Lawsuit Challenges Montana Pension Reform

October 14, 2013 ( – A lawsuit has been filed against the state of Montana, claiming cost-saving cuts to pension payments are unconstitutional, according an Associated Press news report.

The lawsuit by the Montana Education Association/Montana Federation of Teachers has been on the horizon since Montana Governor Steve Bullock signed two bills into law to fix the underfunded Montana Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) in May (see “Mont. Governor Signs Pension Reform”).

At that time, retirees warned state lawmakers they would oppose reductions in their guaranteed inflation increases of 1.5%, said the news report. The pension adjustment laws will reduce the inflationary increase to 0.5% starting in January 2014, as well as ask both employers and employees to make larger retirement plan contributions, while reducing retiree benefits.

The lawsuit asks the court to declare the benefit-cut provision of Montana House Bill 377 unconstitutional and requests a preliminary injunction to stop the reduction in cost-of-living payments.