PENSION INCREASES
In response to our efforts, substantial pension increases were granted by the legislature in 1983, 1985, 1993. There was no guaranteed cost of living increases, thus we had to pursue pension increases at every legislative session.
A historical event took place in 1997, when we were successful, with the help of our Telephone Tree, in obtaining a 1.5% GABA (Guaranteed Annual Benefit Adjustment). This was the only guaranteed annual pension benefit increase in the history of the PERS in over 50 years.
Due to the cost of living increases we decided that in 2001 we lobbied for an additional 1.5% bringing the GABA to 3% and were successful.
We also lobbied for an additional benefit for long time retirees in the same bill. It provided a one time increase to those who retired prior to 1982 so that their benefit increased to an amount equal to 75% of their purchasing power when they retired. The idea was to address some of the negative impacts older retirees have experienced due to high inflation.
TAX ISSUES
We were unsuccessful in preventing the taxing of our pensions in the 1991 Legislative session. The U.S. Supreme Court decision (Davis vs. Michigan) that granted Federal retirees the same exemptions we receive cost the State of Montana about $20 million, so the legislature decided to tax both them and us. We fought for and were able to get a partial payback, called a "Make Whole" provision, that would have averaged about 2.5 percent.
Federal retirees immediately filed suit against the State saying, in part, that the State cannot give us a "Make Whole" payback, unless it gives them one also. We entered the suit, on the side of the state in an attempt to protect our "Make Whole" payback provision and the District Court decided in our favor but the Supreme Court reversed that decision late in 1993.
In the 1999 regular session, the 2000 special session, and again in 2001 tax reform bills were introduced. None of these were good for retirees so we lobbyied against them and they were not passed. We will continue to monitor tax bills.
2009 Legislative Session
With our lobbyists assistance, we persuaded the legislature to pass House Bill 315, which adds an inflation index to the pension exemption on our state's income tax returns. The current exemption rates have not been changed since it was put in place in 1991. This inflation index will benefit all retirees residing in Montana. We will continue this type of work in future legislatures.
2011 Legislative Session
Due to the mood of the legislature, we are concentrating on keeping our benefits whole and supporting legislation that preserves our struggling pension funds. These are difficult times, but the pension fund will improve with the stock market.