CCS#2 HCS#2 SB 406 -- EMPLOYEE BENEFIT PLANS

This bill changes the laws regarding employee benefit plans.  In
its main provisions, the bill:

(1)  Changes the amount in a member's defined contribution
account from $5,000 or less to $1,000 or less which members of
the County Employees' Retirement System who terminate employment
must have to receive an automatic lump sum distribution;

(2)  Specifies that any member who retires from the Police
Retirement System of Kansas City and the Civilian Employees'
Retirement System of the Police Department of Kansas City due to
completing at least 25 years of service, reaching mandatory
retirement age, or sustaining a permanent disability prior to
August 28, 2001, will receive a monthly equalizing supplemental
compensation of $10.  Currently, members are entitled to a
supplemental retirement benefit of $50 per month in addition to
the base benefit and cost-of-living increases.  The supplemental
compensation may be adjusted by cost-of-living increases
annually, but the total of both cannot exceed 25% of the member's
base pension.  The term "member" includes the surviving spouse of
a member who qualifies under this provision;

(3)  Specifies that certain conditions of cancer will be presumed
to be suffered in the line of duty for the purpose of computing
retirement benefits for firefighters under certain conditions;

(4)  Authorizes the City of Springfield to impose, upon voter
approval, a sales tax of up to 1% for the purpose of public
safety operations including pension and health care programs;

(5)  Allows the Missouri State Employees' Retirement System
(MOSERS) and the Missouri Department of Transportation and
Highway Patrol Employees' Retirement System (MPERS) retirement
boards to establish rules to accommodate changes in the state's
payroll system relating to the final average compensation for the
retirement benefit calculation;

(6)  Requires the Missouri Consolidated Health Care Plan (MCHCP)
to offer all qualified state employees and retirees the option of
receiving health care coverage through a high-deductible plan
combined with a health savings account beginning with the open
enrollment period in 2009;

(7)  Allows a member of MCHCP to add an eligible dependent to his
or her coverage if the dependent terminates employment or the
dependent's health care benefits were terminated by his or her
employer.  The dependent must have had continuous coverage for 12
months prior to the termination of his or her health care
coverage;

(8)  Allows any member of MPERS to purchase up to four years of
his or her prior creditable service as a nonfederal, full-time
public employee if he or she is not receiving or eligible to
receive credits or benefits from any other public plan for the
service being purchased.  Any MPERS member who is entitled to a
deferred annuity will not be eligible to purchase any service;

(9)  Adds one new member to the board of trustees of MPERS.
Currently, the retired employees of the Department of
Transportation together with the civilian or uniformed highway
patrol select one member to the board.  Each group will now be
allowed to elect one board member;

(10)  Clarifies the benefit amount payable to an ex-spouse when a
division of benefits order has been issued and the ex-spouse is
also the named beneficiary of a joint and survivor option under
MOSERS and MPERS.  The division of benefits order will be applied
to either the plan the member was participating in on the date of
the dissolution or the Year 2000 Plan;

(11)  Authorizes MOSERS to provide services in connection with
medical benefit funds established for state employees, retirees,
and their dependents participating in the state medical plan
administered by MCHCP or any other medical benefit plan for state
employees, retirees, and their dependents.  MOSERS will invest
the funds received from the state medical plans in the same
manner as it invests the funds of the retirement system.  All
assets of the fund will be exclusively used for satisfying
obligations of the state medical plans and to pay for medical
benefits of state employees, retirees, and their covered
dependents;

(12)  Removes the provision which allows a member of MOSERS to
purchase service that was performed under contract for the State
of Missouri;

(13)  Clarifies that members cannot receive credit for the same
period of service in more than one retirement system;

(14)  Specifies that after August 28, 2007, part-time employees
of the General Assembly working less than 1,040 hours per year
will not be considered employees as it relates to retirement
benefits;

