SS SCS HS HCS HB 1455 & 1463 -- RETIREMENT SYSTEMS

The bill affects St. Louis police and firefighters retirement
systems, Kansas City police and civilian police employees
retirement systems, County Employees' Retirement Fund (CERF),
Local Government Employees' Retirement System (LAGERS), and the
Missouri State Employees' Retirement System (MOSERS).

ST. LOUIS POLICE

Effective October 1, 1998, ordinary disability retirement
allowances will be increased by 15%, rather than the current
10%, of the member's final average compensation for each
unmarried dependent child.  The combined benefit for disability
will not exceed 70%, rather than the current 55%.  Members
receiving disability retirement benefits October 1, 1998, will
receive an additional benefit the greater of $100 or 5% of the
member's average final compensation for each unmarried dependent
child, up to 3.  For the death of a member in service and for
death of a retired member, the widow's pension is increased from
25% to 35% of the member's average final compensation, effective
October 1, 1998, and to 40% effective October 1, 2001; plus 15%,
rather than the current 10%, for each unmarried dependent
child.  Such widows and dependent children receiving benefits
October 1, 1998, will receive increases as follows: (1)
dependent children will receive the greater of $100 or 5% of
average final compensation; and (2) a widow will receive an
additional payment that will increase the payment to 35% of the
deceased member's average final compensation, effective October
1, 1998, and to 40% effective October 1, 2001.  Benefits for
dependent children of a member who died in the line of duty are
increased from 10% to 15% of average final compensation, and
those already receiving benefits October 1, 1998, will receive
the greater of $100 or 5% of the deceased member's average final
compensation.  Special consultants and surviving spouses who are
special consultants currently receiving $550 per month will get
$650 per month.

New provisions are added to the deferred retirement option plan
(DROP) that permit the widow or unmarried dependent children of
a member participating in the DROP program who died in the line
of duty to elect to have the amount in the DROP account paid as
a monthly annuity.  Payment to a widow continues for life;
payment to a child continues as long as the child is an
unmarried dependent.

Currently members' annual benefits are limited to the lesser of
(1) the amount specified in the section 415(b) of the Internal
Revenue Code on the last day of the plan year; or (2) 100% of
average taxable compensation for the member's 3 consecutive
highest calendar years.  The bill deletes the latter
alternative.  Currently, the combined plan limitation of section
415(e) must not be exceeded; the bill makes the limitation
effective only for plan years beginning before January 1, 2000.

ST. LOUIS FIREFIGHTERS

Any member may elect upon retirement to place in his or her DROP
account an amount equivalent to accumulated sick leave hours
multiplied by hourly pay rate at the time of retirement.  Credit
for sick leave for working members will be earned at a rate no
less than the rate of June 1, 1998, rather than the rate of
August 28, 1989.

KANSAS CITY POLICE

Beneficiaries and survivors of members are not currently
considered members of the retirement system; the bill specifies
that the surviving spouse of a member who is entitled to a
pension benefit is considered a member as long as he or she is
eligible for the pension.  The minimum monthly pension for
members retiring after August 28, 1998, with at least 25 years
of service or retiring from an accident or illness occurring in
the line of duty is set at no less than $600, including any
supplemental retirement benefits and cost-of-living adjustments
(COLAs).  Members already retired are made special consultants,
compensated so that the aggregate, including COLAs and
supplemental benefits, received will be no less than $600.  The
surviving spouse of a member with 25 years of service or one who
retires as a result of accident or illness in the course of duty
is entitled to the $600 minimum, and surviving spouses of such
members who died on or before August 28, 1998, are made special
consultants under the same terms.

The base pension for the surviving spouse of a member who dies
in service is set at 40% of the member's final compensation,
subject to subsequent adjustments.  If a member retires and dies
after benefits commence, the surviving spouse receives 80%,
including COLAs but excluding supplemental retirement benefits;
the surviving spouse of a member who retires before August 28,
1998, and dies after August 28, 1998, will be a special
consultant, with the 80% benefit and COLA but excluding
supplemental benefits.  Commencement of benefits is defined as
the time when all requirements are met entitling the member to
payment of benefits, so that a member who dies after completing
the requirements but before actually receiving a payment will be
considered to have commenced benefits.  All benefits for
surviving spouses under section 86.447 terminate upon their
remarriage.

The retirement board may designate depository banks.  Members of
the retirement board are prohibited from having an interest in
investment transactions and from benefiting directly or
indirectly from board investments.  Technical requirements for
holding and handling securities are specified.

