BEFORE THE PUBLIC EMPLOYEES' RETIREMENT BOARD

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 2.43.1501, 2.43.2101, 2.43.2104, 2.43.2120, 2.43.2214, 2.43.2303, 2.43.2610, 2.43.2901, 2.43.3008, 2.43.4203, and 2.43.4207 pertaining to the operation of the retirement systems and plans administered by the Montana Public Employees' Retirement Board

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO: All Concerned Persons

 

           1. On November 7, 2013, at 10:00 a.m., the Public Employees' Retirement Board will hold a public hearing in Room 201 of 100 North Park Avenue, at Helena, Montana, to consider the proposed amendment of the above-stated rules.

 

2. The 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 Employee Retirement Administration no later than 5:00 p.m. on October 31, 2013, to advise us of the nature of the accommodation that you need. Please contact Kris Vladic, Public Employee Retirement Administration, P.O. Box 200131, Helena, Montana, 59620-0131; telephone (406) 444-2578; fax (406) 444-5428; TDD (406) 444-1421; or e-mail kvladic@mt.gov.

 

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            2.43.1501 REVIEW OF ADMINISTRATIVE DECISION

            (1) through (3) remain the same.

            (4)  The board will notify the appealing party of its initial decision in writing. If the decision is adverse to the appealing party, the board will include a general statement of the reasons for its decision, which need not be exhaustive.  The appealing party will be given two options, either of which must be exercised within 30 days of the date of written notification:.  The appealing party may submit a request in writing for:

            (a)  any appealing party may submit a request in writing for reconsideration by the board; or

            (b)  an appealing party, other than a governmental entity, may submit a request in writing for a contested case proceeding.

            (5) through (5)(c) remain the same.

            (d)  The board will notify the party in writing of its decision on reconsideration. That decision will become final and will not be subject to a contested case proceeding or judicial review unless a the party other than a governmental entity files a written request for a contested case proceeding within 30 days of the written notice of decision on reconsideration.

            (6) The board's initial decision or decision on reconsideration, if appropriately requested, is final with respect to a party which is a governmental entity, and may not be appealed by that entity.

            (7) through (9) remain the same, but are renumbered (6) through (8).

 

AUTH:  19-2-403, MCA

IMP:     19-2-403, MCA

 

STATEMENT OF REASONABLE NECESSITY: This amendment is needed to remove the limit previously applied to the appeal rights of a governmental entity. Governmental entities have the same appeal rights as an individual under 2-4-102 and 2-4-702, MCA.

 

            2.43.2101  MEMBERSHIP (1)  An eligible employee becomes a member of a retirement system on his or her first day of covered employment under that system.

            (2) If a member changes his or her name, the member must submit a name change form to MPERA.

            (2) through (4) remain the same, but are renumbered (3) through (5).

 

AUTH: 19-2-403, MCA

IMP:     19-2-303, 19-3-1605, 19-7-711, 19-8-1105, MCA

 

STATEMENT OF REASONABLE NECESSITY The amended rule is needed to reflect that the process for reporting a name change now only requires a name change form, rather than a full new membership card with beneficiary designations as previously required by ARM 2.43.2104, amended below.

 

            2.43.2104  MEMBERSHIP CARDS FORM (1)  Each member must complete a membership card form upon employment, name change, or change of beneficiary, and return the card form to their employer.  The card form must be immediately forwarded by the employer to MPERA.  The designation of beneficiary is only effective upon receipt by MPERA.

            (2) remains the same.

            (a)  indicate "temporary" or "dual employment" status on the card form; and

            (b) remains the same.

 

AUTH:  19-2-403, MCA

IMP:     19-2-801, 19-6-505, 19-9-1102, 19-13-903, MCA

 

STATEMENT OF REASONABLE NECESSITY: Application for membership is no longer completed on a card. A membership application form has been developed to collect the information. Amendment of this rule is needed to change the references from card to form for consistency with this change in business practice.

