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Committee hears SB 56, a 10-year, incremental employer contribution increase to shore up public pensions
Summary
Senate Bill 56 would add 0.1 percentage point to employer retirement contributions each year for 10 years across four systems (PERS, Highway Patrol, Sheriffs, Game Wardens), aiming to reduce amortization periods and improve actuarial soundness; public-employer and law-enforcement groups supported the bill.
Senator Cupp opened a House State Administration hearing on Senate Bill 56, describing the measure as a modest, 10-year employer contribution increase intended to reduce unfunded liabilities in several public-employee retirement systems.
"This is a 1 tenth of a percent increase over 10 years of the employer's contribution," the sponsor said, summarizing the bill's core mechanism.
William Hollahan, executive director of the Montana Public Employee Retirement Administration, testified that the proposal would add 0.1% employer contributions annually for the next decade for four systems (Public Employees' Retirement System, Highway Patrol Officer Retirement System, Sheriff's Retirement System and Game Warden Retirement System). Hollahan cited fiscal-note projections showing reduced amortization periods — for example, PERS from 27 to 26 years and the Game Warden system dropping from 24 to 12 years — under actuarial assumptions included in the fiscal note.
"These additional contributions would allow the PERS system to reduce its amortization period from 27 to 26 years," Hollahan said, and urged the committee to pass the bill.
Supporters included law-enforcement and retiree associations and labor groups, who said the change would help recruitment, retention and retirement security. Representative Byrne questioned the interaction between SB 56 and other legislation (for example, prior bills that restore statutory rates), and Hollahan said the fiscal note accounts for related bills, including adjustments to statutory versus variable rates.
Representative Lee asked how fiscal costs would be allocated; Hollahan said costs vary by system and employer type and pointed the committee to the fiscal note, which projects roughly $1.5 million in general-fund costs in fiscal 2026 and additional county costs depending on the system.
Senator Cupp closed by framing the bill as a continuation of a previous decade-long policy that was allowed to sunset and as an incremental approach to improving pension funding. The committee closed the hearing on SB 56.
