Supplemental employer contribution for PERS, HPORS, SRS, GWPORS
SB 56 revises Montana’s supplemental employer contribution structure for several public retirement systems. It extends and increases the supplemental employer contribution rate for the Public Employees’ Retirement System (PERS), and it adds new supplemental employer contribution rates for the Highway Patrol Officers’ Retirement System (HPORS), the Sheriffs’ Retirement System (SRS), and the Game Wardens’ and Peace Officers’ Retirement System (GWPORS). The bill also updates the statutory contribution formulas for these systems so that employer payments are tied to actuarial determinations intended to cover legacy unfunded liabilities, contemporary unfunded liabilities, and normal cost as benefits accrue.
For PERS, the bill raises the supplemental employer contribution from the prior scheduled path to 3.27% beginning after June 30, 2035, with annual increases through that date. For HPORS, SRS, and GWPORS, it establishes new supplemental employer contributions that begin at 0.1% in fiscal year 2026 and rise by 0.1% each year through fiscal year 2035, reaching 1% thereafter. The bill also preserves annual actuarial review by the retirement board and allows the supplemental contributions to terminate if actuarial valuations show that doing so would not extend amortization periods beyond 25 years. The act takes effect July 1, 2025.
The bill’s impact is to increase and extend employer funding obligations across Montana’s state and local retirement systems, affecting state agencies, counties, school districts, and other public employers that participate in these plans. It amends sections of the Montana Code Annotated governing PERS, HPORS, SRS, and GWPORS, and it reinforces a funding framework that uses actuarial valuations and amortization schedules to address unfunded liabilities over time. For counties, the bill continues to recognize that if required contributions exceed available general revenue, a county may levy a property tax to meet its retirement contribution obligations.
Overall sentiment appears generally supportive but not unanimous. The bill advanced through both chambers with clear majority support, including strong final passage votes in the House and Senate, indicating broad legislative agreement on the need to shore up retirement system funding. At the same time, the narrower committee votes and floor opposition show that some lawmakers were concerned about the cost and the long-term growth of employer contribution rates.
The main point of contention is fiscal burden: the bill shifts more retirement-system costs onto employers, which can mean higher state expenditures and, for local governments, greater pressure on budgets and potentially on property taxpayers. Supporters likely viewed the measure as necessary to maintain actuarial soundness and protect retirement benefits, while opponents likely objected to the size, timing, or automatic escalation of the supplemental contributions. The bill’s phased-in increases and termination provisions appear designed to balance funding needs with concerns about over-collection if the systems improve.
SB 56 amends Montana law governing employer contributions to four public retirement systems: PERS, HPORS, SRS, and GWPORS. It increases the long-term supplemental employer contribution rate for PERS and creates new supplemental employer contribution schedules for the other three systems, while also tying the base employer contribution formulas more explicitly to actuarial valuations, legacy unfunded liabilities, contemporary unfunded liabilities, and normal cost. The bill affects state agencies, counties, school districts, and other public employers participating in these systems, and it preserves the ability of counties to levy property taxes if general revenue is insufficient to meet required retirement contributions.
The bill appears to have received generally favorable treatment in the Legislature, passing committee and floor votes in both chambers by solid margins. The vote history suggests broad recognition that the retirement systems need additional funding support, but the presence of meaningful opposition in some Senate and House floor votes indicates that the bill was not universally embraced. The overall tone is pragmatic and fiscally focused rather than ideological, with support centered on actuarial stability and opposition centered on cost.
The central controversy is the cost of the supplemental employer contributions and who ultimately bears that cost. Critics likely worried that the bill increases obligations for state and local employers, potentially leading to higher taxes or budget cuts, especially for counties and school districts. Supporters likely argued that the increases are necessary to address unfunded liabilities and keep the retirement systems on a sustainable amortization path. A secondary point of contention is the bill’s automatic annual increases and long-term escalation schedule, though the termination provisions based on actuarial review were likely included to address concerns about overfunding.