 

Name change was removed from the rule as it is no longer a reason to submit a new membership card/form. As indicated in the proposed amendment to ARM 2.43.2101 above, there is now a specific form for name changes only. 

 

            2.43.2120 REINSTATEMENT – CREDIT FOR LOST TIME  (1) through (4) remain the same.

 

AUTH:  19-2-403, MCA

IMP:     19-2-303(46), MCA

 

STATEMENT OF REASONABLE NECESSITY: The subsection in the implementing statute, 19-2-303, MCA, is removed because it was amended by Chapter 386 of the Montana Session Laws of 2013 and because the subsection number is not necessary to locate the term defined in the underlying statute. 

 

            2.43.2214  IMPLEMENTATION AND COMPLIANCE (1) through (2) remain the same.

            (3)  Board policy number BOARD Admin 03 05 titled "Treating Salary Deferrals Under a Cafeteria Plan as Compensation" contains several examples of both valid and invalid cafeteria plans, elections, and waivers and should be referenced for further guidance.

 

AUTH:  19-2-403, MCA

IMP:     19-2-1001, 19-2-1005, 19-2-1010, 19-3-108, 19-5-101, 19-6-101, 19-7-101, 19-8-101, 19-9-104, 19-13-104, MCA

 

STATEMENT OF REASONABLE NECESSITY: The citation in the rule for the board's administrative policy for treating salary deferral under a cafeteria plan is incorrect. The correct citation is "BOARD Admin 05."

 

            2.43.2303 DOCUMENTATION OF AMOUNT OF SERVICE ELIGIBLE TO BE PURCHASED (1)  When military, U.S. government, federal volunteer, Montana public employment, or other public employment related service is eligible to be purchased into a retirement system, the member is responsible for providing ensuring acceptable documentation is provided to MPERA.

            (2)  The documents submitted by the member must be sufficient to prove to MPERA that the service is eligible to be purchased by the member.

            (a) through (3) remain the same.

 

AUTH:  19-2-403, MCA

IMP:     19-2-715, 19-3-503, 19-3-505, 19-3-510, 19-3-512, 19-3-515, 19-6-801, 19-6-803, 19-7-803, 19-8-901, 19-8-903, 19-9-403, 19-13-403, MCA

 

STATEMENT OF REASONABLE NECESSITY: It is necessary to amend this rule to reflect a business process change from a member completing and returning the application and all supporting documentation for a service purchase to requiring the member's former employer to complete a certification and return it directly to MPERA. This process change was instituted to minimize the risk of fraud and is in keeping with business practice common in other retirement systems.

 

            2.43.2610 DESIGNATION OF BENEFICIARY BY RETIREES, AND ALTERNATE PAYEES, AND CONTINGENT ANNUITANTS (1) A retiree, or alternate payee, or contingent annuitant shall make the selection of beneficiary in writing and on the form provided by MPERA, dated and signed by the individual participant, and witnessed by a disinterested third party.

            (2) remains the same.

 

AUTH: 19-2-403, MCA

IMP:     19-2-801, 19-2-902, 19-2-907, 19-3-1501, 19-5-701, 19-7-1001, 19-8-1105, MCA

 

STATEMENT OF REASONABLE NECESSITY: This rule amendment is needed to clarify that MPERA is not required to collect beneficiaries for contingent annuitants or to pay pro-rated benefits to these parties following the death of a contingent annuitant before the last day of the month under 19-2-902, MCA. Collecting beneficiaries for contingent annuitants creates unnecessary administrative challenges, including spending significant time locating current addresses and social security numbers, often for multiple beneficiaries of a single contingent annuitant. Once located, these beneficiaries are then issued individual payments and forms 1099-R for their fractional share of a frequently small pro-rata payment, which may be more easily, efficiently and inexpensively paid directly to the contingent annuitant's estate and reported on a single form 1099-R.

 

            2.43.2901 REFUNDS TO MEMBERS (1) and (1)(a) remain the same.

            (b) the refund application is completed by both the member and the employer, and forwarded to MPERA by the employer;

            (c) through (2) remain the same.

