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Sponsor seeks $65 million one-time payment to fully fund Montana Highway Patrol pension
Summary
House Bill 370 would provide a $65 million one-time statutory appropriation to eliminate unfunded liabilities in the Highway Patrol Retirement System; retirement officials and trooper representatives supported the payment as a recruitment and retention tool.
Representative Greg Kametz told the House State Administration Committee that House Bill 370 would direct a one-time statutory appropriation of $65 million from the general fund to the Highway Patrol Officers' pension trust to pay off unfunded liabilities.
Kametz said Montana's budget surplus creates an opportunity to reduce retirement liabilities and that the Highway Patrol pension was identified by retirement officials as the most challenged fund. "If you would like to leave session knowing that you have actually had a part in paying just one bill off," Kametz said, he proposed the appropriation to eliminate the system's unfunded liability.
William Hollahan, executive director of the Public Employees Retirement Administration, testified in support and described the system's liabilities, active-to-retiree ratio and actuarial condition. He told the committee the fund holds roughly $226 million in assets and has unfunded liabilities of about $65.3 million; the system's amortization period is 24 years under current policy. Hollahan said the system's demographic profile — relatively few active members and a larger retiree population — makes it vulnerable to investment volatility and that paying the unfunded liability would restore the system's funded status immediately.
Representatives of the Highway Patrol Officers Association and the state's policy research director for MFPE also supported the bill, saying a fully funded pension helps recruit and retain officers. Committee members asked questions about contribution rates and whether a one-time appropriation could lead to future policy changes; both the director and the sponsor said the bill would not change employer or employee contribution rates and that it does not contemplate converting the plan to a defined-contribution structure.
Proponents emphasized that the system is not insolvent but faces long-term demographic pressures; Hollahan said retirees account for a large share of the system's liabilities. The committee did not take an immediate final vote on HB 370 during this session's hearing.
