Montana, Retirees Agree to Settlement Over COLA Cut


The state of Montana and its public retirees agreed to a settlement last week over a cost-of-living adjustment cut originally enacted in 2013.

In 2013, lawmakers passed a law to reduce retirees’ annual COLA from 3 percent to 1 percent. The law has been stuck in the court system ever since.

But last week, the state settled with retirees: all employees hired before July 1, 2013 will get to keep their 3 percent COLA.

From the Helena Independent Record:

A 2013 legislative attempt to cut the annual benefits increase for retired state and local employees died after a recent settlement between the retiree association and the state of Montana.

The potential cut has been in limbo for nearly two years, and was bound for a decision in front of the Montana Supreme Court. Chief Justice Mike McGrath dismissed the case last Thursday after both parties agreed to drop their appeals.

The settlement maintains the 3 percent Guaranteed Annual Benefit Adjustment for employees hired prior to July 1, 2013. It also requires both parties to pay their own attorney fees.

Cathy Kendall, president of the retiree association, touted the settlement as a victory that provides stability for 20,000 Montana retirees.

“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.


A spokesperson for the Montana Attorney General’s Office said the settlement was made with the support of legislative leaders and is in the best interest of all Montanans.

“It preserves flexibility for the Legislature and governor to craft other lawful pension reforms in the future, and Montana taxpayers will not be paying the Association of Montana Retired Public Employees’ attorney fees,” spokesman John Barnes wrote in an email.

The suing retiree group had argued that the COLA cut would cost “median” retiree around $135,000 over the course of 20 years.


Photo by Joe Gratz via Flickr CC License

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