As a School Board Member, you are an important and valued stakeholder of the Montana Teachers’ Retirement System. Our mission at TRS is to provide long-term financial security for our members while maintaining the stability of the fund. We recognize that in order to accomplish this mission, we need the support of our participating employers and their governing boards.
Although public school districts in the State of Montana are required by law to participate in TRS, I think you should be proud of and promote the fact that, as an employer, you provide access to a defined benefit retirement system which, in turn, provides long-term financial security for your employees.
This webpage is designed to help you understand the importance of the role TRS plays in recruiting and retaining qualified teachers and administrators. I encourage you to review the information provided below and to contact us via the Ask TRS mailbox if you would like additional information. We welcome your questions and comments.
Shawn Graham
TRS Executive Director
A strong pension plan should be viewed as a valuable tool to help recruit and retain qualified teachers and administrators.
Providing your educators a Defined Benefit pension, guarantees they will receive a monthly benefit (payment) for the rest of their lives.
Satisfaction surveys show how important TRS is to active and retired members:
To help understand what TRS is, we encourage you to watch our TRS 101 video. This material is also available on our Forms and Publications page.
TRS is a defined benefit (DB) pension plan qualified under Internal Revenue Code (IRC) Section 401(a).
State law established TRS in 1937 to serve public school teachers and other public employees who work in an instructional or educational services capacity in the state of Montana. Membership in TRS is mandatory for all K-12 public educators, except for persons teaching fewer than thirty days in each fiscal year.
TRS law is codified in Title 19, Chapter 20, Montana Code Annotated (MCA), part 44 of the Administrative Rules of Montana (ARM).
Since 1937, Montana TRS has grown from an initial enrollment of 3,367 members to approximately 50,000 active, inactive, and retired members.. The vast majority of TRS retirees who receive monthly benefits live right here in Montana and the dollars they receive from TRS constitute an important part of the state and local economy. Financial reports and funding information are available to review.
Both the employer and the worker are required to contribute a percentage of earnings to the retirement system.
Those who have accrued at least five years of service are vested members. Once retirement age is reached and all employment in TRS-reportable positions terminated, they may apply for a monthly benefit.
The retiree's benefit amount in a DB plan is not based on the account balance.
Instead, a formula is used to calculate the monthly benefit. This takes into account the member's:
This monthly benefit amount is guaranteed for the retiree's lifetime.
Every January a Guaranteed Annual Benefit Adjustment (GABA) provides a modest benefit increase to Montana TRS retirees who have received at least 36 benefit payments.
Employers and employees are not required to make contributions. There is no promise of income in retirement.
401(k), 457, and 403(b) are all examples of DC plans.
DC plans are subject to market forces and do not guarantee income for life. Retirees who outlive their savings may be more likely to rely on family support or public assistance programs.
The burden is placed on the employee to:
The National Institute on Retirement Security 2023 Report found that, "Pensions can deliver the same level of retirement benefits at nearly half the cost of a DC plan."
A 2022 report stated, "In summary, when it comes to providing retirement income, DB pensions are substantially more economically efficient than individual retirement accounts because of risk pooling across a large number of individuals, a longer investment time horizon, and lower expenses and higher returns."
TRS has an Executive Director and Board of Directors. It is attached to the State of Montana's Department of Administration. A Deputy Executive Director and 22 additional staff manage the day-to-day business.
The TRS Board of Directors is comprised of six members appointed by the Governor. Four members, including at least one active classroom teacher and at least one retired member, represent the teaching profession. Two public members from other professions fill the remaining seats. Each TRS board member serves on at least one committee; in addition, one member represents TRS on the State of Montana Board of Investments (BOI) board.
The TRS board meets five times per year in Helena. The public is welcome to view or join meetings and, when open to public comment, share thoughts and opinions.
Challenges to TRS and your role as a School Board Trustee
The section of TRS law entitled "Retirement System -- Policy" (19-20-102, MCA) may provide a helpful summary of TRS and its purpose.
One paragraph within that section is shown below:
Provisions are in place to prevent unfair manipulation of retirement benefits that would harm the system and jeopardize the future retirement of all members.
Without these, a member's final salary could be inflated to achieve a larger monthly benefit. Or a member could retire then return to work at a high salary without paying the same contributions required of active members.
Periodically, legislation is brought forward that attempts to weaken these restrictions or limit employer contributions.
Often, bill sponsors are sincere in the belief that changing the law will help school districts resolve short-term budget shortfalls, attract more candidates, or address other immediate concerns. However, a long-term effect of such legislation is that it increases the system's unfunded liability, making it less likely that TRS can fulfill obligations to thousands of current and future retirees.
Many of Montana's school districts face constant funding challenges. However, a strong pension plan should be viewed not as a costly burden but as a valuable tool to help recruit and retain qualified teachers and administrators.
If you have questions about TRS or if you would like more information about promoting its value in your district, please email us at Ask TRS.
Together, we can achieve the TRS mission: To promote long-term financial security for our members while proactively maintaining the stability of the system.
Governing Laws:
Administrative Rules of Montana, Chapter 2.44
National Conference on Public Employee Retirement Systems research:
Unintended Consequences- How Scaling Back Public Pensions Puts Government Revenues at Risk
National Institute of Retirement Security research:
2022 Report: Economic Benefit of Public Pension Dollars in Rural America
and Montana Supplement with County-by-County Totals
Pensionomics 2023 – Montana Fact Sheet
2019 Survey: State and Local Employee Views on Jobs, Pay and Benefits
2018 AARP-in-the States Snapshot: Montana TRS Economic Impact
