As a new GWPORS-covered employee, you were asked to complete a GWPORS Membership/Designation of Beneficiary form to designate your beneficiary(ies) for your GWPORS account.

You can designate any persons, charitable organization, estate, or trust (for the benefit of a living person) you wish as a beneficiary(ies). Beneficiaries are either primary or contingent. Contingent beneficiaries will receive a payment or a benefit only if no primary beneficiary survives you. Designate your beneficiaries on a GWPORS Designation of Beneficiaries form.

Your beneficiary information is important. It is necessary that you keep it current. We recommend you review your beneficiary information annually or following a major life event such as a marriage, divorce, birth of a child or death of a beneficiary. You can update your information by downloading a form and sending it to MPERA either by regular mail or by file transfer.

Your beneficiary information is printed on your Annual Benefit Statement, which is mailed to you every August. Review the statement carefully. If your beneficiary information is outdated, please update it as soon as possible.

Any beneficiary change is not effective until the new form is received in our office.*

NOTE: Advise your beneficiary to contact MPERA for complete details about benefits upon your death.

* If your current designation is subject to a temporary restraining order issued under § 40-4-121, MCA, changes will not be effective.

Member Contributions

All members must contribute part of their gross compensation to GWPORS. Your contribution rate is 10.56%.

Interest: Your GWPORS account earns interest each month. The interest credited to your account will not affect the amount of your monthly retirement benefit. All interest credited is tax-deferred.

Taxation: Contributions paid to GWPORS before July 1985 were taxed. If you have taxed money on account, part of your monthly benefit or refund will not be taxed. Contributions paid to GWPORS after July 1985 are tax-deferred. This means state and federal taxes are not paid until you receive the money as a benefit or refund.

Employer Contributions*

Your employer contributes 10.56% of their total GWPORS-covered payroll to the pension trust fund.

* Employer contributions are not refundable and provide “pooled” funds for retirement, disability and death benefits.

The amount of time you work and contribute to GWPORS affects the amount of your retirement benefit. Your monthly benefit will depend on the number of years you work in a GWPORS-covered position, whether you work full- or part-time, any purchases of service and your highest average compensation.

Membership Service

We use membership service to determine if you are eligible for vesting, retirement, or other GWPORS benefits. You earn one month of membership service for any month you contribute to GWPORS, regardless of the number of hours you worked or the pay you received during that month.

Vesting

You are “vested” after you accumulate five years of membership service. Once vested, you are entitled to any retirement benefits for which you are eligible. If you withdraw your accumulated contributions, you are no longer vested and you will give up your right to any GWPORS benefits.

Service Credit

We use service credit to calculate the amount of your benefit. If you work 160 hours or more in any month, you earn one month of service credit. If you work less than 160 hours, you will receive proportional service credit. For example, if you work 80 hours you earn one-half of a month of service credit. However, if you work at least 2,080 non-overtime hours in a fiscal year and are reported as working less than 160 hours in any months during that year, you will receive one full year of service credit.

Service credit is granted when you are paid, not when it is earned.

Part-time Service

If you work part-time, we will adjust either your service credit or your Highest Average Compensation (HAC) at retirement. We adjust one or the other to prevent a double reduction of your benefit. You will not see the adjustment to your service credit until retirement.

HIGHEST AVERAGE COMPENSATION (HAC) - Means your highest average monthly compensation during a set period, either 36 or 60 consecutive months of membership service and is used in the calculation of your retirement benefit.

• If you were hired before July 1, 2011, your HAC is 36 months.
• If you were hired after July 1, 2011, your HAC is 60 months.

For members hired on or after July 1, 2013, HAC will be capped at 110% on compensation earned during the highest average compensation period.

Wondering how termination pay impacts the calculation of your retirement benefit? Lump-sum payments at termination that are includable as compensation for retirement purposes based on your retirement system, are included in the calculation of your HAC.

HIGHEST AVERAGE COMPENSATION (HAC) - your highest average monthly compensation during 36 consecutive months of membership service is used in the calculation of your retirement benefit.

How Does A Lump Sum Payment Affect Your Retirement Calculation? 

Each system defines compensation slightly differently. If, for example, payout of sick and vacation are considered compensation in your retirement system under Montana law, then those portions of your payout will be included in the calculation of your HAC, by replacing lower compensation months with the same number of higher compensation months based upon your salary at the time of retirement. For members of GWPORS hired:

• before July 1, 2011, your HAC is 36 months.

