As a new JRS-covered employee, you were asked to complete a JRS Membership/Designation of Beneficiary form to designate your beneficiary(ies) for your JRS account. After you completed the information, your employer sent it to MPERA.

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.

MPERA must have your updated information before any changes take effect. We will print your beneficiary information on your Annual Benefit Statement, which is mailed to you every August. Review the statement carefully. If your information is outdated, please update it as soon as possible.

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

* 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 pay part of their gross compensation to JRS. The current contribution rate is 7.00%.

Interest: Your JRS account earns interest each month. Although you would receive your interest if you withdraw your account, if you retire the interest credited to your account will not affect the amount of your monthly retirement benefit. Interest will be credited on service purchase payments at the same rate as regular contributions. All interest credited is tax- deferred.

Taxation: Contributions made before July 1,1991 to JRS were taxed. If you have taxed money on account, when you take a lump sum refund or retire, part of your refund or monthly benefit will not be taxed.

Contributions made after July 1, 1991, to JRS are tax-deferred or pre-tax. This means state and federal taxes are not paid until you receive the money as a benefit or refund.

Purchase of Service: To purchase refunded or other types of optional service, you can contribute amounts beyond your regular contributions. These additional payments are pre-tax if you authorize payment by a payroll deduction contract. You may also rollover funds from an eligible plan or make cash payments.

Employer Contributions*

The state of Montana contributes an amount equal to 25.81% of the compensation of each JRS member to the trust fund.

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

The amount of time you work and contribute to JRS directly affects the amount of your retirement benefit. The monthly benefit you will receive depends on the number of years you work in a JRS-covered position, your compensation, and if you purchase any service.

Membership Service 

We use membership service to determine if you are eligible for vesting, retirement, or other JRS benefits. You earn one month of membership service for any month you contribute to JRS, 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 JRS benefits.

Service Credit

MPERA uses service credit to calculate the amount of your benefit. If you work 160 hours or more in any month, you get 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 would 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.

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

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

Service Retirement Benefit

You are eligible for service retirement benefits when you complete five years of membership service and are 60 years of age.

The JRS retirement benefit is calculated in one of two ways, depending on whether you are covered under the Guaranteed Annual Benefit Adjustment (GABA).

The factors used to calculate your lifetime benefit are:

• Years of Service Credit - the amount of service you earned.
• HAC - (Highest Average Compensation) is the average of your highest consecutive 36 months of compensation.
• A Factor - 3.333% and 1.785% are the percentages that determine how much of your current salary or your HAC you receive for each year of service credit.
• Current Monthly Salary - the current monthly compensation for the office you retired from.

Non-GABA Coverage formula: 3.333% of current monthly salary per year for the first 15 years of service credit, plus 1.785% of your current monthly salary per year for each year of service credit after 15 years.

(3.33% X 15 X Current Monthly Salary) + (1.785% X (Current Service Credit – 15) x Current Monthly Salary)

GABA Coverage formula: 3.333% of your Highest Average Compensation (HAC) per year for the first 15 years of service credit plus 1.785% of your HAC per year for each year of service credit after 15 years.For members hired on or after July 1, 2013, HAC will be capped at 110% on compensation earned during the highest average compensation period.

(3.33% X 15 X HAC) + (1.785% X (Current Service Credit – 15) x HAC)

Involuntary Retirement Benefit
You may receive an actuarially reduced retirement benefit in either of the following circumstances:

1. You were involuntarily discontinued from service after completing five years of membership service, but before reaching retirement age; or
2. You were discontinued from service after completing at least 12 years of service credit but before retirement age, and appointed or elected to office after July 1, 1983.

JRS offers four benefit payment options when you decide to retire. The option you choose determines whether or not income is provided for 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.

Once you receive and accept your first benefit payment, you cannot change your option, except under specific circumstances.

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 monthly benefit payments end upon your death.

OPTION 2
Option 2 will provide a monthly benefit to you for your lifetime. When you die, your contingent annuitant will receive the same amount for the rest of their life. Upon his or her death after receipt of any benefits, your remaining account balance (if any) will revert to the JRS trust fund.

The benefit amount of Option 2 is less than Option 1 because the lifetime value is spread over two lives instead of one. The Option 2 factor is based on both your age and your contingent annuitant’s age at your retirement date. According to IRS regulations, if the age difference between you and your non-spouse contingent annuitant is greater than ten years, you may not select Option 2.