KANSAS CITY POLICE CIVILIAN EMPLOYEES

A terminated member with 5 or more years of service who retires
after August 28, 1998, and allows his or her contributions to
remain in the fund is entitled to receive a pension on the
normal retirement date or a reduced pension before the normal
retirement date.  The amount of an early pension must be
computed on the basis of the member's final compensation and
years of creditable service before leaving employment.  Such
members who retired before August 28, 1998, and allowed their
contributions to remain in the fund are compensated as special
consultants, entitled to COLAs.  Currently, certain retired
members become eligible to be compensated for a supplemental
retirement health insurance benefit on August 28, 1996, or at
the time of appointment as a special consultant, whichever
occurs later.  The date is changed from 1996 to 1998.

As in the police system, surviving spouses are considered
members of the system as long as they are eligible for pension
benefits.  The investment fund provisions are modified to be the
same as those of the police system.

CHAPTER 86 (POLICE AND FIRE)

The bill makes a technical amendment regarding the application
of the Hancock amendment to the entire chapter.

COUNTY EMPLOYEES' RETIREMENT FUND

Any county employee employed on January 1, 1989, and not
employed on August 28, 1994, who had prior service for at least
8 years may become a special consultant, with compensation that
permits the consultant to become a member of the system and
purchase prior service.  Conditions for the purchase of service
are specified.

LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM

Retired members may return to work in a covered position and
receive additional service credit after one year.  During re--
employment, the member receives no monthly benefit and must make
contributions.  Currently a member who is also eligible for
benefits under the prosecuting attorneys retirement system will
receive benefits from the prosecuting attorneys system reduced
by the amount of the LAGERS benefit.  This bill cuts the
reduction to one-third of the LAGERS benefit.

MISSOURI STATE EMPLOYEES' RETIREMENT SYSTEM

Any state employee or official holding employment on August 28,
1998, who has service pursuant to section 104.345, concerning
circuit clerks, is entitled to creditable prior service for
service as a county employee if satisfactory proof is given to
the board.  Any state employee or official holding employment on
August 28, 1998, who served as an elected county official is
entitled to creditable prior service as an elected county
official under specified conditions.  Retired employees who are
or have been employed by the legislature are not considered as
employees unless they elect in advance of such service to have
the service considered as creditable service.  Legislators will
receive a monthly retirement benefit of $200, rather than the
current $150 times the number of biennial assemblies served.
Legislators who serve after the age of 55, rather than the
current 65, will receive in addition to their normal annuity an
amount equal to the total of all COLAs the members would have
received during the years between reaching 55 and the year the
legislator terminates employment or dies.  Several new
categories of special consultants are created, and language on
an existing special consultant category is clarified.

The sections of the bill pertaining to St. Louis firefighters
and part-time legislative employees have emergency clauses.

HS HCS HB 1455 & 1463 -- ST. LOUIS AND KANSAS CITY POLICE AND
FIREFIGHTER RETIREMENT (O'Toole)

The substitute affects St. Louis police and firefighter
retirement benefits and Kansas City police and civilian police
employee benefits.

ST. LOUIS POLICE.  Effective October 1, 1998, ordinary
disability retirement allowances will be increased by 15%,
rather than the current 10%, of the member's final average
compensation for each unmarried dependent child.  The combined
benefit for disability will not exceed 70%, rather than the
current 55%.  Members receiving disability retirement benefits
immediately prior to October 1, 1998, will receive an additional
benefit the greater of $100 or 5% of the member's average final
compensation for each unmarried dependent child.  For the death
of a member in service and for death of a retired member, the
widow's pension is increased from 25% to 40% of the member's
average final compensation plus 15%, rather than the current
10%, for each unmarried dependent child.  Widows and dependent
children receiving benefits immediately prior to October 1,
1998, will receive increases as follows: (1)  dependent children
will receive the greater of $100 or 5% of average final
compensation; (2)  a widow of member who died in service will
receive an additional payment of 15% of the deceased member's
average final compensation; and (3)  a widow of a member who
died after retirement will get an increase that brings the
benefit level to 40% of the deceased member's compensation.
Benefits for dependent children of a member who died as the
result of an accident in the line of duty are increased from 10%
to 15% of average final compensation, and such dependent
children already receiving benefits immediately prior to October
1, 1998, will receive the greater of $100 or 5% of the deceased
member's average final compensation.

New provisions are added to the deferred retirement option plan
(DROP) that permit the widow or unmarried dependent children of
a member participating in the DROP program who died in the line
of duty to elect to have the amount in the DROP account paid as
a monthly annuity.  Payment to a widow continues for life;
payment to a child continues as long as the child is an
unmarried dependent.

Currently members' annual benefits are limited to the lesser of
(1) the amount specified in the section 415(b) of the Internal
Revenue Code on the last day of the plan year or (2) 100% of
average taxable compensation for the member's 3 consecutive
highest calendar years.  The substitute deletes the latter
alternative.  Currently, the combined plan limitation of section
415(e) must not be exceeded; the substitute makes the limitation
effective only for plan years beginning before January 1, 2000.

