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Law‑enforcement groups and retirement boards urge repeal of 'ADEC' layered amortization; bill aims to restore funding
Summary
House Bill 85 would repeal the modified layered amortization (ADEC) imposed by last session’s HB 569 and restore employer contribution rates and a statutory appropriation for several public‑safety retirement systems; witnesses warned of multimillion‑dollar shortfalls and urged passage to preserve recruitment and retention.
Representative Marta Bertoglio introduced House Bill 85 to repeal the modified layered amortization funding policy (ADEC) adopted in the previous session. The repeal targets funding methods put into statute under HB 569 that, proponents say, have created shortfalls in several public‑safety retirement systems including the Highway Patrol Officers Retirement System (HPORS), the Sheriff Retirement System (SRS) and the Game Warden and Peace Officers Retirement System.
William Hollahan, executive director of the Public Employees Retirement Administration Board, testified that a table included with his handout shows shortfalls for HPORS, the game warden system and SRS when comparing the capped employer rates under ADEC to actuarially determined rates. Hollahan told the committee that, "for the highway patrol system, we're anticipating a shortfall for the next 3 years" and estimated an actuarial loss of "about a $765,000" for that system over the relevant period. He said restoring contribution rates and reinstituting a statutory appropriation would improve amortization periods for the systems and reduce long‑term liabilities.
Dan Villa, executive director of the Board of Investments, and Colonel Kurt Sager of the Montana Highway Patrol described operational impacts, with Sager saying the shortfall had led to a roughly $2,000,000 annual budget gap that affected equipment purchases and staffing. Representatives of the Association of Montana Troopers, Montana Sheriffs and Peace Officers Association, the Montana Police Protective Association and union groups supported repeal and emphasized recruitment and retention risks if pension funding weakened.
Dave McAlpin, court administrator, appeared as an informational witness to note that the judiciary’s budget did not include $2.7 million to backfill contributions if the bill passed and that the budget office was working on possible amendments.
Opponents were not recorded in the transcript excerpt provided; proponents emphasized that the repeal would protect prior one‑time appropriations and restore employer rates to prevent actuarial deterioration. Representative Bertoglio closed by stressing the bill’s purpose: to maintain fiscally sound retirement systems critical to public‑safety hiring and retention.