Your Option 2 benefit is calculated by multiplying the Option 1 benefit by an Option 2 factor. You may not change your Option 2 election or your designated contingent annuitant, except in limited circumstances.

OPTION 3
Option 3 will provide a monthly benefit to you for your lifetime. When you die, your contingent annuitant will receive one-half (½) of that amount for the rest of their life. Upon his or her death after receipt of any benefits, your remaining account balance (if any) will revert to the JRS trust fund. 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 one-half (½) of your benefit, your 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. You may not change your Option 3 election or your designated contingent annuitant, except in limited circumstances.

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, as defined in § 19-2-907, MCA, granting your contingent annuitant the right to receive part of the 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 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 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. 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. The 10-year period begins on your effective date of retirement.

20-year Period Certain: You must be age 65 or younger when you retire to be eligible for this benefit. 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. The 20-year period begins on your effective date of retirement.

For this Option, you can change your contingent annuitant designation. 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 Guaranteed Annual Benefit Adjustment (GABA) will increase your retirement benefit every year if you are eligible.

If you became a member on or after July 1, 1997, or filed an election with MPERA prior to December 1, 2005 to receive GABA, you will be eligible for a 3% GABA.

Before you receive an increase under GABA, you need to have received your benefit for at least 12 months. Once eligible, 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.

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. §19-5-901, MCA

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 become disabled, you may be entitled to a disability retirement benefit. Disability means the inability, even with reasonable accommodation, to perform your work due to physical or mental incapacity. The disability does not have to be work-related, but must occur while you were employed in a JRS-covered position and be of permanent or extended and uncertain duration.

Disability Benefit

Duty
In the case of the disability of a vested or non-vested member, if the disability is a direct result of any service for the Montana judiciary, you will receive a disability retirement benefit equal to the greater of:

• one-half of your current salary
• one-half of your HAC

Non-duty
If you become disabled, and are vested, you can receive a disability retirement benefit based on the actuarial equivalent of the accrued service retirement benefit at the time of retirement.

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 you continue to qualify for disability retirement. The Board may require you to undergo a medical examination at the Board’s expense.

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 (60), we will convert your disability retirement to a service retirement. The benefit amount will not be adjusted but the conversion may change your tax status if your disability was duty-related. Converting to a service retirement will end medical reviews.

Active Member
If you die as an active, vested JRS member before reaching normal retirement age, your designated beneficiary(ies) can receive either a lumpsum payment or a monthly survivorship benefit. The benefit will be the actuarial equivalent of your applicable service retirement benefit. 

If you die as a direct and proximate result of injury received in the course of your service or duty, a survivorship benefit will be paid to your designated beneficiary. The survivorship benefit is the contingent annuitant’s benefit, if you were called to duty following retirement; or the actuarial equivalent of your applicable service retirement benefit.

Inactive Member
If you are an inactive member with less than five years of service, JRS will pay a lump-sum death payment to your beneficiary. This death payment will be your accumulated contributions plus interest.

If you were vested (have five or more years of membership service), your beneficiary may be able to receive a monthly benefit for their lifetime or take a lump-sum distribution of your account.

Retired Member
If you were receiving an Option 1 benefit, and you die before receiving benefits equal to your account balance, your beneficiary 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 may request the lumpsum payment to be paid as an annuity.

If you chose Options 2, 3 or 4, see Retirement and Disability Payment Options.

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 JRS-covered position, you can purchase the refunded service at anytime prior to retirement if you are an active member.

You must be vested to purchase refunded service if you are inactive, which means you have terminated employment and are no longer contributing to JRS.

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.

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 JRS at actuarial cost. You cannot buy service from another public retirement system that will make you eligible for retirement in JRS until you receive a refund of the service from the other public system.

You must be an active JRS member to be eligible to purchase this service. Documentation from your prior retirement administration showing the dates of your employment is required.

Montana public service is both membership service and service credit.

You do not need to be vested (have five years of JRS membership service) to purchase Montana Public 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 will need to have at least five years of JRS membership service to purchase "One-For-Five" 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 service 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 same period of time.

Reserve military service cannot be purchased if you have already received service credit under USERRA for that time period.

You will need to provide a DD-214 to MPERA to purchase this service.

This service is both membership service and service credit.

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