HCS HB 1384, 982 & 954 -- PUBLIC SCHOOL RETIREMENT SYSTEMS

SPONSOR:  Stoll

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

The substitute raises the Public School Retirement System
teachers' regular retirement benefit multiplier from 2.3 to 2.5%
of final average compensation for each year of service.  The
window for an alternative calculation for those with 25 to 29
years of service is extended from July 1, 1998, to July 1, 2000,
and the multiplier for each year is increased by two-tenths,
ranging from 2.2% at 25 years to 2.4% at 29 years.  Currently,
retirees are eligible for cost-of-living adjustments (COLAs) the
fourth January after retirement; the substitute changes
eligibility to the third January after retirement, and the
current cap of 75% is raised to 80%.  The minimum benefit
amounts for those with 15 or more years of service are extended
to cover beneficiaries. Currently, members who retired before
May 24, 1994, receive an additional amount--the lesser of $60 or
the product of $2 times the number of years of the member's
creditable service.  The substitute extends this benefit to
survivors of deceased members beginning September 1, 1998.
Retired members and the beneficiaries of deceased retired
members will receive a payment of 8.7% of the previous month's
benefit which will not count against the COLA cap.  The minimum
and maximum benefits for survivors are raised and a COLA offered
under the same conditions as regular retirants' COLAs (eligible
upon the third January after retirement and 80% cap).

The substitute also makes changes to the nonteachers' system,
extending the option window for those with 25 to 29 years of
service to July 1, 2000, and raising the COLA cap from 65 to
75%. Authorization for a seventh retirement option is added,
which permits level or near-level benefit payments in
conjunction with social security benefits.

The substitute has an emergency clause.

FISCAL NOTE:  Cost to General Revenue Fund of $18,700,000 in FY
1999, FY 2000, and FY 2001.  Possible reimbursements to school
districts depends on applicability of Article X, Section 21 of
the Missouri Constitution.

PROPONENTS:  Supporters of HB 1384 say that the Public School
Retirement System board of trustees supports this bill; its
studies indicate that no additional contribution is needed to
fund the increased benefits.  It treats members who are going to
retire and members who have already retired to the same level of
benefit (the 8.7% payment to the already retired is the
equivalent of raising the multiplier from 2.3 to 2.5%); the
substitute provides equity for the nonteachers' system by
allowing the nonteachers the ability to take early retirement
that coordinates with their social security benefits through
benefit leveling.  Reducing the amount of time required before
COLA eligibility brings Missouri more in line with other states'
teacher retirement systems.

Supporters of HB 982 say that this same bill increasing minimum
and maximum dollar amounts for survivors' benefits was voted "do
pass" last year, and its provisions are already incorporated in
HB 1384.

Supporters of HB 954 say that this is similar to a bill from
last year that would have changed the multiplier from 2.3% to
2.4%.

Testifying for HB 1384 were Representative Stoll; Public School
Retirement System; Retired Teachers' Association; Missouri
Council of School Administrators; Missouri State Teachers'
Association; Missouri National Education Association; Blue
Springs School District; and Greater Kansas City Association of
School Business Officials.

Testifying for HB 982 were Representative Froelker; Missouri
State Teachers Association; and Missouri National Education
Association.

Testifying for HB 954 were Representatives Lograsso and Ross;
Missouri State Teachers Association; and Missouri National
Education Association.

OPPONENTS:  Although the Office of Administration did not
testify against the three bills, their representative expressed
concern over possible Hancock problems resulting from increased
system liability.

Becky DeNeve, Legislative Analyst

HB 1384 -- Public School Retirement Systems

Sponsor:  Stoll

This bill raises the Public School Retirement System teachers'
regular retirement benefit multiplier from 2.3 to 2.5% of final
average compensation for each year of service and extends the
window from July 1, 1998, to July 1, 2000, for an alternative
calculation for those with 25 to 29 years of service.
Currently, retirees are eligible for cost-of-living adjustments
(COLAs) the fourth January after retirement; the bill changes
eligibility to the third January after retirement, and the
current cap of 75% is raised to 80%.  The minimum benefit
amounts for those with 15 or more years of service are extended
to cover beneficiaries. Currently, members who retired before
May 24, 1994, receive an additional amount--the lesser of $60 or
the product of $2 times the number of years of the member's
creditable service.  The bill extends this benefit to survivors
of deceased members beginning September 1, 1998.  Retired
members and the beneficiaries of deceased retired members will
receive a payment of 8.7% of the previous month's benefit which
will not count against the COLA cap.  The minimum and maximum
benefits for survivors are raised and a COLA offered under the
same conditions as regular retirants' COLAs (eligible upon the
third January after retirement and 80% cap).

The bill also makes changes to the nonteachers' system,
extending the option window for those with 25 to 29 years of
service to July 1, 2000, and raising the COLA cap from 65 to 75%.

The bill has an emergency clause.