19-20-101. Definitions. As used in this chapter, unless the context clearly indicates otherwise, the following definitions apply:

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(1)”Accumulated contributions” or “account balance” means the sum of all the amounts deducted from the compensation of a member or paid by a member and credited to the member’s individual account in the annuity savings account, together with interest, minus any amount deducted for correction of errors and the aggregate amount of all retirement benefit payments and refunds of accumulated contributions paid to or on behalf of the member.

(2)”Actuarial equivalent” means a benefit of equal value when computed upon the basis of the mortality table and interest rate assumption set by the retirement board.

(3)”Alternate beneficiary” means an estate or an individual not designated as a beneficiary but that becomes a beneficiary pursuant to 19-20-1005.

(4)”Average final compensation” means a member’s highest average earned compensation, determined pursuant to 19-20-805, on which all required contributions have been made.

(5)”Beneficiary designation” means the process that the retirement system prescribes pursuant to this chapter by which a person authorized by law designates one or more beneficiaries.

(6)”Beneficiary designation record” means either the hard copy form or electronic record prescribed by the retirement system and used by a person authorized by law to designate one or more beneficiaries.

(7)”Benefit recipient” means a retired member, a joint annuitant, or a beneficiary who is receiving a retirement allowance.

(8)”Contingent beneficiary” means a designated beneficiary with the right to receive any benefit or refund of accumulated contributions payable if there is no eligible primary beneficiary.

(9)”Creditable service” is that service defined by 19-20-401.

(10)”Date of termination” or “termination date” means the last date on which a member performed service in a position reportable to the retirement system.

(11)”Designated beneficiary” means one or more primary beneficiaries or contingent beneficiaries designated pursuant to 19-20-1006.

(12)(a) “Earned compensation” means, except as limited by subsections (12)(b) and (12)(c) or by 19-20-715, remuneration paid for the service of a member out of funds controlled by an employer before any pretax deductions allowed under the Internal Revenue Code are deducted.

(b)Earned compensation does not include:

(i)direct employer premium payments on behalf of members for medical, pharmaceutical, disability, life, vision, dental, or any other insurance;

(ii)any direct employer payment or reimbursement for:

(A)professional membership dues;

(B)maintenance;

(C)housing;

(D)day care;

(E)automobile, travel, lodging, or entertaining expenses; or

(F)any similar form of maintenance, allowance, or expenses;

(iii)the imputed value of health, life, or disability insurance or any other fringe benefits;

(iv)any noncash benefit provided by an employer to or on behalf of a member;

(v)termination pay unless included pursuant to 19-20-716;

(vi)compensation paid to a member from a plan for the deferral of compensation under section 457(f) of the Internal Revenue Code, 26 U.S.C. § 457(f);

(vii)payment for sick, annual, or other types of leave paid to a member prior to termination from employment or accrued in excess of that normally allowed;

(viii)incentive or bonus payments paid to a member that are not part of a series of annual payments;

(ix)a professional stipend paid pursuant to 20-4-134;

(x)any similar payment or reimbursement made to or on behalf of a member by an employer;

(c)(i) Adding a direct employer-paid or noncash benefit to an employee’s contract or subtracting the same or a similar amount as a pretax deduction is considered a fringe benefit and not earned compensation.

(ii)Cash paid in lieu of any direct employer-paid or noncash benefit that has previously been or would be paid or provided to or on behalf of the employee at the employee’s request or direction is considered a fringe benefit and not earned compensation.

(13)”Employer” means:

(a)the state of Montana;

(b)a public school district, as provided in 20-6-101 and 20-6-701;

(c)the office of public instruction;

(d)the board of public education;

(e)an education cooperative;

(f)the Montana school for the deaf and blind, as described in 20-8-101;

(g)the Montana youth challenge program, as defined in 10-1-101;

(h)a correctional facility, as defined in 41-5-103;

(i)the Montana university system;

(j)a community college; or

(k)any other agency, political subdivision, or instrumentality of the state that employs a person who is designated a member of the retirement system pursuant to 19-20-302.

(14)”Extra duty service” means service in an educational services capacity that is not compensated as part of the normally assigned duties and functions of a school district teacher, administrator, or other employee but is regularly assigned to one or more school district teachers, administrators, or other employees as part of the regular operation of the school district’s curricular and extracurricular programs.

(15)”Full-time service” means service that is:

(a)at least 180 days in a fiscal year;

(b)at least 140 hours a month during at least 9 months in a fiscal year; or

(c)at least 1,080 hours in a fiscal year under an alternative school calendar adopted by a school board and reported to the office of public instruction as required by 20-1-302. The standard for full-time service for a school district operating under an alternative school calendar must be applied uniformly to all employees of the school district required to be reported to the retirement system.

(16)”Individual” means a human being.

(17)”Internal Revenue Code” has the meaning provided in 15-30-2101.

(18)”Joint annuitant” means the one person that a retired member who has elected an optional allowance under 19-20-702(2), (4), or (5) has designated to receive a retirement allowance upon the death of the retired member.

(19)”Member” means a person who has an individual account in the annuity savings account. Unless otherwise specified, “member” refers to a tier one member or a tier two member.

(20)”Normal form” or “normal form benefit” means a monthly retirement benefit payable only for the lifetime of the retired member.

(21)”Normal retirement age” means an age no earlier than 60 years of age.

(22)”Part-time service” means service that is not full-time service. Part-time service must be credited in the proportion that the actual time worked compares to full-time service.

(23)”Position reportable to the retirement system” means a position in which an individual performs duties that would entitle the person to active membership in the retirement system under the provisions of 19-20-302.

(24)”Primary beneficiary” means a designated beneficiary with a first right to receive any benefit or refund of accumulated contributions payable upon the death of the individual authorized by law to make the designation.

(25)”Regular interest” means interest at a rate set by the retirement board in accordance with 19-20-501(2).

(26)”Retired”, “retired member”, or “retiree” means a person who is considered in retired member status under the provisions of 19-20-810.

(27)”Retirement allowance” or “retirement benefit” means a monthly payment due to a retired member who has qualified for service or disability retirement or due to a joint annuitant or beneficiary.

(28)”Retirement board” or “board” means the retirement system’s governing board provided for in 2-15-1010.

(29)”Retirement system”, “system”, or “plan” means the teachers’ retirement system of the state of Montana provided for in 19-20-102.

(30)”Service” means the performance of duties that would entitle the person to active membership in the retirement system under the provisions of 19-20-302.

(31)”Termination” or “terminate” means that the employment relationship between the member and the member’s employer has been terminated as required in 19-20-810.

(32)(a) “Termination pay” means any form of bona fide vacation leave, sick leave, severance pay, amounts provided under a window or early retirement incentive plan, or other payments contingent on the employee terminating employment.

(b)Termination pay does not include:

(i)amounts that are not wages under section 3121 of the Internal Revenue Code, determined without regard to the wage base limitation; and

(ii)amounts that are payable to a member from a plan for the deferral of compensation under section 457(f) of the Internal Revenue Code, 26 U.S.C. § 457(f).

(33)”Tier one member” means a person who became a member before July 1, 2013, and who has not withdrawn the member’s account balance.

(34)”Tier two member” means a person who became a member on or after July 1, 2013, or who, after withdrawing the member’s account balance, became a member again after July 1, 2013.

(35)”Vested” means that a member has been credited with at least 5 full years of membership service upon which contributions have been made and has a right to a future retirement benefit.

(36)”Written application” or “written election” means a written instrument, required by statute or the rules of the board, properly signed and filed with the board, that contains all the required information, including documentation that the board considers necessary.