• after July 1, 2011, your HAC is 60 months.

Contributions you make to a VEBA account at termination are not considered compensation for retirement purposes and will not be included in the calculation of your HAC.

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Example:

In the following example, Wanda has her highest 36 months of compensation from 2010-2012.

2010: 12 months x $1500 per month = $18,000
2011: 12 months x $1800 per month = $21,600
2012: 12 months x $2000 per month = $24,000

$18,000 + $21,600 + $24,000 = $63,600 / 36 = $1,766

Before Payout: HAC = $1,766.

She then received a sick/annual payout of $20,000. If we divide that amount ($20,000) with her normal month’s salary ($2,000), we come up with 10 months at the higher $2,000. MPERA will drop the lowest 10 month’s salary ($1,500) (at the beginning of the 36 month period) and add 10 months at the highest salary ($2,000).

Payout = $20,000; $20,000 divided by $2000 = 10 months;
10 months of $2000 HAC is added
10 months of $1500 HAC is dropped

02 months x $1500 = $3,000
12 months x $1800 = $21,600
12 months x $2000 = $24,000
10 months x $2000 = $20,000

$3,000 + $21,600 + $24,000 + $20,000 = $68,600 / 36 = $1,905

After Payout: HAC = $1,905. When recalculated, Wanda’s HAC is $1,905 ($139 greater than the original HAC).

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Compensation Limit - For a member hired on or after July 1, 2013, the following amounts of excess earnings in the calculation of a member’s highest average compensation are not included:

• for the first year included in the calculation, any compensation that is greater than 110% of the compensation paid to the member in the previous year; and

• for each subsequent year included in the calculation, any compensation that is greater than 110% of the compensation included in the calculation for the previous year.

Service Retirement

To be eligible for a full service retirement in GWPORS, you need to be age 50 with at least 20 years of membership service. This is considered 'normal retirement age' in GWPORS and entitles you to an unreduced, non-forfeitable retirement benefit.

The formula for a monthly service retirement benefit in GWPORS depends on your years of membership service and service credit as explained below:

2.5% x Years of Service Credit x HAC

For members hired before July 1, 2011: Your GWPORS retirement benefit is based on your highest consecutive 36 months of compensation. This does not have to be your last 36 months of employment.

For members hired on or after July 1, 2011: Your GWPORS retirement benefit is based on your highest consecutive 60 months of compensation. This does not have to be your last 60 months of employment.

Early Retirement

If you terminate your GWPORS-covered employment after completing five years of membership service, but before reaching normal retirement age, you may file a written application with MPERA to be paid a retirement benefit when you reach age 55. The benefit will be calculated using the normal service retirement benefit formula:

2.5% x Years of Service Credit x HAC

At retirement, GWPORS offers four benefit payment options. The option you choose determines whether or not the benefit continues to someone else (a contingent annuitant) after your death. If you choose an option to provide income for someone after you die, your monthly retirement benefit will be reduced. The reduction depends upon the option you choose, your age and the age of your named contingent annuitant.

Generally, once you receive and accept your first benefit payment, you cannot change your retirement option, except under specific circumstances as described below.

OPTION 1

Option 1 will provide a monthly benefit for your lifetime only and is the largest monthly amount you can choose. Option 1 is also the basis for calculating all other options. The benefit is computed using the defined benefit formula.

Upon your death, your designated beneficiary will receive any balance left in your account. That balance will be the amount that was available at retirement, minus the total benefits already paid to you. All Option 1 monthly benefit payments end upon your death.

OPTION 2

To calculate a benefit for Option 2, your Option 1 benefit is multiplied by an actuarial factor based on both your age and your contingent annuitant’s age at your retirement. Option 2 provides a monthly benefit to you for your lifetime. When you die, your contingent annuitant will receive the same monthly benefit for the rest of their life, subject to annual benefit increases.

Upon his/her death after receipt of any benefits, your remaining account balance, if any, will revert to the GWPORS trust fund. You may not change your option election or your contingent annuitant except in limited circumstances (see below).

The benefit amount of Option 2 is less than Option 1 because the lifetime value of your benefit is spread over two lives instead of one. According to IRS regulations, if the age difference between you and your nonspouse contingent annuitant is greater than ten years, you may not select Option 2. This limit does not apply to a spouse.

