• Judges' Retirement System
• Highway Patrol Officers' Retirement System
• Sheriffs' Retirement System
• Game Wardens' and Peace Officers' Retirement System
• Municipal Police Officers' Retirement System
• Firefighters' Unified Retirement System
• Volunteer Firefighters' Compensation Act
• Public Employees' Retirement System-Defined Contribution Retirement Plan
• Deferred Compensation (457(b)) Plan
• Public Employees' Retirement System - DCRP Disability OPEB

The Montana Board of Investments is responsible for managing assets of the MT PERA and MT TRS.

In addition to two state retirement systems, local governments in the state sponsor more than 90 small firefighter retirement plans.

Plan Design

Most employees of state and local government in Montana participate in a traditional defined benefit plan. All new hires by PERA employers since 2003 may elect to participate in an optional defined contribution plan in lieu of the traditional defined benefit plan. As of FY 23, approximately 10 percent of PERA participants are in the DC plan.

According to the US Government Accountability Office, 95 percent of employees of state and local government in Montana participate in Social Security.

Access plan design detail

Authorizing Statutes and Board Structure

Montana Code § 2-15-1009 establishes the PERA board.

Montana Code § 2-15-1010 establishes the TRB board.

Montana Code §2-15-1808 establishes the Board of Investments, which operates as part of the state Department of Commerce.

Montana Code Title 19 provides for retirement system provisions and operations in the state.

Fiduciary Duty/Prudence Standard

Montana Code §17-6-201 describes the investment standard of care for the Board of Investment, as follows:
Unified investment program -- general provisions. (1) The unified investment program directed by Article VIII, section 13, of the Montana constitution to be provided for public funds must be administered by the board of investments in accordance with the prudent expert principle, which requires an investment manager to:

(a) discharge the duties with the care, skill, prudence, and diligence, under the circumstances then prevailing, that a prudent person acting in a like capacity with the same resources and familiar with like matters exercises in the conduct of an enterprise of a like character with like aims;

(b) diversify the holdings of each fund within the unified investment program to minimize the risk of loss and to maximize the rate of return unless, under the circumstances, it is clearly prudent not to do so; and

(c) discharge the duties solely in the interest of and for the benefit of the funds forming the unified investment program.
 

Legal Protections of Retirement Benefits

No explicit constitutional protection for public pension benefits, but courts provide protection based on impairment of contract principles, protected by Article 2, §31 of the Montana Constitution. Baumgardner v. Public Employees' Retirement Bd. of State, 119 P.3d 77 (Mont. 2005) (statute that changed the method for calculating retirement benefits was unconstitutional impairment); Gulbrandson v. Carey, 901 P.2d 573 (Mont. 1995) (recognizing that terms of pension contract are determined by the statutes in effect at the time of retirement). (MT CONST., Article 2, §31) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits
 

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More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)