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

Your spouse or dependent children are your statutory beneficiaries. You can also list one or more non-statutory beneficiary(ies) in case you die without a statutory beneficiary. A non-statutory beneficiary is eligible to receive any balance in your account, but cannot receive a monthly benefit.

Your beneficiary designation is important. It is necessary that you keep it up-to date. Consider updating your beneficiary designation if you get married or divorced, become a parent or your beneficiary dies.

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

Member Contributions
All members must pay part of their gross pay to MPORS in the following amounts:

• 8.5% if you were first employed after June 30, 1979 and before July 1, 1997.
• 9% if you were first employed on or after July 1, 1997, and members who elected GABA coverage.

Interest: Your MPORS 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 made before July 1985 to MPORS were taxed. If you have taxed money on account, then part of your refund or monthly benefit will not be taxed when you take a lump sum refund or retire.

Contributions made after July 1985, are made 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 an amount equal to 14.41% of their total MPORS-covered payroll to the pension trust fund.

State Contribution
The state of Montana contributes an amount equal to 29.37% of the total compensation paid to all active MPORS members each year. These contributions are made to the retirement trust fund by the State Auditor as provided in § 17-7-502, MCA.

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

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

Membership Service
We use membership service to determine if you are eligible for vesting, retirement, or other MPORS benefits. You earn one month of membership service for any month you contribute to MPORS, 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 MPORS 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 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. 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 Final Average Compensation (FAC) 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.

Final Average Compensation (FAC) - the average of your monthly compensation for the last 36 months of service. 

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

Service Retirement
Defined benefit retirement plans use a predetermined or defined formula to calculate your benefit. Benefits are based on the law in effect at the time of your termination from employment; therefore, some information found here may not apply in specific cases. Information is based on 2017 law.

You are eligible for service retirement benefits when you complete:

• 20 years of membership service at any age; or
• 5 years of membership service and 50 years of age.

Your benefit is calculated based on:

• Retirement Factor - a percentage defined in law (currently 2.5%).
• Years of Service Credit - the amount of service you earned through employment.
• Final Average Compensation (FAC)¹ - the average of your monthly compensation for the last 36 months of service.

The formula for a MPORS monthly service retirement benefit depends on your years of membership service, and years of service credit. The basic formula for a MPORS monthly service retirement is:

Retirement Factor x Years of Service Credit x FAC

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

The following are sample calculations. These calculations are for educational purposes only and do not cover all contingencies.

Service Retirement Kenny
Age At Retirement = 45
Service Credit = 20 years
Final Average Compensation (FAC) = $3,000 per month
Account Balance at Retirement = $35,450

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

When you have received your benefit for at least 12 months, you 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.

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

The GABA applies to:

• Service Retirement Benefits;
• Disability Retirement Benefits; and
• Survivorship Benefits.

GABA also applies to recipients, other than members, such as survivors. It does not apply to a person receiving the lump-sum death payment as an annuity.

Minimum Benefit Adjustment
MPORS members hired before July 1, 1997 could elect to be covered by GABA or a minimum benefit adjustment. Under the minimum benefit adjustment provision, your retirement benefit payment for each fiscal year may not be less than one-half of the base salary paid in the current fiscal year to a newly confirmed police officer in the city or town from which you retired.

Annual Increases for DROP Participants
After contributing to DROP for at least 12 months, if covered by GABA, you will receive a 3% GABA increase into your DROP account the following January.

If you did not elect GABA, you will receive the minimum benefit increases to your monthly DROP accrual (see above).

If you continue to work after the DROP period, you will not receive GABA increases during your period of post DROP employment.

The Deferred Retirement Option Plan (DROP) provides MPORS members who have at least 20 years of membership service with an additional retirement option. Participation in the DROP is optional. Your decision to participate is irrevocable.

DROP Participation
As an active MPORS member, the DROP allows you to begin accumulating your retirement benefit without terminating employment. You may elect a DROP period that can last from 1 to 60 months. While participating in the DROP, your monthly benefit payment, also known as the DROP accrual, remains in the MPORS trust fund in a separate DROP account. Your DROP account will grow while you continue to work and receive your regular pay.

You, your employer and the state will continue to pay regular contributions to MPORS while you participate in the DROP. However, you will not earn additional membership service or service credit. As a DROP participant, you cannot receive a disability retirement, purchase service, receive service credit, or a refund.

To participate in the DROP, please send a request to MPERA that includes your full name, social security number, mailing address, and date of birth. We will send you a DROP application along with a benefit estimate. If you decide to participate, complete the application and return it to us at least two weeks before the first day of the month you would like to start your DROP, along with a certified copy of your birth certificate.