OPTION 3

Option 3 will provide a monthly benefit to you for your lifetime. When you die, your contingent annuitant will receive ½ of that amount for the rest of their life, subject to annual benefit increases. Upon his/her death after receipt of any benefits, your remaining account balance, if any, will revert to the GWPORS trust fund. You may not change your option election or your contingent annuitant except in limited circumstances (see below).

The benefit amount of Option 3 is less than Option 1 because the lifetime value is spread over two lives instead of one. The Option 3 factor is based on both your age and your contingent annuitant’s age at your retirement date. However, because the contingent annuitant receives only ½ of your benefit, your Option 3 benefit would be larger than the Option 2 benefit.

Your Option 3 benefit is calculated by multiplying the Option 1 benefit by an Option 3 factor. The Option 3 factor is based on both your age and your contingent annuitant’s age at your retirement date.

Changing Your Option If You Elected 2 or 3

There are only two circumstances under which you can change your Option 2 or Option 3 payment or contingent annuitant. You may only change if:

• your original contingent annuitant dies; or
• you and your contingent annuitant divorce and there is no Family Law Order in place, giving your contingent annuitant the right to receive part of your benefit.

Under these conditions, if you had selected either Option 2 or 3 when you retired, you may:

• revert to the higher Option 1 retirement benefit that was available at the time of your retirement, plus any guaranteed annual benefit adjustments (GABA) you have received; or
• change your benefit Option and name a new contingent annuitant; or
• keep the same Option and name a new contingent annuitant.

To change your payment option or contingent annuitant, you must designate a new contingent annuitant or payment option in writing, within 18 months of the death of or divorce from the contingent annuitant. Please note your retirement benefit calculation will change if you select a new option or new contingent annuitant, because the calculations are based on your age and your new contingent annuitant’s age at the time of the election.

Contact us to receive an estimate of the new benefit and an application form.

OPTION 4

Option 4 will provide a continuing benefit to one or more contingent annuitants. As with all options, you will receive the monthly benefit for your life. If you die before the end of the “certain” or guaranteed period, your contingent annuitant will receive the benefit for the balance of the guaranteed period. If you name more than one contingent annuitant, they will receive the continuing benefit payment, divided equally, for the remainder of the guaranteed period. Payments to the contingent annuitant(s) will stop when the guaranteed period ends.

This benefit has two alternatives:

• 10-year period certain: You must be age 75 or younger when you retire to be eligible for this benefit. The 10-year period begins on your effective date of retirement. You will receive this benefit for life. If you die before the 10-year period ends, then your contingent annuitant(s) will receive the same benefit for the remainder of the 10-year period.
• 20-year period certain: You must be age 65 or younger when you retire to be eligible for this benefit. The 20-year period begins on your effective date of retirement. You will receive this benefit for life. If you die before the 20-year period ends, then your contingent annuitant(s) will receive the same benefit for the remainder of the 20-year period.

You can change your Option 4 contingent annuitant designation after retirement at will. Contingent annuitant(s) receiving the Option 4 benefit may, in turn, designate their own contingent annuitants.

NOTE: The Option 4 benefit will be calculated using Option 4 factors which are based on your age only.

The following are sample calculations. These calculations are for educational purposes only and do not cover all contingencies.  These sample calculations are for members hired before July 1, 2011.

Service Retirement 

Wanda's Age At Retirement = 54
Service Credit = 26 years
Highest Average Compensation (HAC) = $3,000 per month
Account Balance at Retirement = $69,796
Contingent Annuitant’s Age = 54

Option 1 Formula: 2.5% x Service Credit (years) x HAC

0.025 x 26 x $3,000 = $1,950 per month

Under Payment Option 1, Wanda will receive a monthly benefit of $1,950 plus GABA increases when eligible, for life. Upon her death, monthly payments will cease. If the total benefits paid to Wanda are less than her balance at retirement ($69,796), the balance will be paid in a lump-sum to her designated beneficiary or estate.

Option 2 Formula: Option 1 Amount x Option 2 Factor

$1,950 x 0.8857 = $1727.12 per month

If Wanda elects Option 2, she will receive a monthly benefit of $1727.12, plus GABA increases when eligible, for life. Upon her death, GWPORS will pay Wanda’s contingent annuitant the same amount Wanda was receiving, plus increases when eligible, for life.

