Administrative Rules of the State of Montana

BEFORE THE PUBLIC EMPLOYEES' RETIREMENT BOARD

OF THE STATE OF MONTANA

In the matter of the amendment of ARM 2.43.3502 pertaining to the Defined Contribution Retirement Plan Investment Policy Statement and the Montana Fixed Fund Investment Policy Statement and ARM 2.43.5102 pertaining to the 457(b) Deferred Compensation Plan Investment Policy Statement and the Montana Fixed Fund Investment Policy Statement

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NOTICE OF PROPOSED AMENDMENT

NO PUBLIC HEARING CONTEMPLATED

TO: All Concerned Persons

1. On May 1, 2021, the Public Employees' Retirement Board proposes to amend the above-stated rules.

2. The Public Employees' Retirement Board will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Montana Public Employee Retirement Administration no later than 5:00 p.m. on March 22, 2021, to advise us of the nature of the accommodation that you need. Please contact Kris Vladic, Montana Public Employee Retirement Administration, P.O. Box 200131, Helena, Montana, 59620-0131; telephone (406) 444-2578; fax (406) 444-5428; TDD (406) 444-1421; or e-mail [email protected].

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

2.43.3502 ADOPTION OF INVESTMENT POLICY STATEMENT AND FIXED FUND INVESTMENT POLICY STATEMENT (1) The board adopts and incorporates by reference the State of Montana 401(a) Defined Contribution Plan Investment Policy Statement approved by the board on February ~~13, 2020~~ 11, 2021. The Investment Policy Statement provides investment guidelines for the defined contribution plan, a long-term retirement-savings vehicle that permits participants to invest employer and participant contributions on a tax-deferred basis. The investment guidelines help the board to meet its fiduciary responsibilities to evaluate and positively influence the direction of the plan and its investments for the benefit of the plan participants and beneficiaries.

(2) The board adopts and incorporates by reference the Montana Fixed Fund Investment Policy Statement approved by the board on ~~April 11, 2019~~ February 11, 2021. These guidelines apply to the investment of 401(a) defined contribution plan participant assets and 457(b) deferred compensation plan participant assets that are pooled together in the plans' stable value group trust. The investment policy statement was developed through mutual agreement amongst the board, the investment manager, and the insurance wrap providers and provides guidance to the investment manager when investing participants' funds contained within the stable value group trust.

(3) remains the same.

AUTH: 19-3-2104, MCA

IMP: 19-3-2104, 19-3-2122, MCA

2.43.5102 ADOPTION OF INVESTMENT POLICY STATEMENT AND FIXED FUND INVESTMENT POLICY STATEMENT (1) The board adopts and incorporates by reference the State of Montana 457 Plan (deferred compensation) Investment Policy Statement approved by the board on February ~~13, 2020~~ 11, 2021. The Investment Policy Statement provides investment guidelines for the 457(b) deferred compensation plan, a supplemental retirement-savings vehicle that permits participants to invest on either a pre-tax or a tax-deferred basis. The investment guidelines help the board to meet its fiduciary responsibilities to evaluate and positively influence the direction of the plan and its investments for the benefit of the plan participants and beneficiaries.

(3) remains the same.

AUTH: 19-50-102, MCA

IMP: 19-50-102, MCA

REASON: The Public Employees' Retirement Board, as administrator of the Public Employees' Retirement System Defined Contribution Retirement Plan (DCRP) and the State of Montana's 457(b) Deferred Compensation Plan (457 Plan), adopted the two plans' original investment policy statements in 2002. The investment policy statements are reviewed on a yearly basis and amended to reflect best practices in defined contribution plan investments.

In addition, the board adopted the most recent version of the Montana Fixed Fund Investment Policy Statement on February 11, 2021, to apply to the investment of 401(a) defined contribution plan participant assets and 457(b) deferred compensation plan participant assets that are pooled together in the plans' stable value group trust. This investment policy statement is currently reviewed on a yearly basis and amended to reflect best practices in defined contribution plan investments.

Pursuant to the recommendation of the board's investment consultant, RVK, and the board's advisory committee, the Employee Investment Advisory Council, the board amended each of the above-referenced investment policy statements on February 11, 2021.

Because the board determined to adopt the original DCRP Investment Policy Statement, 457 Plan Investment Policy Statement, and Montana Fixed Fund Investment Policy Statement by reference, 2-4-307(4), MCA, requires that changes to each document also be adopted by reference. Therefore, it is necessary to amend the rules that adopt each investment policy statement to indicate the version being adopted by reference.

The investment policy statements are available on the board's web page at mpera.mt.gov.

4. Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to: Montana Public Employee Retirement Administration, P.O. Box 200131, Helena, Montana, 59620-0131; telephone (406) 444-3154; fax (406) 444-5428; or e-mail [email protected], and must be received no later than 5:00 p.m., March 29, 2021.

5. If persons who are directly affected by the proposed amendments wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request along with any written comments they have to Kris Vladic at the above address no later than 5:00 p.m., March 29, 2021.

6. If the Public Employees' Retirement Board receives requests for a public hearing on the proposed amendments from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed amendment; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date. Notice of the hearing will be published in the Montana Administrative Register. Ten percent of those directly affected has been determined to be 1,454 persons based on approximately 4,645 participants in the Defined Contribution Retirement Plan and 9,984 participants in the 457(b) Deferred Compensation Plan as of June 30, 2020, for a total of 14,359 participants.

7. The Public Employee Retirement Administration maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 5 above or may be made by completing a request form at any rules hearing held by the Montana Public Employee Retirement Administration.

8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

9. With regard to the requirements of 2-4-111, MCA, the Public Employees' Retirement Board has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.

/s/ William Holahan /s/ Sheena Wilson

William Holahan Sheena Wilson

Chief Legal Counsel President

and Rule Reviewer Public Employees' Retirement Board

Certified to the Secretary of State February 16, 2021.