Updated October 30, 2026. Quick answer: Montana PERS pays its Guaranteed Annual Benefit Adjustment (GABA) every January 1 to retirees whose benefit began at least 12 months earlier, subject to the statute’s rule on other adjustments already received. The rate is 3% for members hired before July 1, 2007 (and for some hired from July 1, 2007 to before July 1, 2013 whose own system provides a 3% adjustment) and 1.5% for the other members hired in that window. For members hired on or after July 1, 2013 the June 30, 2025 valuation reported 0.80%, and the June 30, 2026 valuation reports 0.90%. The January 2027 rate is not set yet by an MPERA notice.
How the GABA works
Montana law says: “on January 1 of each year, the permanent monthly benefit payable during the preceding January to each recipient who is eligible under subsection (3) must be increased by the applicable percentage provided in subsection (4).” On eligibility it says: “a benefit recipient is eligible for and must receive the minimum annual benefit adjustment provided for in this section if the benefit’s commencement date is at least 12 months prior to January 1 of the year in which the adjustment is to be made.”
Three rates by hire date
The statute sets the rate by hire date. The top rate is “The applicable percentage increase under subsection (1) is 3% if the member was hired or assumed office: (i) before July 1, 2007; or (ii) on or after July 1, 2007, and before July 1, 2013, and the benefit recipient is a member of a retirement system provided for in this title, and the guaranteed annual benefit adjustment provision for that member under that system is a 3% benefit increase.” The middle rate is “The applicable percentage increase under subsection (1) is 1.5% if the member was hired or assumed office on or after July 1, 2007, and before June 30, 2013, and the benefit recipient is not otherwise covered under subsection (4)(a)(ii).” For members hired later, “The applicable percentage increase under subsection (1) is 1.5% if the member was hired or assumed office on or after July 1, 2013, subject to reduction as provided in subsection (5).”
The reduction works like this: “if the most recent actuarial valuation of the retirement system shows that retirement system liabilities are less than 90% funded, the applicable percentage increase in subsection (4)(c) must be reduced by 0.1% for each 2% below that 90% funding level.” “If the amortization period is 40 years or greater, the applicable percentage increase in subsection (4)(c) must be reduced to 0% and the retirement allowance may not be increased.”
The latest reported rates
The actuary’s valuation report as of June 30, 2025, dated September 30, 2025, states: “Since the System amortizes within 23 years which is less than 40 years, the GABA for members hired on or after July 1, 2013 will be 0.80%.” The report as of June 30, 2026, dated September 23, 2026, states: “Since the System amortizes within 22 years which is less than 40 years, the GABA for members hired on or after July 1, 2013 will be 0.90%.” It gives the funded ratio behind that rate: “The funded ratio for this purpose is 76.16%.”
Both reports say the GABA is as of January 1st and neither prints the year. The statute applies the most recent valuation, so the 2025 report points to January 2026 and the 2026 report to January 2027, an inference rather than a printed date.
Where 2027 stands
The January 2027 GABA for members hired on or after July 1, 2013 is not set yet by an MPERA notice: the June 30, 2026 valuation report lists 0.90% but prints January 1st without a year, and this page confirms the January 2027 rate when MPERA does.
The 3% and 1.5% rates in the statute’s subsections (4)(a) and (4)(b) do not move with the valuation; only the rate for members hired on or after July 1, 2013 is reduced by the funding and amortization tests. The MPERA GABA page prints no current percentage.
A worked example
As a computed illustration (not a source figure), a retiree with a monthly benefit of $2,000 (invented, for the computation) in the 3% group would see an increase of $60 (computed) a month, and in the 1.5% group $30 (computed) a month. If the 0.90% reported for later hires applies, the increase would be $18 (computed) a month.
Common mistakes
- Applying the 3% rate to every Montana PERS retiree. It depends on the hire date, and members hired on or after July 1, 2013 get a variable rate.
- Expecting a GABA in the first year. The retiree needs the benefit for at least 12 months before the first January increase.
- Treating 0.90% as an MPERA announcement. It appears in the actuary’s June 30, 2026 valuation report, which prints no year for January 1st.
Related: Montana PERS retirement decisions, how public pension decisions work, and whether Montana taxes pensions.
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Answer againSources
- Montana Legislature, Montana Code Annotated 19-3-1605 Guaranteed annual benefit adjustment (MCA 2025): mca.legmt.gov
- Public Employees’ Retirement Board (Cavanaugh Macdonald), posted by MPERA, PERS Actuarial Valuation Report prepared as of June 30, 2025: mpera.mt.gov
- Public Employees’ Retirement Board (Cavanaugh Macdonald), posted by MPERA, PERS Actuarial Valuation Report prepared as of June 30, 2026: mpera.mt.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.