Montana Senate Bill SB25

Montana 2023 Regular Session

• Introduced: 12/5/22
• Refer: 12/28/22

Caption

Increase MUS-RP Supplemental Contribution to TRS

Impact

The increased contribution rate, set at 13.53%, reflects a gradual rise in the employers' financial obligations aimed at addressing past service liabilities within the state’s retirement framework. This measure is positioned as essential for ensuring the long-term solvency and sustainability of the retirement fund, which is critical for the financial security of public employees within the education sector. The bill, if enacted, would establish a more robust financial structure for the state's retirement systems, thus benefiting both current employees and retirees relying on these funds.

Summary

Senate Bill 25 (SB25) proposes an increase in the supplemental employer contribution rate required from employers within the Montana University System to the Teachers' Retirement System (TRS). Specifically, the bill amends Section 19-20-621 of the Montana Code Annotated to establish that each employer must contribute a percentage of total compensation for all employees participating in the university system retirement program. As outlined in the legislation, this contribution must be sufficient to amortize the past service liability of the TRS for university system members by July 1, 2033.

Contention

While the bill appears to have straightforward intentions for addressing funding deficiencies, there may be underlying concerns regarding the financial impact on the university system’s budgets. Critics may argue that increasing employer contributions could divert funds from other essential services or programs within the university systems, potentially leading to budgetary constraints. Furthermore, the long-term implications of these increased contributions may affect hiring practices, salary structures, and the overall competitiveness of the university environment in retaining skilled educators.