HCS HB 1305 -- PUBLIC EMPLOYEE RETIREMENT SYSTEMS (Smith, 118)

COMMITTEE OF ORIGIN:  Retirement

This substitute changes the laws regarding several public
employee retirement systems.

LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM (LAGERS)

Currently, a political subdivision cannot create a pension plan
similar to LAGERS for its employees who are not police officers
or firefighters unless it has an assessed valuation of $100
million or more.  The substitute specifies that a political
subdivision cannot create a pension plan similar to LAGERS for
any employees unless it has an assessed valuation of $500 million
or more.

After January 1, 2007, volunteer fire protection associations and
fire protection districts must establish new pension plans under
the provisions of Chapter 70, RSMo, unless the new plan is the
result of consolidating the plans of two or more fire protection
districts existing prior to January 1, 2006.

MISSOURI DEPARTMENT OF TRANSPORTATION AND HIGHWAY PATROL
EMPLOYEES' RETIREMENT SYSTEM (MPERS)

If the actuary for MPERS determines that the funded ratio of the
system is below 50% for three consecutive years, the plan will
close to new members effective January 1 of the following year.

A member of MPERS may purchase up to four years of his or her
prior creditable service as a nonfederal, full-time public
employee as long as he or she is not receiving or eligible to
receive credits or benefits from any other public plan for the
service being purchased.  The purchase of this service must be
completed prior to retirement or termination of employment.  If a
member who purchased service dies prior to retirement, the
surviving spouse can receive a refund of the amount contributed
for the purchase if he or she is not eligible for survivor
benefits.

GENERAL PROVISIONS

The substitute:

(1)  Defines "defined benefit plan," "defined contribution plan,"
"funded ratio," and "lump sum benefit plan";

(2)  Changes the contribution period, from 40 to 30 years, for
which plans may not exceed unfunded accrued liabilities;

(3)  Requires retirement systems to establish mandatory board
member education programs regarding responsibilities, ethics,
governance, plan design, administration of benefits, investments,
legal liability, and actuarial principles.  Board members will be
required to attend at least two continuing education programs
each year;

(4)  Prohibits appointing authorities, board members, or
employees from receiving a gain or profit from funds or
transactions of the plan except benefits which are common to all
members of the plan.  If political contributions or other
compensations are accepted to influence the investment of system
funds, the person will forfeit his or her office and be subject
to penalties prescribed for bribery;

(5)  Specifies that any trustee, employee, or plan participant
convicted of a plan-related felony directly connected with his or
her duties will be ineligible for retirement benefits;

(6)  Prohibits, after August 28, 2006, plans with a fund ratio of
less than 80% from providing additional benefits.  Plans with a
fund ratio greater than 80% can adopt benefit enhancements if the
ratio does not decrease more than 10% or below 75%.  The unfunded
actuarial accrued liabilities associated with these benefit
changes will be amortized over a period not to exceed 20 years;

(7)  Requires plans with a ratio of less than 60% and the plan
has not met 100% of the actuarially required contribution payment
for three successive plan years, to be deemed delinquent in the
contribution payment which will constitute a first lien on the
funds of the political subdivision.  Until the delinquency in the
contribution payment is satisfied, the State Treasurer and
Director of the Department of Revenue will withhold all moneys
due the political subdivision from the state; and

(8)  Removes the requirement that the Board of Public Buildings
provide the Department of Revenue and the department director
with suitable quarters in St. Louis City.  Currently, the board
is required to provide quarters in Jefferson City, Kansas City,
and St. Louis City.

FISCAL NOTE:  No impact on state funds in FY 2007, FY 2008, and
FY 2009.

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:42 am