Guaranteed Annual Benefit Adjustment (GABA) Lawsuit

TRS will provide updated information on this web page, as appropriate, as this litigation develops.

If you have questions regarding the impact of the lawsuit on your TRS benefits, please contact TRS.
If you have questions regarding the plaintiff's arguments or objectives in filing the lawsuit, please direct your questions to MEA-MFT.

August 21, 2015

The Attorney General's (AG) Office, on behalf of the State and TRS, entered into a settlement agreement that upholds Judge Menahan's decision in Byrne v. State of Montana. The agreement includes a stipulation that the AG's office will not appeal the decision to the Supreme Court and the plaintiffs have waived any claim for attorney fees. This means that eligible Tier One members of TRS (hired prior to July 1, 2013) will continue to receive a 1.50% GABA on January 1 of each year. Eligible Tier Two members of TRS (hired on or after July 1, 2013) will receive a variable GABA ranging from a minimum of 0.50% to a maximum of 1.50% on January 1 of each year depending on the funded status of the plan.

July 1, 2015

On June 30, 2015, District Court Judge Mike Menahan ruled in favor of the plaintiffs in Byrne v. State of Montana. The court found that the GABA is part of TRS benefits and is subject to protection under the 'contracts clause' of the Montana Constitution.

The Order On Motions For Summary Judgement states, "The 2013 Legislature passed a law that unnecessarily reduced pension benefits for school teachers and other public education professionals. The undisputed facts in this case demonstrate that increased contributions borne by workers, employers, and the State, which is the guarantor of the TRS, brought the system back to actuarial soundness without cutting any benefits." The court ruled that the GABA will remain at 1.50% for TRS Tier One members. The adjustable GABA (rate determined based on the funding status of the system) will apply to TRS Tier Two members (members hired on or after July 1, 2013). If you are interested in reading the 22 page Order, you can link here to the pdf file.

At this point, the State has the option to appeal the decision to the Montana Supreme Court. We will notify you of any updates to this case on this page.

May 15, 2015

Judge Menahan heard oral arguments on the cross-motions for summary judgment filed by both the Plaintiffs and the State on Thursday, March 5, 2015, at 2:00 p.m. As of this date, there are no further updates.

January 28, 2015

Judge Menahan will hear oral arguments on the cross-motions for summary judgment filed by both the Plaintiffs and the State on Thursday, March 5, 2015, at 2:00 p.m. The trial date, originally set to begin on March 9, 2015, has been vacated pending Judge Menahan’s decision on the motions for summary judgment. If Judge Menahan finds that all issues in the lawsuit cannot be decided by summary judgment, a new trial date will be set.

October 10, 2014

In October of 2013, several TRS active members and retirees filed a lawsuit (Byrne v. State of Montana) alleging the reduction to the TRS guaranteed annual benefit adjustment (GABA) enacted by the 2013 Montana Legislature as part of House Bill 377 and signed into law by Governor Bullock is unconstitutional. Attorney General Tim Fox represents the State of Montana, including TRS, in the litigation.

The case is pending before Judge Mike Menahan in the First Judicial District Court (Lewis and Clark County), and is currently scheduled for a two day bench trial beginning March 9, 2015. On July 25, 2014, the Plaintiffs filed a motion and supporting brief seeking summary judgment. A motion for summary judgment is a party's argument that there are no issues of material fact to be determined at trial and that applicable law requires a decision in the party's favor. If all of the issues raised in a case are resolved by the court through summary judgment, no trial is necessary.

Of course, a party to the litigation against whom summary judgment is requested has an opportunity to respond to the motion for summary judgment. On September 19, 2014, the State of Montana filed its own motion for summary judgment and filed a brief that is both the State's response to the Plaintiffs' motion for summary judgment and the State's brief in support of its own motion for summary judgment. The process of briefing the motions for summary judgment will continue for at least several more weeks. Once all briefs are submitted, Judge Menahan will review and consider the arguments of both parties and rule on the motions for summary judgment.

While Judge Menahan decision on the parties' motions for summary judgment could be his final decision, he could also determine that neither party has met its burden for summary judgment and order that the case proceed to trial in March 2015. Once Judge Menahan has issued his final decision in the case, whether by summary judgment or following trial, the party losing in district court will have the right to appeal the decision to the Montana Supreme Court. TRS will provide further updates on the status of the GABA litigation on this web page.

May 8, 2014

The case has been scheduled for a three-day bench trial to be heard by the Judge, without a jury. The trial will begin on March 9, 2015.

December 27, 2013

GABA Remains at 1.5% -- District Judge Mike Menahan has granted a preliminary injunction to MEA-MFT and six other plaintiffs. This prevents an an automatic reduction on January 1, 2014 in the Guaranteed Annual Benefit Adjustment (GABA) from 1.5% to 0.5%.

It is important to note: this ruling is temporary and only governs the GABA amount paid January 1, 2014 and each month thereafter until a final ruling on the merits of Byrne v. State of Montana has been issued.
If you have questions regarding the impact of this ruling or the lawsuit on your TRS benefits, please contact TRS.

December 4, 2013

The hearing for preliminary injunction regarding the decrease in GABA scheduled to take effect January 1, 2014 was held today before district court Judge Mike Menahan. The judge expects to have a ruling before the end of the year.

November 15, 2013

The Montana Attorney General (AG) is representing the State of Montana, TRS, and the TRS Board in the litigation filed on October 16th.
Along with the complaint, the plaintiffs filed a Motion for a Preliminary Injunction to prevent the GABA adjustments from being implemented pending a final decision in the litigation. The AG has filed a response to the motion and a hearing is currently scheduled for December 4, 2013.

October 16, 2013

The State of Montana, along with TRS and its Board, were named as defendants in a lawsuit filed on October 11, 2013.

The plaintiffs claim a provision of law passed by the 2013 Montana Legislature as part of House Bill 377, which allows incremental reduction of the TRS GABA based on the funding status of the retirement system, violates constitutional rights of TRS members under the contract rights and takings clauses of the Constitution of the State of Montana.
The plaintiffs -- six individuals and MEA-MFT -- have asked the Montana First Judicial District Court to declare that section of law unconstitutional.