(C) Daily Montanan This story was originally published by Daily Montanan and is unaltered. . . . . . . . . . . Law enforcement organizations requesting changes to retirement structure – Daily Montanan [1] ['Nicole Girten', 'More From Author', '- November'] Date: 2023-11-14 Law enforcement organizations are asking the state to look at potentially altering the retirement pension system for state troopers and sheriffs after changes were made during the last legislative session to make them more variable. The legislation was intended to keep politics out of retirement funds, but with no protections in place for how much employer contributions can decrease from year to year, organizations like the Montana Sheriffs and Peace Officers Association are requesting the state place minimum on employer contributions to retirement funds. The 2023 Legislature made contributions to law enforcements’ retirement vary year-to-year based on an actuary assessment, as opposed to being set by the legislature. The new measure capped annual employer contribution increases at 0.5%. However, the bill didn’t put side rails on contribution decreases, which bill sponsor Rep. Terry Moore, R-Billings, told the Daily Montanan was an oversight that will be corrected in the next session. The state reported to the legislature last week there were largely healthy accounts for state employees’ retirement funds, but due to an unintended consequence of recent legislation and an expected dip in funds, law enforcement accounts may be more impacted by a drop in contributions. Brian Thompson with the Sheriffs and Peace Officers Association said since the law was implemented in July, there was an increase in employer contributions from a rate of 9.5% of employee compensation to just more than 13%, but the forecast had compensation decreasing to 12%. “What I can potentially see happening is a loss of investments,” Thompson said. Jessie Luther with the Association of Montana Troopers echoed Thompson’s concern, saying after an increase this year, troopers will see a 4% drop in their retirement system balance in 2025. “It would take eight years to get back up to what it is now in statute,” she said. Luther said back in 2013, Highway Patrol employees voluntarily increased the employee contribution by 4% to 13%. “And I don’t think that it’s necessarily truly fair in a situation where only the employer contribution decreases, and the employee contribution never decreases,” she said. “But that’s probably an argument for another day.” She agreed an employer contribution floor could be a possible solution. Luther told the Daily Montanan Tuesday the dip in contributions is anticipated to start next summer with the new fiscal year, and is predicted because it’s part of a “smoothing over process” meant to protect accounts from big spikes or decreases. She said there will be a dip in contributions next fiscal year to make up for “fairly substantial” losses in previous years. She said Highway Patrol is going to see a $5 million loss, and would have to make that amount up, with an additional 7% to break even, which she said is unlikely given the current market. The legislation that brought about the changes in law enforcement retirements, House Bill 569, sponsored by Moore, also brought a windfall of one-time funds for the retirement fund, with Highway Patrol officers getting $27.6 million, sheriffs getting $26.8 million, and game warden and peace officers getting $41.2 million. Moore said the bill was intended to remove employer contributions from the political arena, so that rates would not be decided by the legislature every two years, rather have them “on auto-pilot.” “It causes it to be a political conversation,” Moore said of the legislature setting rates. “It doesn’t need to be political. We just need to pay off our liabilities.” Moore said municipalities were in favor of a last-minute amendment to the legislation adding the 0.5% annual employer contribution cap, but said nothing was done to ensure contributions didn’t fall past a certain amount, something he said would be considered next session. Eric Burke with the Montana Federation of Public Employees said the state should largely be proud of the retirement system in place, but recognized sheriffs will be impacted differently and also recommended a floor for employer contributions, or step back from the new system and return to the legislature setting the employer contribution. “We’re at 25 years, we can let the system continue like the other systems in the program,” he said. [END] --- [1] Url: https://dailymontanan.com/2023/11/14/law-enforcement-organizations-requesting-changes-to-retirement-structure/ Published and (C) by Daily Montanan Content appears here under this condition or license: Creative Commons CC BY-NC-ND 4.0. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/montanan/