FIRST REGULAR SESSION
SENATE COMMITTEE SUBSTITUTE FOR
HOUSE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NO. 214
95TH GENERAL ASSEMBLY
Reported from the Committee on Veterans' Affairs, Pensions and Urban Affairs, April 9, 2009, with recommendation that the Senate Committee Substitute do pass and be placed on the Consent Calendar.
TERRY L. SPIELER, Secretary.
0857S.04C
AN ACT
To repeal sections 70.655, 70.660, 70.695, 70.710, 70.720, and 70.730, RSMo, and to enact in lieu thereof six new sections relating to the Missouri local government employees' retirement system.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 70.655, 70.660, 70.695, 70.710, 70.720, and 70.730, RSMo, are repealed and six new sections enacted in lieu thereof, to be known as sections 70.655, 70.660, 70.695, 70.710, 70.720, and 70.730, to read as follows:
70.655. 1. Upon a member's retirement he or she shall receive an allowance for life in accordance with the applicable benefit program elected by the member's employer, as follows:
(1) Benefit program L-1. A member with credited service covered by benefit program L-1 shall receive an allowance for life equal to one percent of the member's final average salary multiplied by the number of years of such credited service;
(2) Benefit program L-3. A member with credited service covered by benefit program L-3 shall receive an allowance for life equal to one and one-quarter percent of the member's final average salary multiplied by the number of years of such credited service;
(3) Benefit program LT-4. A member with credited service covered by benefit program LT-4 shall receive an allowance for life equal to one percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-two, then such member shall receive a temporary allowance equal to one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-two;
(4) Benefit program LT-5. A member with credited service covered by benefit program LT-5 shall receive an allowance for life equal to one and one-quarter percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-two, then such member shall receive a temporary allowance equal to three-quarters of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-two;
(5) Benefit program L-6. A member with credited service covered by benefit program L-6 shall receive an allowance for life equal to two percent of the member's final average salary multiplied by the number of years of such credited service;
(6) Benefit program L-7. A member with credited service covered by benefit program L-7 shall receive an allowance for life equal to one and one-half percent of the member's final average salary multiplied by the number of years of such credited service;
(7) Benefit program LT-8. A member with credited service covered by benefit program LT-8 shall receive an allowance for life equal to one and one-half percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-two, then such member shall receive a temporary allowance equal to one-half of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-two;
(8) Benefit program LT-4(65). A member with credited service covered by benefit program LT-4(65) shall receive an allowance for life equal to one percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-five, then such member shall receive a temporary allowance equal to one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-five;
(9) Benefit program LT-5(65). A member with credited service covered by benefit program LT-5(65) shall receive an allowance for life equal to one and one-quarter percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-five, then such member shall receive a temporary allowance equal to three-quarters of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-five;
(10) Benefit program LT-8(65). A member with credited service covered by benefit program LT-8(65) shall receive an allowance for life equal to one and one-half percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-five, then such member shall receive a temporary allowance equal to one-half of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-five;
(11) Benefit program L-9. A member with credited service covered by benefit program L-9 shall receive an allowance for life equal to one and six-tenths percent of the member's final average salary multiplied by the number of years of such credited service;
(12) Benefit program LT-10(65). A member with credited service covered by benefit program LT-10(65) shall receive an allowance for life equal to one and six-tenths percent of the members' final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645 or section 70.650 or section 70.670, and if such member's age at retirement is younger than age sixty-five, then such member shall receive a temporary allowance equal to four-tenths of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death; or the member's attainment of age sixty-five;
(13) Benefit program L-11. Benefit program L-11 may cover employment in a position only if such position is not concurrently covered by federal Social Security; in addition, if such position was previously covered by federal Social Security, benefit program L-11 may cover only employment rendered after cessation of federal Social Security coverage. A member with credited service covered by benefit program L-11 shall receive an allowance for life equal to two and one-half percent of the member's final average salary multiplied by the number of years of such credited service;
(14) Benefit program L-12. A member with credited service covered by benefit program L-12 shall receive an allowance for life equal to one and three-quarter percent of the member's final average salary multiplied by the number of years of such credited service;
(15) Benefit program LT-14(65). A member with credited service covered by benefit program LT-14(65) shall receive an allowance for life equal to one and three-quarter percent of the member's final average salary multiplied by the number of years of such credited service. In addition, if such member is retiring as provided in section 70.645, 70.650, or 70.670, then such member shall receive a temporary allowance equal to one-quarter of one percent of the member's final average salary multiplied by the number of years of such credited service. Such temporary allowance shall terminate at the end of the calendar month in which the earlier of the following events occurs: such member's death or the member's attainment of age sixty-five.