(15)  Changes the required hours for an employee to be eligible
for benefits from 1,000 to 1,040 hours;

(16)  Specifies that if a retiree of MOSERS who has elected a
joint and survivor option dies prior to notifying the system of
the spouse's death, his or her benefit will not revert to a
normal annuity and no retroactive payments will be made;

(17)  Requires members of MOSERS or MPERS to complete the
purchase of creditable service prior to applying for retirement
benefits.  Transferring vested service from another public
employee retirement system to the Year 2000 Plan requires that
the plans enter into an agreement;

(18)  Allows employees who were transferred from the Division of
Motor Carrier Services, Highway Reciprocity, and the Department
of Natural Resources to the Motor Carrier Services Division in
the Department of Transportation to transfer their creditable
service from MOSERS to MPERS.  The decision to transfer must be
made in writing within 60 days of August 28, 2007;

(19)  Specifies that if the board of MOSERS or MPERS provides
education or advice to members regarding retirement planning, it
will not be liable for retirement or investment decisions made by
members if the board acted with due diligence in providing the
advice;

(20)  Changes the vesting requirement for service purchase
transfers for legislators from two to three full biennial
assemblies;

(21)  Clarifies that any temporary annuity payable to a retiree
under the Year 2000 Plan will terminate no later than when he or
she reaches 62 years of age;

(22)  Clarifies that retirees under the Year 2000 Plan can retain
optional life insurance coverage in excess of $60,000 until they
reach 62 years of age;

(23)  Requires that retirees under the MOSERS Closed Plan and the
Year 2000 Plan who are re-employed with the state in a position
normally requiring them to work at least 1,040 hours per year
must work continuously for at least one year in order to accrue
creditable service for retirement purposes;

(24)  Transfers, beginning August 28, 2007, the administration of
the Missouri State Public Employees Deferred Compensation Fund
from the Missouri State Public Employees Deferred Compensation
Commission to the board of trustees of MOSERS;

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

(26)  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;

(27)  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 the penalties for bribery;

(28)  Specifies that any trustee, employee, or plan participant
convicted after August 28, 2007, of a plan-related felony
directly connected with his or her duties will be ineligible for
retirement benefits;

(29)  Prohibits, after August 28, 2007, 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 below 75%.  The unfunded actuarial
accrued liabilities associated with these benefit changes will be
amortized over a period not to exceed 20 years;

(30)  Requires a plan, after August 28, 2007, with a fund ratio
of less than 60% that has not met 100% of the actuarially
required contribution payment for five successive plan years, to
be deemed delinquent in the contribution payment which will
constitute a first lien on the funds of the political
subdivision.  This will not apply to the Public School Retirement
System or the Public Education Employee Retirement System of
Missouri.  Until the delinquency in the contribution payment is
satisfied, the State Treasurer and Director of the Department of
Revenue will withhold 25% of all moneys due the political
subdivision from the state;

(31)  Extends the election date of a certain retirement option
under the Public School Retirement System of Missouri from
July 1, 2008, to July 1, 2013;

(32)  Allows the board of trustees of the Public School
Retirement System of the City of St. Louis, at its discretion, to
increase benefits for retired members if the additional benefit
will not require an increase in the contribution rate;

(33)  Requires the Public School Retirement System when
calculating a member's final average salary to disregard any
increase in compensation in excess of 10% from one year to the
next in the final average salary period.  This limit will not
apply to increases because of a change in position or those
required by state statute or district-wide salary schedule
adjustments;

(34)  Allows juvenile officers in single county circuits to
receive creditable prior service in MOSERS for employment as a
juvenile court employee prior to July 1, 1999, if the service is
not credited in a county retirement plan; and

(35)  Requires a separate board of trustees to administer a fire
protection district's retirement plan rather than the district's
board of directors.  The board of trustees will include the
three-member board of directors and two pension plan participants
chosen by the board of directors from a list of three individuals
elected by plan members.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:22 am