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Pension Update: Week 4

Posted Date: 
February 1, 2013
Sheryl Wood, Associate Director, Montana Association of Counties

As everyone knows, the Montana Public Employee Retirement Systems (PERS) have significant unfunded liabilities.  Out of the eight public retirement systems, our counties have employees in PERS:  Defined Benefit Plan (PERS) and the Sheriff’s and Peace Officers Retirement System (SRS). FYI – 95% of the members of SRS are county employees. (While some counties have employees who have selected to participate in PERS – Define Contribution Plan, that is a separate system that is not involved in these discussions.) 

So what are the numbers, and how do they affect Montana Counties?

PERB-Administered Retirement Systems

Actuarial Valuation Results

June 30, 2012

($ in millions)





$ 5,661.2








Est. % of County portion of UAL



Est. $ of County portion of UAL



Funded Ratio



County Por



Statutory Contribution Rate



NC Rate



Available for Amortization



Years to Amortize

Does Not Amortize

Does Not Amortize





AAL (Actuarial Accrued Liability): The cost of the future benefit payments for current members and retirees.

AVA (Actuarial Value of Assets): Market value of assets smoothed (averaged) over 4 years.  This helps to flatten out short-term market volatility.

UAL (Unfunded Actuarial Liability): The excess, if any, of the Actuarial Liability over Actuarial Value of Assets.

Funded Ratio: The ratio of the Actuarial Liabilities to the Actuarial Value of Assets.

NC (Normal Cost): The average cost of membership (an actuary's best guess about what currently accruing benefits will cost when they are paid in the future)


So what is being done to address the issue?  As of this writing, there have been 27 bills introduced regarding the pension systems, and there are 30 draft requests awaiting bill drafting.  Note:  Not all will be drafted, as some are just “placeholder” titles.

Introduced Bill Status

Pending Bill Drafts Status

3 Tabled Bills

5 Passed on to Other House

10 Pending Committee Action

2 Scheduled for Hearing

7 Pending Scheduling for Hearing

3 Canceled/Died in Process

7 Drafted and in Review Before Introduction

20 Placeholders – Drafts Pending


The survey results are in!  A big thank you to the 42 counties that responded!  The survey results can be reviewed by clicking here.

The survey results were presented to the Joint Select Committee on Pensions during the hearing on HB 95 on Thursday, January 31.

MACo supported the bill based on the results of the survey but did clarify that counties are not hiring working retirees in place of budgeted FTE’s, based on the information provided that 36 out of the 42 counties answered “NO” to this question.

As there were no opponents, the Committee took Executive Action on the bill right after the hearing, and it passed unanimously.  It will be scheduled for 2nd reading on the floor early next week.

Sheryl Wood | (406) 449-4360 |