2. If each portion of a member's credited service is not covered by the same benefit program, then the member's total allowance for life shall be the total of the allowance for life determined under each applicable benefit program.
3. Each employer shall have the credited service of each of its members covered by benefit program L-1 provided for in this section unless such employer shall have elected another benefit program provided for in this section.
4. Except as otherwise provided in this subsection, each political subdivision, by majority vote of its governing body, may elect from time to time to cover its members, whose political subdivision employment is concurrently covered by federal Social Security, under one of the benefit programs provided for in this section. Each political subdivision, by majority vote of its governing body, may elect from time to time to cover its members, whose political subdivision employment is not concurrently covered by federal Social Security, under one of the benefit programs provided for in this section. The clerk or secretary of the political subdivision shall certify the election of the benefit program to the board within ten days after such vote. The effective date of the political subdivision's benefit program is the first day of the calendar month specified by such governing body, or the first day of the calendar month next following receipt by the board of the certification of election of benefit program, or the effective date of the political subdivision becoming an employer, whichever is the latest. Such election of benefit program may be changed from time to time by such vote, but not more often than biennially. If such changed benefit program provides larger allowances than the benefit program previously in effect, then such larger benefit program shall be applicable to the past and future employment with the employer by present and future employees. If such changed benefit program provides smaller allowances than the benefit program previously in effect, then such changed benefit program shall be applicable only to credited service for employment rendered from and after the effective date of such change. After August 28, 1994, political subdivisions shall not elect coverage under benefit program LT-4, benefit program LT-5, or benefit program LT-8. After August 28, 2005, political subdivisions shall not elect coverage under benefit program L-9 or benefit program LT-10(65).
5. Should an employer change its election of benefit program as provided in this section, the employer contributions shall be correspondingly changed effective the same date as the benefit program change.
6. The limitation on increases in an employer's contribution provided by subsection 6 of section 70.730 shall not apply to any contribution increase resulting from an employer electing a benefit program which provides larger allowances.
7. Subject to the provisions of subsections 9 and 10 of this section, for an allowance becoming effective on September 28, 1975, or later, and beginning with the October first which is at least twelve full months after the effective date of the allowance, the amount of the allowance shall be redetermined effective each October first and such redetermined amount shall be payable for the ensuing year. Subject to the limitations stated in the next sentence, such redetermined amount shall be the amount of the allowance otherwise payable multiplied by the following percent: one hundred percent, plus two percent for each full year (excluding any fraction of a year) in the period from the effective date of the allowance to the current October first. [In no event shall] Such redetermined amount [(1) be less than the amount of the allowance otherwise payable nor (2)] shall not be more than the amount of the allowance otherwise payable multiplied by the following fraction: the numerator shall be the Consumer Price Index for the month of June immediately preceding such October first (but in no event an amount less than the denominator below) and the denominator shall be the Consumer Price Index for the month of June immediately preceding the effective date of the allowance, provided that in no event shall such redetermination result in a reduction to the allowance payable. As used herein, "Consumer Price Index" means the Consumer Price Index for Urban Wage Earners and Clerical Workers, as determined by the United States Department of Labor and in effect January 1, 1975; provided, should such Consumer Price Index be restructured subsequent to 1974 in a manner materially changing its character, the board shall change the application of the Consumer Price Index so that as far as is practicable the 1975 intent of the use of the Consumer Price Index shall be continued. As used herein "the amount of the allowance otherwise payable" means the amount of the allowance which would be payable without regard to these provisions redetermining allowance amounts after retirement.
