# Mont. Code Ann. § 19-2-1005: 19-2-1005 Compensation limit

> Montana · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1005

## Section

- **Citation:** Mont. Code Ann. § 19-2-1005
- **Heading:** 19-2-1005 Compensation limit
- **Jurisdiction:** Montana
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** MT Code / Title 19 / Chapter 2 / Part 10 / Section 19-2-1005

## Text

19-2-1005 . Compensation limit. (1) A retirement system or plan subject to this chapter may not take into account compensation of a member in excess of the amount permitted in section 401(a)(17) of the Internal Revenue Code, 26 U.S.C. 401(a)(17), as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Internal Revenue Code, 26 U.S.C. 401(a)(17)(B).

(2) (a) Except as provided in subsection (2)(b), for a member hired on or after July 1, 2013, when calculating the highest average compensation or final average compensation for a member with at least the applicable 48 or 72 months of service credit, a retirement system or plan subject to this chapter may not include the following amounts of excess earnings in the calculation of the member's highest average compensation or final average compensation:

(i) for the first year included in the calculation, any compensation that is greater than 110% of the compensation paid to the member in the previous year; and

(ii) for each subsequent year included in the calculation, any compensation that is greater than 110% of the compensation included in the calculation for the previous year.

(b) In determining a member's retirement benefit, total excess earnings, if any, must be divided by the member's total months of service credit and added to each month's compensation included in the member's highest average compensation or final average compensation as limited under subsection (2)(a).

## Nearby sections

- [Mont. Code Ann. § 19-2-1001 19-2-1001 Maximum contribution and benefit limitations](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1001.md)
- [Mont. Code Ann. § 19-2-1002 19-2-1002 Termination of plan](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1002.md)
- [Mont. Code Ann. § 19-2-1003 19-2-1003 Transfer of dormant, nonvested member-accumulated contributions](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1003.md)
- [Mont. Code Ann. § 19-2-1004 19-2-1004 Exemption from taxes and legal process](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1004.md)
- [Mont. Code Ann. § 19-2-1005 19-2-1005 Compensation limit](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1005.md)
- [Mont. Code Ann. § 19-2-1006 19-2-1006 Use of forfeitures](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1006.md)
- [Mont. Code Ann. § 19-2-1007 19-2-1007 Required distributions](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1007.md)
- [Mont. Code Ann. § 19-2-1008 19-2-1008 Budget Act superseded](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1008.md)
- [Mont. Code Ann. § 19-2-1009 19-2-1009 Penalty for fraud](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1009.md)
- [Mont. Code Ann. § 19-2-1010 19-2-1010 Retaining qualified plan status -- content of plan document -- board rulemaking authority](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1010.md)
- [Mont. Code Ann. § 19-2-1011 19-2-1011 Limitations on eligible rollover distributions](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1011.md)
- [Mont. Code Ann. § 19-2-1013 19-2-1013 Compliance with federal restrictions on interest rate crediting](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1013.md)
- [Mont. Code Ann. § 19-2-1014 19-2-1014 Compliance with federal laws regarding service in uniformed services](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1014.md)
- [Mont. Code Ann. § 19-2-1015 19-2-1015 Probate and nonprobate transfer statutes superseded](https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1015.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_MT_T19_C2_P10_S19-2-1005. Check the current official text before relying on it. Not legal advice.