BEFORE THE PUBLIC EMPLOYEES' RETIREMENT BOARD
OF THE STATE OF MONTANA
In the matter of the adoption of New Rule I, pertaining to the redirection of certain PERS employer contributions from the defined benefit trust fund for the purposes of paying off the plan choice rate unfunded actuarial liability to defined contribution member accounts
NOTICE OF ADOPTION
TO: All Concerned Persons
1. On December 24, 2015, the Public Employees' Retirement Board published MAR Notice No. 2-43-536 pertaining to the proposed adoption of the above-stated rule at page 2179 of the 2015 Montana Administrative Register, Issue Number 24.
2. The Public Employees' Retirement Board has adopted the above-stated rule as proposed: New Rule I (2.43.3533).
3. The Public Employees' Retirement Board has thoroughly considered the comments and testimony received. A summary of the comments received and the board's responses are as follows:
COMMENT 1: One commenter asked for explanation of what MAR means.
RESPONSE 1: The Montana Administrative Register (also known as the MAR or Register) is a twice-monthly publication by the Secretary of State. It has three sections. The Notice Section contains state agencies' notices of proposed new, amended, or repealed rules; the rationale for the new, amended, or repealed rules; the date and location of public hearings, if any, on the proposals; the deadline for comments and where written comments may be submitted by the public. The Rule Section contains final rule notices which show any amendments to the rules as originally proposed. All rule actions are effective the day after publication of the rule adoption notice unless otherwise specified in the final rule notice. The Interpretation Section contains the Attorney General's opinions and state declaratory rulings. In addition, Special Notices and Tables are found at the end of each Register.
COMMENT 2: A public member asked whether those people who chose the defined benefit plan will have their employer contributions taken from them to pay for the poor planning or management of the defined contribution member accounts.
RESPONSE 2: The employer contributions directed to the plan choice rate (PCR) are contributions paid by the employer on behalf of the employer's employees who have chosen to participate in the PERS Defined Contribution Retirement Plan (DCRP). They are not and never have been contributions paid by the employer on behalf of the employees participating in the PERS Defined Benefit Retirement Plan (DBRP). Rather, the PCR contributions were directed to the unfunded actuarial liability created within the DBRP itself when the DCRP was enacted. Once that unfunded liability is paid off, the employer's contributions will be redirected to the employer's employees who participate in the DCRP. The employer contributions currently paid into the DBRP are not impacted.
COMMENT 3: One commenter asked how this rule will affect former PERS employees and how it would affect their retirement from the state of Montana.
RESPONSE 3: Former PERS-covered employees are not impacted by this rule. If the employee is a member of the PERS DBRP, the employee's retirement benefit, if any, will remain the same. If the employee is a participant in the DCRP, the member's DCRP account will not be impacted unless and until the participant returns to PERS-covered employment. If the former employee has taken a refund of their PERS account or retired, there is no impact.
/s/ Melanie A. Symons /s/ Sheena Wilson
Melanie A. Symons Sheena Wilson
Chief Legal Counsel President
Rule Reviewer Public Employees' Retirement Board
Certified to the Secretary of State February 8, 2016