8. Subject to the provisions of subsections 9 and 10 of this section, for an allowance becoming effective on September 28, 1975, or later, the maximum allowance payable under the provisions of section 70.685 shall be redetermined each October first in the same manner as an allowance is redetermined under the provisions of subsection 7 of this section.
9. (1) The system establishes reserves for the payment of future allowances to retirants and beneficiaries. Should the board determine, after consulting with the actuary, that the established reserves are more than sufficient to provide such allowances, the board may increase the annual increase rate provided for in subsections 7 and 8 of this section, as it applies to any allowance payable, but in no event shall the total of all redetermined amounts as of October first of any year be greater than one hundred four percent of the allowances which would have been payable that October first without such redeterminations; provided, as of any redetermination date the same annual increase rate shall be applied to all allowances with effective dates in the range of November first to October first of the following year. The board may extend the provisions of subsections 7 and 8 of this section to allowances which became effective before September 28, 1975; provided such an action by the board shall not increase an employer contribution rate then in effect;
(2) After August 28, 1993, the annual increase rate established by this subsection shall be a compound rate, compounded annually, and the four percent annual maximum rate shall also be a compound rate, compounded annually; provided, the use of such compounding shall not begin until October 1, 1993, and shall not affect redeterminations made prior to that date.
10. Should the board determine that the provisions of subsections 7, 8 and 9 of this section are jeopardizing the financial solvency of the system, the board shall suspend these provisions redetermining allowance amounts after retirement for such periods of time as the board deems appropriate.
70.660. 1. Except as otherwise provided herein, before the date the first payment of a person's allowance becomes due but not thereafter, a person about to become a retirant may elect to receive his or her allowance for life with or without a partial lump-sum distribution, as provided in this subsection. A person about to become a retirant may elect to receive a partial lump-sum distribution equal to twenty-four times the amount of his or her monthly allowance for life, not including any monthly temporary allowance which may be payable. Such lump sum shall be paid to the retirant, upon written application to the board, not fewer than ninety days nor more than one hundred fifty days after the date the first payment of his or her monthly allowance becomes due. The retirant's monthly life allowance shall be reduced to eighty-four percent if the retirant's age at the time of retirement is sixty, which percent shall be decreased by four-tenths of one percent for each year the retirant's age at the time of retirement is greater than sixty, or which percent shall be increased by four-tenths of one percent for each year the retirant's age at the time of retirement is less than sixty, up to a maximum of ninety percent. The reductions in monthly life allowance in this subsection shall be calculated and applied before any reductions under subsection 2 of this section are calculated and applied.
2. Before the date the first payment of a person's allowance becomes due but not thereafter, a person about to become a retirant may elect to have his or her allowance for life reduced but not any temporary allowance which may be payable, and nominate a beneficiary, as provided by option A, B, C, [or] D, or E set forth below:
(1) Option A. Under option A, a retirant's allowance payable to the retirant shall be reduced to a certain percent of the allowance otherwise payable to the retirant. If such first payment due date is on or after October 1, 1998, such percent shall be eighty-five percent if the retirant's age and the retirant's beneficiary's age are the same on such first due date, which shall be decreased by three-quarters of one percent for each year that the beneficiary's age is less than the retirant's age, or which shall be increased by three-quarters of one percent, up to a maximum of ninety percent, for each year that the beneficiary's age is more than the retirant's age. Upon the retirant's death three-quarters of the retirant's reduced allowance to which the retirant would have been entitled had the retirant lived shall be paid to his or her surviving beneficiary, nominated before such first payment due date but not thereafter, who was the retirant's spouse for not less than the two years immediately preceding such first payment due date, or another person aged forty years or older who is a lineal descendant or other kinship of the retirant up to the third degree and who is receiving more than one-half support from the retirant for not less than the two years immediately preceding such first payment due date. Such other person's kinship shall be computed by counting upward from the decedent to the nearest common ancestor and then downward to the relative where the degree of kinship is the sum of these two counts, so that brothers are related in the second degree.
