Settlement guarantees stable cost-of-living increases for public employee retirees
The potential cut has been in limbo for nearly two years, and was bound for a decision in front of the
The settlement maintains the 3 percent Guaranteed Annual Benefit Adjustment for employees hired prior to
The 2013 Legislature passed a law to reduce GABA from 3 percent to 1 percent. The Montana Public Employees' Retirement System had been ailing since the financial recession, and the 2013 bill was one of several steps aimed at making it fiscally sound.
Later that year the
"Because the GABA is the only method that retirees have to adjust their lifestyle to the cost of living, and to the increased cost for health insurance and medical care, it's critical to retirees to know that they have some constancy," she said.
She added that the settlement solidifies the contract between the state and its employees. It shows "the state is actually going to honor its commitment to them," she said.
A spokesperson for the
"It preserves flexibility for
If the retiree association had lost the case and the GABA had been reduced to 1 percent, Kendall said an employee receiving median retirement benefits would have lost about
Though PERS was considered fiscally unsound in 2013, it has since stabilized.
"The PER system is going to be fine," he said.
A similar proposal to lower GABA for retired public school teachers was also blocked in district court this June. Barnes declined to comment if the state would appeal that case to the
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