            (3) An alternative refund form is available from MPERA for the member who has terminated and whose member's account has been inactive for more than three months. Termination will be verified with the employer if not satisfactorily indicated on the refund form.

            (4) remains the same, but is renumbered (3).

 

AUTH:  19-2-403, MCA

IMP:     19-2-303, 19-2-602, 19-5-403, 19-6-403, MCA

 

STATEMENT OF REASONABLE NECESSITY: The application for refund has been modified to accommodate electronic verification of employment. MPERA staff will use the web-reporting system to verify if and when a member has terminated employment.

 

MPERA has discontinued an alternative refund form for members that have terminated employment and whose account has been inactive for more than three months. Refunds for these individuals can be obtained by using the regular refund application.

 

            2.43.3008 FAMILY LAW ORDERS – CONTENTS AND DURATION FOR DEFINED BENEFIT PLANS (1) through (5) remain the same.

            (6)  If MPERA is unable to locate an alternate payee upon the death of the participant, MPERA will use IRS's letter forwarding service in a final attempt to locate.

 

AUTH:  19-2-403, 19-2-907, MCA

IMP:     19-2-907, MCA

 

STATEMENT OF REASONABLE NECESSITY: The IRS discontinued their letter forwarding service August 31, 2012. MPERA staff uses a variety of methods to search for alternate payees including Internet-based searches and obituaries.

 

            2.43.4203 DETENTION OFFICER MEMBERSHIP IN SHERIFFS' RETIREMENT SYSTEM (SRS) (1) through (1)(b) remain the same.

            (c)  completing, within the time allowed by ARM 23.14.526 23.13.206, a detention officers' basic course as provided by the Montana Law Enforcement Academy or equivalent training in a training school meeting the minimum standards of the Board of Crime Control, as required by ARM 23.14.526 23.13.206, pursuant to 44-4-301, MCA.

 

AUTH:  19-2-403, MCA

IMP:     19-7-101, 19-7-301, 19-7-302, MCA

 

STATEMENT OF REASONABLE NECESSITY: The Department of Justice repealed ARM 23.14.526 in 2008. The rule is being corrected to reflect the correct reference to ARM 23.13.206.

 

            2.43.4207 DETENTION CENTER REPORTS FROM SHERIFFS

            (1) through (3)(a) remain the same.

            (b)  whether the employee is acting as a detention officer, and has completed a detention officers' basic course or equivalent training at a training school meeting the minimum standards of the Board of Crime Control or is expected to receive such training within the time allowed by ARM 23.14.526 23.13.206; and

            (c) and (4) remain the same.

 

AUTH:  19-2-403, MCA

IMP:     19-7-101, 19-7-301, 19-7-302, MCA

 

STATEMENT OF REASONABLE NECESSITY: The Department of Justice repealed ARM 23.14.526 in 2008. The rule is being corrected to reflect the correct reference to ARM 23.13.206.

 

           4. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kris Vladic, Montana Public Employee Retirement Administration, P.O. Box 200131, Helena, Montana, 59620-0513; telephone (406) 444-2578; fax (406) 444-5428; or e-mail kvladic@mt.gov, and must be received no later than 5:00 p.m., November 14, 2013.

 

5. Kris Vladic, Montana Public Employee Retirement Administration, has been designated to preside over and conduct this hearing.

 

6. The 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 4 above or may be made by completing a request form at any rules hearing held by the Public Employees' Retirement Board.

 

7. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply

 

9. With regard to the requirements of 2-4-111, MCA, the Public Employees' Retirement Board has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.

 

 

/s/ Melanie A. Symons                               /s/ Scott E. Moore                                       

Melanie A. Symons                                    Scott E. Moore

Chief Legal Counsel                                  President

and Rule Reviewer                                    Public Employees' Retirement Board

           

           

Certified to the Secretary of State October 7, 2013