(2) Option B. Under option B, a retirant's allowance payable to the retirant shall be reduced to a certain percent of the allowance otherwise payable to the retirant. If such first payment due date is on or after October 1, 1998, such percent shall be ninety percent if the retirant's age and the retirant's beneficiary's age are the same on such first payment due date, which shall be decreased by one-half of one percent for each year that the beneficiary's age is less than the retirant's age, or which shall be increased by one-half of one percent, up to a maximum of ninety-five percent for each year that the beneficiary's age is more than the retirant's age. Upon the retirant's death one-half of his or her reduced allowance to which the retirant would have been entitled had the retirant lived shall be paid to the retirant's surviving beneficiary, nominated before such first payment due date but not thereafter, who was either the retirant's spouse for not less than the two years immediately preceding such first payment due date, or another person aged forty years or older who is a lineal descendant or other kinship of the retirant up to the third degree and who is receiving more than one-half support from the retirant for not less than the two years immediately preceding such first payment due date. Such other person's kinship shall be computed by counting upward from the decedent to the nearest common ancestor and then downward to the relative where the degree of kinship is the sum of these two counts, so that brothers are related in the second degree.
(3) Option C. Under option C, a retirant's allowance payable to the retirant shall be reduced to ninety-five percent of the allowance otherwise payable to the retirant if such first payment due date is on or after October 1, 1998. If the retirant dies before having received one hundred twenty monthly payments of his or her reduced allowance, his or her reduced allowance to which the retirant would have been entitled had the retirant lived shall be paid for the remainder of the one hundred twenty months' period to such person as the retirant shall have nominated by written designation duly executed and filed with the board. If there is no such beneficiary surviving the retirant, the reserve for such allowance for the remainder of such one hundred twenty months' period shall be paid to the retirant's estate.
(4) Option D. Under option D, a retirant's allowance payable to the retirant shall be reduced to a certain percent of the allowance otherwise payable to the retirant. If such first payment due date is on or after October 1, 2009, such percent shall be eighty percent if the retirant's age and the retirant's beneficiary's age are the same on such first payment due date, which shall be decreased by three-quarters of one percent for each year the beneficiary's age is less than the retirant's age or shall be increased by three-quarters of one percent, up to a maximum of eighty-seven and one-half percent for each year the beneficiary's age is more than the retirant's age. Upon the retirant's death, the retirant's reduced allowance to which the retirant would have been entitled had the retirant lived shall be paid to his or her surviving beneficiary, nominated before such first payment due date but not thereafter, who was the retirant's spouse for not less than the two years immediately preceding such first payment due date or another person aged forty years or older who is a lineal descendant or other kinship of the retirant up to the third degree and who is receiving more than one-half support from the retirant for not less than the two years immediately preceding such first payment due date. Such other person's kinship shall be computed by counting upward from the decedent to the nearest common ancestor and then downward to the relative where the degree of kinship is the sum of these two counts, so that brothers are related in the second degree.
(5) Option E. Some other option approved by the board which shall be the actuarial equivalent of the allowance to which the member is entitled under this system.
3. The death of the beneficiary designated under option A [or], B, or D of subsection 2 of this section before the death of the retirant after retirement shall, upon written notification to the system of the death of the beneficiary, cancel any optional plan elected at retirement to provide continuing lifetime benefits to the beneficiary and shall return the retirant to his or her single lifetime benefit equivalent, to be effective the month following receipt of the written notification of the death of the beneficiary by the system.
4. If a member fails to elect a benefit option under subsection 2 of this section, his or her allowance for life shall be paid to the member as a single lifetime benefit.
