Law-enforcement groups and pension administrators urge repeal of layered amortization policy; bill would restore employer rates and statutory appropriations

Representative Marta Bertoglio opened the hearing on House Bill 85, which would repeal the modified layered amortization funding policy enacted in last session's House Bill 569 and restore employer contribution rates for three law-enforcement retirement systems: the Highway Patrol, Sheriffs, and the Game Warden and Peace Officers retirement systems.

The Public Employees' Retirement Administration (MPERA) executive director William Hollahan testified the layered amortization policy created funding shortfalls because the law places a 0.5% cap on annual increases to employer contribution rates but does not create a floor on how low rates can fall. Hollahan presented a table (provided as a committee handout) showing the systems would have actuarial shortfalls under the layered policy: he cited an approximate $763,000 actuarial loss in the Highway Patrol fund over the next three years and about $212,000 for the Game Warden fund in fiscal year 2027 if the layered policy remains in place. Hollahan said the $94 million one-time infusion of general-fund dollars last session was effectively neutralized for these systems by the change in employer contribution methodology.

Board of Investments executive director Dan Villa told the committee restoring the employer contribution baseline would preserve the value of the $94 million infusion and help the funds remain actuarially sound. Colonel Kurt Sager, Montana Highway Patrol, said a financially sound retirement system is critical to recruitment and retention; he described recent vacancy levels (about 53 vacancies in a force of ~260 uniformed officers in December) and said ongoing budget shortfalls have affected equipment purchases and training resources.

Will Self, chief of staff to the attorney general, repeated the point that the layered amortization policy left systems vulnerable by reducing employer rates too quickly; proponents said repeal would reduce amortization periods (MPERA testimony said highway patrol amortization would shorten by two years, sheriffs by four, game wardens by ten) and would reinstate statutory appropriations of roughly $4 million each biennium to the Department of Justice for employer contributions.

Several labor and law-enforcement organizations testified in support, including the Montana Police Protective Association, Montana Federation of Public Employees, Montana AFL-CIO, and the Montana Sheriffs and Peace Officers Association. The judiciary noted it was working with the sponsor on an amendment to remove the judicial retirement fund from the bill because its fund is solvent.

Ending: The sponsor asked the committee to support the bill to restore funding stability and help recruitment and retention in law enforcement; a final committee vote was not recorded in the provided hearing transcript.