Option 3 Formula: Option 1 Amount x Option 3 Factor

$1,950 x 0.9394 = $1,831.83 per month

If Wanda elects Option 3, she will receive monthly a benefit of $1,831.83 plus GABA increases when eligible, for life. Upon her death, GWPORS will pay Wanda’s contingent annuitant one-half of the amount Wanda was receiving, plus increases when eligible, for life.

Option 4 Formulas:
10-Year certain: Option 1 Amount x Option 4 10-year Factor

$1,950 x 0.9979 = $1,945.91 per month

If Wanda chooses the 10-year certain payment option, she will receive monthly payments of $1,945.91 plus GABA increases when eligible, for life. If she dies before the 10-year period ends, then her contingent annuitant(s) will collectively receive the same benefit Wanda was receiving. Those payments will increase annually and will continue until the end of the 10- year period. If Wanda dies after the 10-year period ends, all payments end. Her contingent annuitant(s) will not receive any benefit payments.

20-Year certain: Option 1 Amount x Option 4 20-year Factor

$1,950 x 0.9910 = $1,932.45 per month

If Wanda chooses the 20-year certain payment option, she will receive monthly payments of $1,932.45 plus GABA increases when eligible, for life. If she dies before the 20-year period ends, then her contingent annuitant(s) will collectively receive the same benefit Wanda was receiving. Those payments will increase annually and will continue until the end of the 20-year period. If Wanda dies after the 20-year period ends, all payments end. Her contingent annuitant(s) will not receive any benefit payments.

The 10-year and 20-year periods begin on the effective date of your retirement. Factors used for 10-year or 20-year periods are based only on the retiree’s age.

The Guaranteed Annual Benefit Adjustment (GABA) will increase your retirement benefit every year if you are eligible.

You need to have received your benefit for at least 12 months to become eligible for a GABA increase. You will receive your first increase in your retirement benefit payment that following January. For example: If you retire on July 1, 2022, you will meet the 12-month requirement on July 1, 2023. You will then receive your first GABA increase beginning with your January 1, 2024 benefit.

• If you were hired before July 1, 2007, (including members who transferred to an GWPORS-covered position from another MPERA-administered system) you will be eligible for a 3% GABA.
• If you were hired on or after July 1, 2007, you will be eligible for a 1.5% GABA.

Other events which increase your benefit will reduce the amount you will get from GABA. If the other increases are greater than your GABA amount, then you will not receive a GABA increase.

The GABA applies to:

• Service Retirement Benefit
• Early Retirement Benefit
• Disability Retirement Benefit
• Survivorship Benefit

GABA also applies to recipients, other than members, such as contingent annuitants and survivors. It does not apply to a person receiving the lumpsum death payment as an annuity.

If you were hired before July 1, 2007, and terminate GWPORS-covered employment, but did not withdraw your accumulated contributions (take a refund), your GABA will remain 3% if you return to GWPORS covered employment.

Eligibility

To qualify for a disability retirement, you must meet the following requirements:

• Your disability must occur during your active membership.
• You must be a vested member (have at least five years of membership service).
• Your disability must be permanent, or at least of extended and uncertain duration.
• Your disability must totally prevent you from doing the essential functions of your job even with reasonable accommodation.
• Your employer must have defined the essential elements of your job and shown reasonable accommodation was attempted for the disabling condition(s) in compliance with the Americans with Disabilities Act.

Disability Benefit

If you become disabled as a direct result of service in the line of duty and

• have less than 20 years of membership service, you may receive a disability retirement benefit equal to one-half of your HAC; or
• have 20 years or more of membership service, you may receive a disability retirement benefit equal to 2.5% of your HAC for each year of service credit.

If you are an active member and become disabled but not in the line of duty, you will receive a disability retirement benefit based on the actuarial equivalent of the accrued service retirement benefit when your disability occurred.

Disability Reviews

At its discretion, the Board may review the medical condition of any member receiving a disability benefit. Periodic reviews are performed to decide if the member still qualifies for disability retirement. The Board may require the recipient of a disability retirement benefit to undergo a medical examination at the Board’s expense.

If the Board determines you are no longer disabled, you must be reinstated to the position you held immediately before retirement or to a position comparable in pay, benefits and duties within your capacity, whichever is first available.