NOTE: If you terminate MPORS-covered employment during the DROP period, your DROP benefit will be paid to you. In addition, payment of your monthly service retirement benefit will begin. The DROP period ends on the last day of the last full month of active employment.

Distribution of DROP Benefit
After you terminate MPORS-covered employment and start receiving your MPORS monthly retirement benefit, your DROP benefit will be distributed to you as a lump sum or a direct rollover to an eligible retirement plan. If you do not designate a rollover within 60 days after termination of employment, your DROP benefit will be paid directly to you in a lump-sum. Required federal and state tax withholding will be withheld.

DROP Survivorship Benefits
If you die while participating in the DROP, your surviving spouse, or dependent children if you do not have a spouse, will receive your DROP benefit. Your surviving spouse or dependent children are also entitled to your monthly retirement benefit. If you have no surviving spouse or dependent children, then your designated beneficiary will receive the balance of your
DROP account.

MPORS-Covered Employment After DROP
You may continue to work in MPORS-covered employment after your DROP period ends, but you will be considered newly hired for retirement plan purposes. You will not receive your service retirement benefit or your DROP benefits while you continue to work. Your DROP account will continue to earn interest¹.  You will earn an additional retirement benefit based on your final average compensation and service credit earned after DROP participation. Your DROP benefit will remain based on your final average compensation before the DROP period began.

¹ The interest rate will be fixed at the end of each fiscal year at the actuarially assumed rate of return.

Eligibility
Disability is the total inability to perform your work due to physical or mental incapacity. The disability does not have to be work-related but the disability must occur while employed in an MPORS-covered position. To qualify for a disability retirement, you must meet the following requirements:

• must occur while you were employed in a MPORS-covered position, and
• be of permanent or extended and uncertain duration.

Disability Benefit
If you are disabled before earning 20 years of membership service, you will receive a disability retirement benefit equal to one-half your final average compensation.

If you are disabled after earning more than 20 years of membership service, you will receive a disability retirement benefit calculated at the same rate as a service retirement benefit.

Disability Reviews
At its discretion, the Board may review the medical condition of any member receiving a disability benefit. Periodic reviews are performed to determine 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 and benefits with duties within your capacity, whichever is first available. If you become an active member within 30 days of being notified of reinstatement, you will be considered to have been continuously employed during the time of your disability.

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

• You are no longer totally disabled and have been offered a position with the employing city; or
• You refuse to submit to a medical examination.

Upon notification of your eligibility to return to work, the employing city may request a medical or psychological review of your ability to return to work.

If the Board’s findings are upheld, the city must pay the cost of the review.

Payment of Disability Benefit
Unless canceled by the Board for reasons described above, your disability benefit will be paid for the rest of your life. Upon your death, the benefit will be paid to your surviving spouse or dependent child. This is the same as provided for under a service retirement benefit. In addition, you (or your survivors) will receive applicable benefit increases, such as GABA.

Active Member
If you die as an active member, your surviving spouse (or dependent child(ren) if there is no surviving spouse) will receive benefits as stated below:

• If you have not completed 20 years of membership service, the monthly benefit will be equal to one-half (½) of your final average compensation.
• If you have completed over 20 years of membership service, the monthly survivorship benefit must equal 2.5% of your final average compensation for each year of service credit.

If you do not have a spouse or dependant child, a lump-sum payment will be paid to your beneficiary.

Inactive Member
If you are an inactive member with less than 5 years of service, MPORS will pay a lump-sum death payment to your statutory beneficiaries. This death payment will be your accumulated contributions plus interest.

If you were vested (have five or more years of membership service), your surviving spouse will receive a monthly benefit for their lifetime. If you have no surviving spouse, your dependent child(ren) will receive a monthly benefit until they are no longer dependent. If you have neither a surviving spouse or dependent children, your beneficiary will receive a lump-sum payment of your accumulated contributions.

Retired Member
Your retirement benefit will be paid to your spouse upon your death. If you do not have a surviving spouse, or your surviving spouse dies while receiving the benefit, the benefit will be paid to your surviving dependent child(ren).

If you have no surviving spouse or dependent child(ren), your designated beneficiary will receive your remaining account balance (your contributions plus interest on your date of retirement minus any retirement benefit payments you had received). If you have no beneficiary, the amount will then be paid to your estate.

Death Benefit Claim
Upon notification of your death, MPERA will send a death benefit claim to your designated beneficiary or survivor. 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 MPORS-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 MPORS.

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

You must be an active MPORS 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 MPORS 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 MPORS 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 MPORS membership service) to purchase Military/Reserve Military Service.