HCS SS#2 SCS SB 248, 100, 118, 233, 247, 341 & 420 -- RETIREMENT
SYSTEMS AND BENEFITS

SPONSOR:  Gross (Smith, 118)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Retirement
by a vote of 10 to 0.

This substitute revises provisions pertaining to various
retirement systems and establishes a medical and retirement
incentive plan for state employees.

PROSECUTING AND CIRCUIT ATTORNEYS RETIREMENT SYSTEM

Effective August 28, 2003, the retirement funds for this system
will be obtained from a $6 surcharge assessed on all criminal
cases, including violations of county ordinances and traffic laws
in Missouri.

ST. LOUIS POLICE RETIREMENT SYSTEM

The substitute requires members of the St. Louis Police
Department to receive six weeks of paid vacation each year if
members have at least 30 years of service and are eligible to
participate in the Deferred Retirement Option Plan (DROP).

KANSAS CITY POLICE RETIREMENT SYSTEM

Active members of the retirement board who are currently serving
as a police officer or a civilian employee can receive up to 10
days of paid leave to attend meetings and seminars as approved by
the board.  An early retirement incentive program is established
if the city covers full actuarial costs to the system.  Finally,
the substitute provides a funeral benefit of $1,000 for eligible
civilian employees.

RETIREMENT SYSTEMS FOR HIGHWAYS AND TRANSPORTATION EMPLOYEES, THE
HIGHWAY PATROL, AND STATE EMPLOYEES

The substitute makes the following changes to the Highways and
Transportation Employees' and Highway Patrol Retirement System
(HTEHPRS), Missouri State Employees' Retirement System (MOSERS)
and the Missouri State Employees' Retirement System, Year 2000
Plan (MSEP 2000):

(1)  The "80 and out" eligibility age is reduced from 50 years of
age to 48 years of age for members of HTEHPRS, MOSERS, and MSEP
2000;

(2)  Uniformed members of the State Highway Patrol who have
served as a non-federal, full-time public employee in Missouri
prior to becoming a member of HTEHPRS are allowed to purchase
prior credited service not to exceed four years.  This purchase
is subject to certain conditions;

(3)  Effective September 1, 2003, HTEHPRS members are prohibited
from requesting or applying for disability benefits.  The Board
of Trustees is authorized to contract for the provision of
disability benefits.  HTEHPRS members can waive their right to
receive any disability benefit;

(4)  The purchase of prior credited service by members of MOSERS
and the MSEP 2000 who have served in the military is revised to
no longer require the filing of an affidavit;

(5)  Former and current members of the General Assembly are
allowed to elect simultaneous credited service if a former or
current member becomes a state employee or state officer.  This
provision is effective August 28, 2003;

(6)  Members of the Board of Trustees of MOSERS are required to
file a financial disclosure form with the Missouri Ethics
Commission;

(7)  Members of certain retirement systems, including MOSERS and
MSEP 2000, can purchase additional life insurance benefits,
subject to certain conditions;

(8)  Certain employees who were transferred to the Department of
Transportation can elect to participate in HTEHPRS or MSEP 2000.
The election must be made within 90 days of July 1, 2003;

(9)  A provision pertaining to the division of marital benefits
order for an annuity paid under MSEP 2000 is corrected;

(10)  The normal retirement eligibility for members of the
General Assembly is changed from three full biennial assemblies
to two full biennial assemblies; and

(11)  A provision pertaining to the designation of an agent for a
beneficiary under MSEP 2000 who becomes disabled is corrected.

ADMINISTRATIVE LAW JUDGES AND LEGAL ADVISORS RETIREMENT SYSTEM

The substitute prohibits any revisions to this retirement system
previously established by law.

STATE EMPLOYEES' MEDICAL AND RETIREMENT INCENTIVE PLAN

The substitute contains provisions pertaining to medical
insurance and retirement incentives for state employees who are
members of HTEHPRS, MOSERS, or MSEP 2000.  Members of each system
must retire prior to February 1, 2004, and be eligible for
medical coverage under the Missouri Consolidated Health Care Plan
(MCHCP).

