HELENA – Changes made by the Legislature will mean reduced pension payments for state and local government employees taking early retirement if they leave their jobs after Aug. 31.
Payments under the Public Employee Retirement System are being adjusted to account for people living longer, Lee Newspapers of Montana reported Sunday.
The Public Employee Retirement Administration estimated the cuts average about 12 percent, but vary by age, salary and years of work.
The new rules take effect on Oct. 1, so those considering early retirement would need to leave their jobs before Aug. 31 to avoid the reduction, officials said.
The legislation affects only those taking early retirement after working fewer than 30 years or who are younger than 60.
Word is starting to get out about the change, but Melanie Symons, chief legal counsel for the Public Employee Retirement Administration, said it’s not clear how many people will be impacted.
Tom Schneider of the Montana Public Employees Association, a union representing state workers, urged employees considering early retirement this year to ask the retirement administration to run pension comparisons before choosing a date.
“We made a big deal of it at our convention,” said Schneider, the union’s lobbyist and retired executive director. “We don’t want anyone not knowing this change is taking place.”
As of mid-2010, PERS had an unfunded liability estimated at $1.35 billion.
Symons said the benefit changes were made based on life expectancies, not on the plan’s unfunded liability.
“However, these new factors may help reduce PERS’ unfunded liability,” she said.
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