Montana Code 19-3-316. Employer contribution rates
19-3-316. Employer contribution rates. (1) Each employer shall contribute to the system. Except as provided in subsection (2), the employer shall pay as employer contributions 6.9% of the compensation paid to all of the employer’s employees plus any additional contribution under subsection (3), except for those employees properly excluded from membership. Of employer contributions made under this subsection for both defined benefit plan and defined contribution plan members, a portion must be allocated for educational programs as provided in 19-3-112. Employer contributions for members under the defined contribution plan must be allocated as provided in 19-3-2117.
Terms Used In Montana Code 19-3-316
- Amortization: Paying off a loan by regular installments.
- Compensation: means remuneration paid out of funds controlled by an employer in payment for the member's services or for time during which the member is excused from work because of a holiday or because the member has taken compensatory leave, sick leave, annual leave, banked holiday time, or a leave of absence before any pretax deductions allowed by state or federal law are made. See Montana Code 19-3-108
- Defined benefit plan: means the plan within the public employees' retirement system established in 19-3-103 that is not the defined contribution plan. See Montana Code 19-3-108
- Employer: means the state of Montana, its university system or any of the colleges, schools, components, or units of the university system for the purposes of this chapter, or any contracting employer. See Montana Code 19-3-108
- Employer contributions: means payments to a pension trust fund pursuant to 19-3-316 from appropriations of the state of Montana and from contracting employers. See Montana Code 19-3-108
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)Local government and school district employer contributions must be the total employer contribution rate provided in subsection (1) minus the state contribution rates under 19-3-319.
(3)(a) Subject to subsection (4), each employer shall contribute to the system an additional employer contribution equal to the percentage specified in subsection (3)(b) of the compensation paid to all of the employer’s employees, except for those employees properly excluded from membership.
(b)The percentage of compensation to be contributed under subsection (3)(a) is 1.27% for fiscal year 2014 and increases by 0.1% each fiscal year through fiscal year 2024. For fiscal years beginning after June 30, 2024, the percentage of compensation to be contributed under subsection (3)(a) is 2.27%.
(4)(a) The board shall annually review the additional employer contribution provided for under subsection (3) and recommend adjustments to the legislature as needed to maintain the amortization schedule set by the board for payment of the system’s unfunded liabilities.
(b)The employer contribution required under subsection (3) terminates on January 1 following the board’s receipt of the system’s actuarial valuation if the actuarial valuation determines that terminating the additional employer contribution pursuant to this subsection (4)(b) and reducing the employee contribution pursuant to 19-3-315(2) would not cause the amortization period to exceed 25 years.