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Committee hears plan to incrementally raise employer contributions for multiple public-employee retirement systems
Summary
Senate Bill 56 would add a 0.1 percentage-point employer contribution each year for 10 years to reduce amortization periods across several retirement systems. Proponents argued the incremental plan improves actuarial soundness; committee received broad support from unions, retired-employee groups and municipal representatives.
HELENA — The House State Administration Committee heard testimony March 17 on Senate Bill 56, a proposal to incrementally raise employer contribution rates for multiple Montana public-employee retirement systems.
Senate Bill 56, presented to the committee as the product of the interim State Administration and Veterans' Affairs committee, would impose a 0.1 percentage-point increase in employer contributions each year for 10 years. William Hollahan, executive director of the Montana Public Employee Retirement Administration, testified that the phased increases would reduce amortization periods in actuarial valuations: under the fiscal note as presented, PERS’ amortization would drop from 27 to 26 years, the Highway Patrol system from 24 to 21, the sheriff system from 24 to 18 and the game warden system from 24 to 12.
Hollahan told the committee the increase would “bring up the employer contribution rate by a full percentage point” over the 10-year period and that the change would contribute to constitutional and actuarial soundness for the affected systems.
Representatives of affected employee groups and retirees urged support. Jesse Luther, on behalf of the Association of Montana Troopers, said the change would help preserve retirement security for troopers and aid recruitment. Brian Thompson of the Association of Montana Retired Public Employees said the measure is “good policy to keep the pension system stable.” Kim Popham of the Montana Federation of Public Employees said a solid pension can affect recruiting and retention for law enforcement.
Director-level witnesses explained budget implications. The committee review included a discussion of the fiscal note, which distributes costs across the general fund and other employer buckets (for example, county costs for the sheriff retirement system). Committee members asked about interactions with other legislation; Hollahan and staff said the fiscal note reflects interactions with other bills under consideration, including a reference to a bill (discussed in the hearing as House Bill 85) that would restore statutory rates.
Witnesses representing the Montana League of Cities and Towns acknowledged the measure and said cities and towns support the bill while urging legislators to remember local property tax implications when considering tax-relief proposals.
No opponents appeared at the hearing. Senators and witnesses framed the bill as a continuation of earlier policy begun in 2013 that used a small phased employer contribution to reduce unfunded liability; witnesses said that earlier supplemental increase sunset and Senate Bill 56 would reinstate a similar, stepped approach.
No committee vote was recorded during the hearing; the sponsor closed by reiterating the importance of protecting promised retirement benefits and the practical need to preserve recruiting and retention for public employees.
