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Montana Administrative Register Notice 2-43-482 No. 12   06/20/2013    
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 BEFORE THE MONTANA Public employees' retirement board

 OF THE STATE OF MONTANA 

 

In the matter of the adoption of Temporary Emergency Rule I and the temporary emergency amendment of ARM 2.43.2114 regarding increased PERS employer contributions paid on behalf of University employees who elect to participate in the Optional Retirement Program rather than in the Public Employees' Retirement System 

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NOTICE OF ADOPTION OF A TEMPORARY EMERGENCY RULE AND TEMPORARY EMERGENCY AMENDMENT OF A CURRENT RULE

 

            TO: All Concerned Persons

 

1. The Montana Public Employees' Retirement Board is adopting the following emergency rule and amending ARM 2.43.2114 because Chapter 390, Laws of 2013, does not indicate where the additional PERS employer contributions provided for in section 4 of Chapter 390, Laws of 2013 and paid to University employees who elect to participate in the University Systems' Optional Retirement Program are to be allocated. The additional employer contributions commence on July 1, 2013, prior to the time in which the necessary rule could be adopted through the regular rulemaking process.

 

2. The Montana Public Employees' Retirement Board will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Montana Public Employees' Retirement Administration no later than 5:00 p.m. on July 1, 2013, to advise us of the nature of the accommodation that you need. Please contact Kris Vladic, Montana Public Employees' Retirement Administration, P.O. Box 200131, Helena, Montana, 59620-0131; telephone (406) 444-2578; fax (406) 444-5428; TDD/Montana Relay Service/etc. (406) 444-1421; or e-mail kvladic@mt.gov.

 

3. The temporary emergency rules will be effective July 1, 2013.

 

4. The text of the temporary emergency rule provides as follows:

 

            RULE I ALLOCATION OF ADDITIONAL EMPLOYER CONTRIBUTIONS ON BEHALF OF MONTANA UNIVERSITY SYSTEM EMPLOYEES IN THE OPTIONAL RETIREMENT PROGRAM (1)  The additional employer contributions provided for in 19-3-316(3), MCA that are paid on behalf of MUS employees in the optional retirement program will be allocated as follows:

            (a) The 1.00% additional employer contribution will be directed to the PERS defined benefit plan trust fund.

            (b) The 0.27% additional employer contribution is already allocated to the PERS defined benefit retirement plan's plan choice rate pursuant to 19-21-214(2)(b), MCA.

            (c) The 0.1% additional employer contribution that commences July 1, 2014, will be directed to the PERS defined benefit plan trust fund unless the board determines pursuant to 19-3-2121, MCA that an increase in the plan choice rate is required to actuarially fund the PERS defined contribution retirement plan's share of the PERS defined benefit's plan unfunded liability. In that event, the 0.1% additional employer contribution will be directed to the PERS defined contribution retirement plan's plan choice rate.

 

AUTH: 19-2-403, 19-3-2104, MCA

IMP:     19-3-2104, MCA

 

STATEMENT OF REASONABLE NECESSITY: Section 6, Chapter 390, Laws of 2013 amends 19-3-2117, MCA to allocate the additional employer contributions paid on behalf of PERS defined contribution retirement plan members. Unfortunately, there is no allocation for MUS employees in PERS-covered positions who elect to participate in the Optional Retirement Program (ORP) rather than either the PERS defined benefit retirement plan or the PERS defined contribution retirement plan. Section 19-21-214, MCA instructs the Board regarding payment of employer contributions to the ORP. That statute is silent regarding the additional employer contributions provided for in Section 4, Chapter 390, Laws of 2013. However, 19-21-214(3), MCA provides that employer contribution allocations are subject to adjustment by the Board provided the adjustments are consistent with 19-3-2121, MCA.

 

Section 19-3-2121, MCA allows the Board to use employer contributions to increase the plan choice rate contribution under certain circumstances. If those circumstances are met, the Board has determined it to be appropriate to allocate the 0.1% increase to the plan choice rate. If the circumstances are not met, the 0.1% increase will go to help the defined benefit retirement plan's unfunded liability.

 

The Board will ask the 2015 Legislature to amend 19-21-214, MCA to address the allocation of the additional employer contributions on behalf of MUS employees in PERS-covered positions who elect to participate in the ORP. The Board will propose to the 2015 Legislature that the allocation mirror that in 19-3-2117, MCA for PERS Defined Contribution Retirement Plan members.

 

5. The text of the temporary amendment of an existing rule provides as follows:

 

2.43.2114 REQUIRED EMPLOYER REPORTS (1) through (5) remain the same.

            (a) Commencing July 1, 2013, MUS shall transmit to MPERA the 1.0% additional employer contribution provided for in Chapter 390, Laws of 2013.

            (b) Commencing July 1, 2014, MUS shall also transmit to MPERA the 0.1% additional employer contribution provided for in Chapter 390, Laws of 2013.

            (6) remains the same.

 

AUTH: 19-2-403, MCA

IMP:       Section 4, Chapter 390, Laws of 2013, 19-20-506, 19-3-315, 19-3-316, 19-3-412, 19-3-1106, 19-3-2117, 19-7-1101, MCA

 

STATEMENT OF REASONABLE NECESSITY: Section 19-21-214, MCA allocates the current 0.27% additional employer contribution to the PERS defined benefit plan to eliminate the plan choice rate unfunded actuarial liability. However, Chapter 390, Laws of 2013 does not address the allocation of the additional employer contributions paid by MUS on behalf of employees in covered PERS positions who elect to participate in the ORP. Therefore, this amendment is necessary to ensure that MUS transmits the new additional employer contributions to MPERA for proper accounting.

 

6. A standard rulemaking procedure will be undertaken prior to the expiration of this temporary emergency rule.

 

7. Concerned persons are encouraged to submit their comments during the upcoming standard rulemaking process. If concerned persons wish to be personally notified of that rulemaking process, they should submit their names and addresses to Roxanne Minnehan at the address above.

 

8. The Montana Public Employees' Retirement Board maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 2 above or may be made by completing a request form at any rules hearing held by the Montana Public Employees' Retirement Board.

 

9. The bill sponsor notice requirements of 2-4-302, MCA, apply and have been fulfilled.

 

 

/s/ Melanie Symons                                    /s/ Scott Moore                                            

Melanie Symons, Legal Counsel             Scott Moore

and Rule Reviewer                                     President

                                                                      Public Employees' Retirement Board

 

Certified to the Secretary of State June 10, 2013

 

 

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