Disability Benefit Cancellation

The Board will cancel your disability retirement in the following cases:

• You are no longer totally disabled and can return to your former job.
• You refuse to submit to a current medical exam or provide updated medical records.

Contact us for complete details about disability benefits and how to apply.

NOTE: If you are still disabled when you reach normal retirement age, we will convert your disability retirement to a service retirement. The benefit amount will not be recalculated. Converting to a service retirement will end medical reviews.

Death Before Retirement

Duty Related: If you die as a direct result of injuries received in the course of your service, your beneficiary is entitled to either:

• a monthly survivorship benefit equal to 50% of your Highest Average Compensation (HAC) if you had 25 years or less of service credit; or
• a monthly survivorship benefit equal to 2% of your HAC for each year of service credit, if you had more than 25 years of service credit.

Non-Duty Related: If you die in a non-duty related death as an active member, your beneficiary is entitled to either:

• A lump-sum payment of your accumulated contributions (your contributions plus interest); or
• an actuarial equivalent of a service retirement benefit.

Non-Vested: If you are a non-vested member, GWPORS will pay a lumpsum death payment to your beneficiary. This death payment will be your accumulated contributions (your contributions plus interest).

Death After Retirement

If you were receiving an Option 1 benefit, and you die before receiving benefits equal to your account balance, your designated beneficiary or estate will receive your remaining account balance. Your remaining account balance is your contributions, plus interest to date of retirement, minus any benefit payments you received. Your designated beneficiary or estate may request the lump-sum payment be received as an annuity.

If you chose Options 2, 3 or 4, see Retirement and Disability Payment Options for details on death benefits.

Death Benefit Claim

Upon notification of your death, MPERA will send a death benefit claim to your designated beneficiary or contingent annuitant. To claim a death benefit, the completed form must be returned to MPERA along with a certified copy of your death certificate.

If you leave your job and request a refund of your accumulated contributions (contributions plus interest) and later return to a GWPORS-covered position, you can purchase the refunded service at anytime prior to retirement if you are an active member.

You must be vested (have five years of service) to purchase refunded service if you are inactive. To purchase the refund, you must repay the accumulated contributions you received and pay the interest at the actuarial assumed rate of return in effect at the time of the redeposit.

Refunded service is both membership service and service credit.

You must be an active GWPORS member to be eligible to purchase this service.

Montana Public Service: If you refunded (or you are eligible to receive a refund) from other public service employment with the state of Montana or a political subdivision, you may be eligible to purchase that service in GWPORS at actuarial cost. You cannot buy service from another public retirement system that will make you eligible for retirement in GWPORS until you receive a refund of the service from the other public system. 

Montana public service is both membership service and service credit.

Absence Due to Illness or Injury: You can purchase time that you are absent from work due to a work-related injury or illness if you did not refund your account. The time which can be purchased may not exceed five years. If you are eligible and pay the contributions and interest, the absence will count as both membership service and service credit.

Upon return to work, you and your employer need to file a written application to buy the time. MPERA needs to receive within one year of your return to work the certification that the injury was work-related.

This service counts as both membership service and service credit.

You must be vested (have five years of membership service) to purchase "One-for-Five" Service.

“One-for-Five” Service: For each five-year period of membership service, you can buy one year of service credit. You may buy up to five years of “One-for-Five” years. You could also buy less than a full year.

“One-for-Five” service is not membership service and cannot be used to make you eligible to retire or to purchase other types of service.

You must be vested (have five years of membership service) to purchase Military/Reserve Military Service

Military/Reserve Military Service: At any time prior to retirement, you may purchase up to five years of your active military or reserve military service at the actuarial cost. You can purchase reserve military time prior to your separation from the services in the reserves. You cannot purchase military time if you are receiving a retirement benefit from the military or from another retirement system or plan, for that time. Reserve military service cannot be purchased if you have already received service credit under USERRA for that time period.

This service is both membership service and service credit.

Employment in United States Government: If you were assigned to a federal agency under the Intergovernmental Personnel Act of 1970, you may purchase the federal employment time if you are vested and return to full-time service in a GWPORS-covered position for at least one year after completing employment with the federal agency. You may continue making contributions to GWPORS while assigned to the federal agency, or may pay an amount equal to the regular employer and employee contributions, plus interest, within two years after returning to a GWPORS-covered job.