Signed by Governor Steve Bullock

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that appropriates funds for and amends the teachers' retirement system, effective July 1, 2013.

Highlights:

• Specifies the normal contribution rate for each “tier 1 member” is 7.15 percent of the member’s earned compensation and 8.15 percent for each “tier 2 member” (Sec. 5).

• Defines “tier 1 member,” as an individual who became a member of the annuity savings account before July 1, 2013 and who has not withdrawn the member’s account balance (Sec. 1). 

• Defines “tier 2 member,” as an individual who became a member of the annuity savings account on or after July 1, 2013, or who, after withdrawing the member’s account balance, became a member again after July 1, 2013 (Sec. 1).

• Appropriates $25 million from the general fund to the pension trust fund as a supplemental contribution to the teachers’ retirement system beginning July, 1, 2013 and on each July 1 thereafter (Sec. 9).

• Specifies that on January 1 of each year, based on the most recent actuarial valuation of the retirement system, the retirement allowance payable to each  member is to be increased by the amount provided in the following situations (Sec. 11):
• An increase of 0.5 percent for tier 1 members if the retirement system liabilities are less than 90 percent funded; or
• An increase greater than 0.5 percent but no more than 1.5 percent for all members if the retirement system liabilities are at least 90 percent funded and the provision of the increase is not projected to cause the system’s liabilities to be less than 85 percent funded.

• Specifies that average final compensation is calculated by taking the following averages of earned compensation paid to members (Sec 16):
• A tier 1 member in 3 consecutive years of full-time service that yields the highest average; and
• A tier 2 member in 5 consecutive years of full-time service that yields the highest average.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that appropriates funds and increases contributions for the Teachers' Retirement System.

Highlights:

• Specifies the normal contribution rate for each “tier 1 member” is 7.15 percent of the member’s earned compensation and 8.15 percent for each “tier 2 member” (Sec. 5).

• Defines “tier 1 member,” as an individual who became a member of the annuity savings account before July 1, 2013 and who has not withdrawn the member’s account balance (Sec. 1). 

• Defines “tier 2 member,” as an individual who became a member of the annuity savings account on or after July 1, 2013, or who, after withdrawing the member’s account balance, became a member again after July 1, 2013 (Sec. 1).

• Appropriates $25 million from the general fund to the pension trust fund as a supplemental contribution to the teachers’ retirement system beginning July, 1, 2013 and on each July 1 thereafter (Sec. 9).

• Specifies that on January 1 of each year, based on the most recent actuarial valuation of the retirement system, the retirement allowance payable to each  member is to be increased by the amount provided in the following situations (Sec. 11):
• An increase of 0.5 percent for tier 1 members if the retirement system liabilities are less than 90 percent funded; or
• An increase greater than 0.5 percent but no more than 1.5 percent for all members if the retirement system liabilities are at least 90 percent funded and the provision of the increase is not projected to cause the system’s liabilities to be less than 85 percent funded.

• Specifies that average final compensation is calculated by taking the following averages of earned compensation paid to members (Sec 16):
• A tier 1 member in 3 consecutive years of full-time service that yields the highest average; and
• A tier 2 member in 5 consecutive years of full-time service that yields the highest average.

Full Bill Text