ST. LOUIS FIREFIGHTERS.  Any member working on or after June 1,
1998, will be allowed to place in his or her DROP account an
amount equivalent to accumulated sick leave hours multiplied by
hourly pay rate at the time of retirement.

KANSAS CITY POLICE.  Beneficiaries and survivors of members are
not currently considered members of the retirement system; the
substitute specifies that the surviving spouse of a member who
is entitled to a pension benefit is considered a member as long
as he or she is eligible for the pension.  The minimum pension
for members retiring after August 28, 1998, with at least 25
years of service or retiring from an accident or illness
occurring in the line of duty is set at $600, including any
supplemental retirement benefits and cost-of-living adjustments
(COLAs).  Members already retired are made special consultants,
compensated so that the aggregate, including COLAs and
supplemental benefits, received will be no less than $600.  The
surviving spouse of a member with 25 years of service or one who
retires as a result of accident or illness in the course of duty
is entitled to the $600 minimum, and surviving spouses of such
members who died on or before August 28, 1998, are made special
consultants under the same terms.

The base pension for the surviving spouse of a member who dies
in service is set at 40% of the member's final compensation,
subject to subsequent adjustments.  If a member retires and dies
after benefits commence, the surviving spouse receives 80%,
including COLAs but excluding supplemental retirement benefits;
the surviving spouse of a member who retires before August 28,
1998, and dies after August 28, 1998, will be a special
consultant, with the 80% benefit and COLA but excluding
supplemental benefits.  Commencement of benefits is defined as
the time when all requirements are met entitling the member to
payment of benefits, so that a member who dies after completing
the requirements but before actually receiving a payment will be
considered to have commenced benefits.  All benefits for
surviving spouses under section 86.447 (dependents of deceased
members) terminate upon their remarriage.

The retirement board may designate depository banks.  Members of
the retirement board are prohibited from having an interest in
investment transactions and from benefiting directly or
indirectly from board investments.  Securities may be held by a
custodian in bearer or book entry form.  Eligible securities may
be deposited in a central depository, clearing corporation, or
federal reserve bank under a book entry system.  Securities
deposited in this manner may be merged and title transferred
without physical delivery of the documents.

KANSAS CITY POLICE CIVILIAN EMPLOYEES.  A member with 5 or more
years of service who retires after August 28, 1998, and allows
his or her contributions to remain in the fund is entitled to
receive a pension on the normal retirement date or a reduced
pension before the normal retirement date.  The amount of a
pension commenced early must be computed on the basis of the
member's final compensation and years of creditable service
before leaving employment.  Members who retired before August
28, 1998, and allowed their contributions to remain in the fund
are compensated as special consultants, entitled to COLAs.
Currently, certain members become eligible to be compensated for
a supplemental retirement health insurance benefit on August 28,
1996, or at the time of appointment as a special consultant,
whichever occurs later.  The date is changed from 1996 to 1998.

As in the police system, surviving spouses are considered
members of the system as long as they are eligible for pension
benefits.  The investment fund provisions are modified to be the
same as those of the police system.

The section of the substitute pertaining to St. Louis
kfirefighters has an emergency clause.

FISCAL NOTE:  Costs to General Revenue Fund is $0 in FY 1999, $0
to $2,900,000 in FY 2000 and 2001.  Depends on applicability of
Article X, Section 21 of the Missouri Constitution.

HCS HB 1455 & 1463 -- ST. LOUIS POLICE AND FIREFIGHTER RETIREMENT

SPONSORS:  Hagan-Harrell (O'Toole)

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Retirement by a vote of 11 to 0.

The substitute affects St. Louis police and firefighter
retirement benefits.

POLICE.  Currently members' annual benefits are limited to the
lesser of (1)  the amount specified in the section 415(b) of the
Internal Revenue Code on the last day of the plan year or (2)
100% of average taxable compensation for the member's 3
consecutive highest calendar years.  The substitute deletes the
latter alternative.  Currently, the combined plan limitation of
section 415(e) must not be exceeded; the substitute makes the
limitation effective only for plan years beginning before
January 1, 2000.

