Current through Register Vol. 18, September 20, 2024
(1) An
incentive or bonus payment paid to a member is part of a series of annual
payments, and therefore included in earned compensation, only if:
(a) the incentive or bonus has been paid to
the member for at least five consecutive years;
(b) the employer publishes, in some official
manner (in board minutes, in a collective bargaining agreement, in employment
contracts, etc.):
(i) its intent to make the
incentive or bonus payments;
(ii)
who will receive the incentive or bonus payments;
(iii) the criteria for determining the award
and amount of the incentive and bonus payments with respect to all employees
and certification classes to receive the payments;
(iv) the anticipated duration of the
incentive or bonus payments;
(v)
the specific annual amount of the incentive or bonus payment or the specific
percentage of annual salary by which the incentive or bonus payment will be
calculated;
(vi) how the incentive
or bonus payments will be made (annually, monthly, etc.); and
(vii) the date by which the payment will be
made.
(c) the incentive
or bonus payment amount in each year is the same or is subject to fluctuation
only if the payment is determined as a percentage of annual salary, in which
case, the percentage increase in annual salary is the same in each year for all
employees of the certification class (teacher, administrator, or
superintendent);
(d) continuation
of the incentive or bonus payment is relatively certain and not subject to
budgetary discretion, revenue stream factors, or award or payment criteria that
puts the payment at any greater risk of nonpayment than the base salary;
and
(e) eligibility criteria and
payment calculation methodologies do not weight the award of or amount of
incentive or bonus payments in a manner that disproportionately increases
compensation to employees based on years of service or age, including that:
(i) if an incentive or bonus is paid to one
employee of a certification class, the incentive or bonus must be paid to every
member of that certification class; and
(ii) the amount of the incentive or bonus
paid to each employee of a certification class must be the same, except that
the incentive or bonus payment amount paid to each member of the certification
class may be calculated as a percentage of each employee's annual salary, in
which case, the percentage of annual salary to be calculated must be the same
for all employees of the certification class.
(2) If incentive or bonus payments that are
otherwise part of a series of annual payments have not been paid to a member
for at least five consecutive years at the time the member retires, any amounts
reported in the three-year period that constitutes a member's average final
compensation will be included in average final compensation as termination pay
Option 2 as provided under
19-20-716, MCA.
(3) An employer who wants incentive and bonus
payments that are part of a series of annual payments included as part of the
earned compensation of its employee(s) should submit the published information
described in (1)(b) to the Teachers' Retirement System for review prior to
submitting contributions for those compensation amounts.
(4) As used in this rule, "annual salary"
means the salary to be paid to a member of the Teachers' Retirement System in a
particular year as set forth in the employer's salary schedule or in a written
employment agreement, without consideration for pay for additional duties,
bonuses, incentives, fringe benefits, or other additions to
remuneration.
(5) Bonus and
incentive payments that are part of a series of annual payments are subject to
the 110% cap set forth in
19-20-715, MCA, and administrative
rules clarifying
19-20-715, MCA.
