Montana teachers’, public safety officers’, and public workers’ pension benefits are entitled to certain protections under state law and affirmed by court rulings. At the same time, the state does have some legal precedent that allows them to change particular aspects of retirement benefits.

In other words, there are parts of public pension benefits that can be changed by future state laws, but only certain parts of those benefits.

Equable Institute partnered with Columbia Law School’s Center for Public Research and Leadership to create infographics that map states’ pension governance. Understanding the legal environment for pension policies can be confusing for both lawmakers and public workers, but illuminating legally permissible policy pathways to improve funding sustainability and ensure adequate retirement income security for states’ workforces is essential.

In the case of Montana, state law prohibits the legislature from decreasing cost-of-living adjustments for public workers. In 2013, lawmakers attempted to do just that by changing the guaranteed annual benefit adjustment from 1.5% to 0.5%. Some public workers sued the state in an effort to have that part of the law overturned, and the court agreed that the benefit adjustment was a contractually-protected benefit.

State law, though, does allow for the legislature to change employee contribution rates, as it did in 2011 when it increased contribution rates for members of the Montana Public Employees Retirement Board from 6.9% to 7.9%. There have been no legal challenges to this part of the law.

The law also allows for changes in benefit calculations.

The legal environment is favorable for these shifts – meaning that state law and legal precedent allows for changes to these aspects of pension policy.

What’s unclear is whether Montana can shift workers’ vesting periods, because this issue has not been brought to court and there is no existing law explicitly prohibiting the change.

It is important to note that current retirees’ benefits have greater legal protection than those of active employees. Apart from reduced or eliminated COLAs, current retirees’ benefits cannot be taken away or reduced.

Disclaimer: The information here doesn’t constitute legal advice or representation. Equable is not necessarily recommending any of the policies discussed in the infographic. Some may not work for certain states, others may not be desirable policy. Ultimately, any pension policy change should honor promises made to public workers and put them on a path to retirement security, while ensuring sustainable funding measures.

Download the infographic here