19-20-101. Definitions. As used in this chapter, unless the context clearly indicates otherwise, the following definitions apply:
     (1) "Accumulated contributions" 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 fund, together with interest. Regular interest must be computed and allowed to provide a benefit at the time of retirement.
     (2) "Actuarial equivalent" means a benefit of equal value when computed, with regular interest, on the basis of the 1971 Group Annuity Mortality Table, with ages set back 4 years and an interest rate of 8% compounded annually.
     (3) "Average final compensation" means the average of a member's earned compensation during the 3 consecutive years of full-time service or as provided under 19-20-805 that yield the highest average and on which contributions have been made as required by 19-20-602 or 19-20-413. If amounts defined in subsection (6)(b) have been converted by an employer to earned compensation for all members and have been continuously reported as earned compensation in a like amount for at least the 5 fiscal years preceding the member's retirement, the amounts may be included in the calculation of average final compensation. If amounts defined in subsection (6)(b) have been reported as earned compensation for less than 5 fiscal years or if the member has been given the option to have amounts reported as earned compensation, any amounts reported in the 3-year period that constitute average final compensation must be included in average final compensation as provided under 19-20-716(2).
     (4) "Beneficiary" means a person formally designated by a member, retiree, or benefit recipient to receive a retirement allowance or payment upon the death of the member, retiree, or benefit recipient.
     (5) "Creditable service" is that service defined by 19-20-401.
     (6) (a) "Earned compensation" means, except as limited by 19-20-715, remuneration, exclusive of maintenance, allowance, and expenses, paid for services by a member out of funds controlled by an employer before any pretax deductions allowed under the Internal Revenue Code are deducted from the member's compensation.
     (b) Earned compensation does not mean:
     (i) direct employer premium payments on behalf of members for health or dependent care expense accounts or any employer contribution for health, medical, pharmaceutical, disability, life, vision, dental, or any other insurance;
     (ii) any direct employer payment or reimbursement for professional membership dues; maintenance; housing; day care; or automobile, travel, lodging, or entertaining expenses; or any similar payment for any form of maintenance, allowance, or expenses;
     (iii) the imputed value of health, life, or disability insurance or any other fringe benefits; or
     (iv) any noncash benefit provided by an employer to or on behalf of an employee.
     (c) Earned compensation does not include lump-sum payments in respect to unused, accumulated sick or annual leave, excess leave balance payments, or bonuses or any sort of early retirement incentive or severance payment contingent upon the employee terminating employment.
     (d) Adding a direct employer-paid or noncash benefit to an employee's contract or subtracting the same or like amount as a pretax deduction is considered a fringe benefit and not earned compensation.
     (7) "Employer" means the state of Montana, the trustees of a district, or any other agency or subdivision of the state that employs a person who is designated a member of the retirement system.
     (8) "Full-time service" means service that is full-time and that extends over a normal academic year of at least 9 months. With respect to those members employed by the office of the superintendent of public instruction, any other state agency or institution, or the office of a county superintendent, full-time service means service that is full-time and that totals at least 9 months in any year.
     (9) "Member" means a person who has an individual account in the annuity savings fund. An active member is a person included under the provisions of 19-20-302. An inactive member is a person included under the provisions of 19-20-303.
     (10) "Part-time service" means service that is less than full-time or that totals less than 9 months in a normal academic year. Part-time service must be credited in the proportion that the actual time worked compares to full-time service.
     (11) "Prior service" means employment of the same nature as service but rendered before September 1, 1937.
     (12) "Regular interest" means interest at 4% a year compounded annually or at a rate as may be set by the retirement board in accordance with 19-20-501(2).
     (13) "Retirement allowance" means a payment due monthly to a person who has qualified for service or disability retirement or due to a beneficiary as provided in 19-20-1001.
     (14) "Retirement board" or "board" means the retirement system's governing board provided for in 2-15-1010.
     (15) "Retirement system" or "system" means the teachers' retirement system of the state of Montana provided for in 19-20-102.
     (16) "Service" means the performance of instructional duties or related activities that would entitle the person to active membership in the retirement system under the provisions of 19-20-302.
     (17) "Termination" means that the member has severed the employment relationship with the member's employer and all, if any, payments due upon termination of employment, including but not limited to accrued sick and annual leave balances, have been paid to the member.
     (18) "Termination pay" means any form of termination pay made at the time of retirement or death; payments contingent on the employee terminating employment; any lump-sum payment for deferred compensation, sick leave, or accumulated vacation credit; or any other payment for time not worked other than compensation received while on sick leave or authorized leave of absence.
     (19) "Vested" means that a member has been credited with at least 5 full years of membership service upon which contributions have been made, as required by 19-20-602 and 19-20-605, and who has a right to a future retirement benefit.

     History: En. 75-6201 by Sec. 96, Ch. 5, L. 1971; amd. Sec. 21, Ch. 326, L. 1974; amd. Sec. 1, Ch. 26, L. 1975; amd. Sec. 1, Ch. 127, L. 1977; amd. Sec. 1, Ch. 331, L. 1977; R.C.M. 1947, 75-6201(part); amd. Sec. 1, Ch. 446, L. 1981; amd. Sec. 1, Ch. 453, L. 1983; amd. Sec. 1, Ch. 224, L. 1985; amd. Sec. 6, Ch. 464, L. 1985; amd. Sec. 2, Ch. 45, L. 1987; amd. Sec. 1, Ch. 56, L. 1989; amd. Sec. 1, Ch. 331, L. 1989; amd. Sec. 2, Ch. 13, L. 1991; Sec. 19-4-101, MCA 1991; redes. 19-20-101 by Code Commissioner, 1993; amd. Sec. 2, Ch. 111, L. 1995; amd. Sec. 5, Ch. 442, L. 1997.