In its main provisions, the substitute:

(1)  Allows any retiree to elect to continue medical coverage at
the same costs as if the retiree were an active employee for a
maximum period of five years or until the retiree is eligible for
Medicare or reaches 65 years of age, whichever occurs first;

(2)  Requires the costs for medical coverage for eligible
retirees to revert to the applicable rate after the five-year
period expires or when the retiree becomes eligible for Medicare
or reaches 65 years of age;

(3)  Requires any additional years of service credited to a
retiree's annuity to be applicable to the costs of medical
coverage after the retiree becomes eligible for Medicare or
reaches 65 years of age;

(4)  Requires the governing body of any participating member
agency to elect to provide the medical coverage and retirement
incentive contained in the substitute in order for employees or
retirees to be eligible to apply the incentive to their current
coverage.  The medical coverage will cease immediately for any
retiree who becomes re-employed in a full-time covered state
position;

(5)  Allows the governing boards of Truman State University,
Lincoln University, educational institutions listed in Section
174.020, RSMo, the Department of Transportation, the State
Highway Patrol, and the Department of Conservation to elect to
provide their employees or retirees the same retirement incentive
and medical coverage as contained in the substitute;

(6)  Allows current employees who elect to retire and who are
eligible to receive a normal annuity under HTEHPRS or MOSERS, or
a life and any temporary annuity under MSEP 2000, to purchase
three years of additional credited service.  This election
requires an active employment status of one year, and the
employment must be immediately prior to the effective date of the
substitute.  At the employee's option, the additional years of
credited service can be added to an employee's total years of
service, an employee's age, or a combination of both, and may be
used in meeting the normal retirement eligibility requirements.
In addition, certain limitations will apply for employees who
elect to retire;

(7)  Subject to certain conditions, the payment for the
additional years of credited service can be made by a number of
options, including a cash payment, deductions over a two-year
period from benefits paid under the incentive plan, plus
interest, or by an eligible rollover distribution from an
eligible retirement plan.  Employees with annual leave accruals
in excess of $2,000 and who elect to retire will receive payment
for the leave accruals and may have the payments placed in the
employee's or retiree's deferred compensation plan;

(8)  Requires the recalculation of a retiree's annuity and the
provision of a lump-sum payment to a retiree;

(9)  Establishes a department rehiring cap of 25% for positions
that are vacated due to the election to retire.  Critical,
seasonal positions, or positions that are federally funded may be
exempt from this provision;

(10)  Prohibits an employee or retiree who elects to retire from
obtaining employment with any department covered by HTEHPRS,
MOSERS, or MSEP 2000 for a period of three years from the date of
election to retire;

(11)  Requires HTEHPRS and MOSERS to submit a written report to
the Governor, the Commissioner of the Office of Administration,
and the General Assembly by April 1, 2004.  The report must
examine required subject areas and the effects of the incentive
provisions contained in the substitute.  The period the report
must cover is February 1, 2003, to January 31, 2004;

(12)  Requires the Office of Administration to submit a budgetary
report concerning the effects of the incentive provisions
contained in the substitute by April 1, 2004.  The subject areas
the report must address are also contained in the substitute; and

(13)  Requires the MCHCP to submit a report to the Governor and
the General Assembly by April 1, 2004.  The report must examine
required subject areas and certain effects of the incentive
provisions contained in the substitute.

The substitute contains an emergency clause which applies to the
state employees medical and retirement incentive plan.

FISCAL NOTE:  Estimated Net Savings to General Revenue Fund of
$15,348,172 to $30,696,344 in FY 2004, $25,189,540 to $50,402,365
in FY 2005, and $25,189,540 to $50,402,365 in FY 2006.  Estimated
Net Savings to All Other Funds of $8,074,592 to $16,149,184 in FY
2004, $13,335,063 to $26,682,121 in FY 2005, and $13,335,063 to
$26,682,121 in FY 2006.  Estimated Net Cost to MOSERS of $0 in FY
2004, $184,421 in FY 2005, and $184,421 in FY 2006.  Estimated
Net Income to State Courts Administrator of $0 in FY 2004,
$2,015,423 in FY 2005, and $2,015,423 in FY 2006.  Estimated Net
Savings to PSC Fund of Unknown in FY 2004, FY 2005, and FY 2006.

PROPONENTS:  Supporters say that the bill as it passed the Senate
makes a number of changes to various retirement systems, some of
which are technical changes.  The bill contains a medical
insurance incentive that will help offset the high cost
associated with continuing medical insurance coverage for
eligible retirees.

Testifying for the bill were Senator Gross; and Missouri State
Teachers Association.

OPPONENTS:  There was no opposition voiced to the committee.

Joseph Deering, Legislative Analyst

Missouri House of Representatives
Last Updated July 25, 2003 at 10:13 am