MontanaHB 6769th Legislature, Regular Session (2025)HouseWALLET

Generally revise laws related to the administration of TRS

Sponsored By: Mark Reinschmidt (Republican)

Became Law

Retirement

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 1 benefits, 3 costs, 5 mixed.

Stricter rules for disabled retirees working

If you retired on disability and earn more than the yearly limit, your disability benefit stops. You rejoin TRS as an active member the first day of the next month. When you later retire, your benefit is capped at the smaller of two formulas. You also cannot use new permissive service purchases, if they were not in your original disability calculation, to boost that later benefit.

All TRS changes start July 1, 2025

All changes in this law take effect July 1, 2025. Plan hiring, reporting, elections, purchases, and retirements around that date.

Less pay counts for TRS pension

The law tightens what TRS counts as earned pay starting July 1, 2025. TRS counts only pay from employer‑controlled funds before pretax deductions. Employer‑paid insurance, reimbursements, noncash perks, most bonuses, and some termination payments do not count. Cash paid instead of benefits also does not count. Termination pay includes vacation, sick leave, severance, and early retirement incentives, but amounts excluded by IRS section 3121 or paid from a 457(f) plan do not count. This can lower the pay used for TRS contributions and your future pension.

Pay missed TRS contributions with interest

If your employer failed to report you when you were eligible, you and the employer must pay the missed TRS contributions plus interest at the system’s actuarial rate. You may pay in a lump sum or in installments approved by the TRS board.

Clear rules for TRS membership start

On your first day as a substitute, aide, or paraprofessional, you must choose to join TRS now or defer until you work 210 hours in the fiscal year. The choice cannot be changed. If you reach 210 total hours across employers, active membership starts on the first day of the next month. The law also sets full‑time service as 180 days, or 140 hours a month for at least 9 months, or 1,080 hours under an alternative calendar.

Option to buy credit for short service

If you opted out at first but became active in the same fiscal year, you can get credit for 210+ hours by paying both the employee and employer contributions from your first day, plus interest at TRS’s actuarial rate. If you worked fewer than 30 days before joining that year, you can buy those first 30 days on the same terms. You can use these purchase options only once.

Required payouts and dormant accounts

If you are inactive, TRS starts benefits by your required minimum distribution (RMD) date: April 1 after the year you end all TRS jobs or after the year you reach your birth‑group age (70½, 72, 73, or 75), whichever is later. If you do not apply by then, TRS begins monthly payments under the default option. Vested members unlocatable or inactive past their RMD date, and nonvested members inactive for 7 years, move to dormant status. While dormant, TRS stops contact and moves your account to the pension fund without adding interest; if a vested member later acts, TRS restores the account with the interest it would have earned.

Stricter monthly TRS reports by employers

Employers must send TRS a wage and contribution report every month, even in months with no reportable pay. They must keep records and give TRS documents it requests, including for contractors and volunteers. Each month, they must report substitutes and aides who deferred membership so TRS can track 210‑hour totals. This adds employer paperwork but helps keep your service and pay records accurate.

Clear rules for true volunteer roles

A position counts as a volunteer role only if you get no pay, stipends, reimbursements, or in‑kind benefits; it was not paid in the last 12 months and will stay unpaid for 12 months; no one else in that role is paid; and you stay within 312 hours a year (plus daily and weekly limits on business days). These roles are not reported to TRS. TRS may ask employers for proof.

Sponsors & Cosponsors

Sponsor

Mark Reinschmidt
Republican • House

Cosponsors

Janet Ellis
Democrat • Senate

Roll Call Votes

All Roll Calls

Yes: 259 • No: 37

House vote • 4/1/2025

Do Concur

Yes: 32 • No: 18

House vote • 3/31/2025

Do Concur

Yes: 33 • No: 17

House vote • 1/21/2025

Do Pass

Yes: 97 • No: 1

House vote • 1/20/2025