Effective October 1, 1998, ordinary disability retirement
allowances will be increased by 15%, rather than the current
10%, of the member's final average compensation for each
unmarried dependent child.  The combined benefit for disability
will not exceed 70%, rather than the current 55%.  Members
receiving disability retirement benefits immediately prior to
October 1, 1998, will receive an additional benefit the greater
of $100 or 5% of the member's average final compensation for
each unmarried dependent child.  For the death of a member in
service and for death of a retired member, the widow's pension
is increased from 25% to 50% of the member's average final
compensation plus 15%, rather than the current 10%, for each
unmarried dependent child.  Widows and dependent children
receiving benefits immediately prior to October 1, 1998, will
receive increases as follows: (1) dependent children will
receive the greater of $100 or 5% of average final compensation;
(2)  a widow of member who died in service will receive an
additional payment of 15% of the deceased member's average final
compensation; and (3)  a widow of a member who died after
retirement will get an increase that brings the benefit level to
50% of the deceased member's compensation.  Benefits for
dependent children of a member who died as the result of an
accident are increased from 10% to 15% of average final
compensation, and dependent children already receiving benefits
immediately prior to October 1, 1998, will receive the greater
of $100 or 5% of the deceased member's average final
compensation.

Beginning January 1, 1999, retired members serving as special
advisors will receive compensation of $20 per month, rather than
the current $10, multiplied by the number of years the retired
member's age exceeds 60.

New provisions are added to the deferred retirement option plan
(DROP) that permit the widow or unmarried dependent children of
a member participating in the DROP program who died in the line
of duty to elect to have the amount in the DROP account paid as
a monthly annuity.  Payment to a widow continues for life;
payment to a child continues as long as the child is an
unmarried dependent.

FIREFIGHTERS.  Any member working on or after June 1, 1998, will
be allowed to place in his or her DROP account an amount
equivalent to accumulated sick leave hours multiplied by hourly
pay rate at the time of retirement.

The section of the bill pertaining to firefighters has an
emergency clause.

FISCAL NOTE:  Cost to General Revenue Fund is $0 in FY 1999, $0
to $6,300,000 in FY 2000 and FY 2001.

PROPONENTS:  Supporters of HB 1455 say that the substitute
raises widows' benefits from their current level of 25%.  The
city had agreed to 35%, but the substitute brings all widows'
benefits level at 50% (currently, only the widow of a death-in--
service member gets 50%).  In the last 6 years, the city has
made no contributions to the police retirement fund.  St. Louis
is the only major city in this situation.

Supporters of HB 1463 say that there are 499 St. Louis police
retirees who are over 60 and therefore qualify for this
increased benefit of $20, rather than $10, per month for each
year over 60 years of age.  Many of these retirees have pension
benefits well below $1,000 month.  When a study was done for the
initial establishment of this benefit in the early 1990s, it
projected a one-time cost of $1.2 million and $11 million for
future liability; presumably, increasing the benefit would not
be more expensive than establishing it.

Testifying for HB 1455 were Representative O'Toole; and James C.
Owen (St. Louis Police retirement system attorney).  Testifying
for HB 1463 were Representative Auer; St. Louis Police Veterans
Association; and Robert Griffin III, a St. Louis police officer.

OPPONENTS:  Those who oppose HB 1455 say that the mayor's office
does not strongly oppose the bill but believes a widow's benefit
of 35% would be more fiscally responsible.  The city does not
contribute to the police pension fund, which is designed to
remain stable without city contributions.  The Office of
Administration, while not officially opposing the bill,
cautioned the committee about the possible effect of increased
system liability in triggering a Hancock amendment problem.

Opponents of HB 1463 say that the mayor's office is not opposed
to the idea of the bill per se but is unable to calculate its
true fiscal effect, and therefore must oppose it.  The
retirement system board of trustees has not authorized a study
of this.

Testifying against the bills were St. Louis Mayor's Office; and
the City of St. Louis Budget Division.

Becky DeNeve, Legislative Analyst

HB 1455 -- St. Louis Police Retirement Benefits

Co-Sponsors:  O'Toole, May (108)

This bill makes changes to several provisions relating to
dependents' and survivors' benefits in the St. Louis Police
Retirement System, effective October 1, 1998.  Ordinary
disability retirement allowances will be increased by 15%,
rather than the current 10%, of the member's final average
compensation for each unmarried dependent child.  The combined
benefit for multiple dependents will not exceed 70%, rather than
the current 55%.  Members receiving disability retirement
benefits immediately prior to October 1, 1998, will receive an
additional benefit the greater of $100 or 5% of the member's
average final compensation for each unmarried dependent child.
For the death of a member in service and for death of a retired
member, the widow's pension is increased from 25% to 50% of the
member's average final compensation plus 15%, rather than the
current 10%, for each unmarried dependent child.  Widows and
dependent children receiving benefits immediately prior to
October 1, 1998, will receive increases; widows will receive an
additional payment of 25% of the deceased member's average final
compensation, and dependent children will receive the greater of
$100 or 5% of average final compensation.  Benefits for
dependent children of a member who died as the result of an
accident are increased from 10% to 15% of average final
compensation.  Dependent children already receiving benefits
immediately prior to October 1, 1998, will receive the greater
of $100 or 5% of the deceased member's average final
compensation.