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Bill

LC 565

Change the pension amortization time to 15 years in 19-3-315 (2)MCA

2025 Regular Session

Montana bill would shorten public pension liability repayment deadline to 15 years, increasing employer contribution requirements but addressing unfunded liabilities faster.

(LC) Draft Died in Process
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Bill Summary · LC 565

Legislative bill overview

LC 565 would modify Montana Code Annotated 19-3-315(2) to change the pension amortization period from its current timeframe to 15 years. Pension amortization refers to how long a public pension system has to pay off its unfunded liabilities (the gap between promised benefits and available funds). This bill died in the legislative process without being formally introduced.

Why is this important

Shorter amortization periods require larger annual pension contributions from employers (typically state and local governments), increasing budget pressure on public entities. Conversely, longer periods reduce near-term costs but defer financial obligations to future taxpayers and potentially increase total interest costs. This change directly affects how Montana public employers fund their pension obligations.

Potential points of contention

  • Budget impact: Shortening amortization to 15 years would significantly increase annual required contributions for state and local employers, potentially straining municipal and state budgets
  • Intergenerational equity: Shorter amortization addresses unfunded liabilities faster but places heavier burdens on current taxpayers and government services funding
  • Market assumptions: Pension funding depends partly on investment return assumptions; a 15-year timeline may be more conservative but less flexible if market conditions change

Compiled from official sources — confirm details with the bill’s official record.

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