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LC 18

Providing that the default retirement plan for legislators is the defined contribution plan through PERS

2025 Regular Session

Montana bill shifts legislators' default retirement from guaranteed pension (defined benefit) to market-dependent accounts (defined contribution) through PERS.

(LC) Draft Delivered to Requester
#legislature #retirement(seealso:seniorcitizens)
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Bill Summary · LC 18

Legislative bill overview

LC 18 would change Montana legislators' default retirement plan from a defined benefit plan to a defined contribution plan through the Public Employees Retirement System (PERS). This shifts retirement security from a guaranteed pension based on salary and service years to a portable account balance dependent on contributions and investment performance.

Why is this important

This change affects the retirement security of state legislators and has budgetary implications for the state's long-term pension liabilities. Defined contribution plans place investment risk on individual employees rather than the state, potentially reducing taxpayer obligations but creating uncertainty for legislators' retirement income.

Potential points of contention

  • Retirement security trade-off: Defined benefit plans guarantee income; defined contribution plans depend on market performance and individual investment choices, creating variable retirement outcomes
  • Cost-shifting: Reduces the state's long-term pension liability but shifts financial risk to legislators, who may argue this diminishes compensation for public service
  • Equity concerns: May affect legislators differently based on career length, investment knowledge, and market conditions at retirement; career legislators accustomed to defined benefits face changes mid-service

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

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