70.695. The right of a person to an allowance, to the return of accumulated contributions, the allowance itself, any allowance option, and any other right accrued or accruing under the provisions of sections 70.600 to 70.755, and all moneys belonging to the system shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or to any other process of law whatsoever, and shall be unassignable, except as is specifically provided in sections 70.600 to 70.755; except that:
(1) Any political subdivision shall have the right of setoff for any claim arising from embezzlement by or fraud of a member, retirant, or beneficiary; and
(2) Such rights shall not be exempt from attachment or execution in a proceeding instituted for the support and maintenance of children. In all such actions described in this subdivision, the system shall be entitled to collect a fee of up to twenty dollars chargeable against the person for each delinquent attachment, execution, sequestration or garnishment payment;
(3) A retirant may authorize the board to have deducted from his or her allowance the payments required of him or her to provide for health insurance or long-term care insurance premiums in accordance with Section 402 of the Internal Revenue Code of 1986, as amended.
70.710. 1. The "Employer Accumulation Fund" is hereby created. It is the fund in which shall be accumulated the contributions made by employers for benefits, and from which shall be made transfers, as provided in sections 70.600 to 70.755.
2. When paid to the system, the employer contributions provided for in subsections 2 and 3 of section 70.730 shall be credited to the employer accumulation fund account of the employer making the contributions.
3. When an allowance other than a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, there shall be transferred to the benefit reserve fund from his employer's account in the employer accumulation fund the difference between the reserve for the allowance and the accumulated contributions standing to his credit in the members deposit fund at the time the allowance first becomes due and payable, of the member or former member to whom or on whose behalf the allowance is payable.
4. A separate account shall be maintained in the employer accumulation fund for each employer. No employer shall be responsible for the employer accumulation fund liabilities of another employer.
5. When a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, the accrued service pension reserve covering the retiring member shall be calculated in the manner provided for in subsection 3 of section 70.730, as of the effective date of the disability allowance. Such reserve shall be transferred to the benefit reserve fund from the employer's account in the employer accumulation fund.
70.720. 1. The "Casualty Reserve Fund" is hereby created. It is the fund in which shall be accumulated the contributions made by employers for pensions either to be paid members who retire on account of disability or that result from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee, and from which shall be made transfers as provided in sections 70.600 to 70.755.
2. When paid to the system, the employer contributions provided for in subsection 4 of section 70.730 shall be credited to the casualty reserve fund.
3. When a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, there shall be transferred to the benefit reserve fund from the casualty reserve fund an amount equal to the reserve for the allowance, minus:
(1) The accumulated contributions, standing to the member's credit in the members deposit fund at the time the allowance first becomes due and payable; and
(2) The accrued service pension reserve determined pursuant to subsection 5 of section 70.710.
70.730. 1. Each employer's contributions to the system shall be the total of the contribution amounts provided for in subsections 2 through 5 of this section; provided, that such contributions shall be subject to the provisions of subsection 6 of this section.
2. An employer's normal cost contributions shall be determined as follows: Using the financial assumptions adopted by the board from time to time, the actuary shall annually compute the rate of contributions which, if paid annually by each employer during the total service of its members, will be sufficient to provide the pension reserves required at the time of their retirements to cover the pensions to which they might be entitled or which might be payable on their behalf. The board shall annually certify to the governing body of each employer the amount of membership service contribution so determined, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time determine. When received, such payments shall be credited to the employer's account in the employer accumulation fund.
3. An employer's accrued service contributions shall be determined as follows: Using the financial assumptions adopted by the board from time to time, the actuary shall annually compute for each employer the portions of pension reserves for pensions which will not be provided by future normal cost contributions. The accrued service pension reserves so determined for each employer less the employer's applicable balance in the employer accumulation fund shall be amortized over a period of years, as determined by the board. Such period of years shall not extend beyond the latest of (1) forty years from the date the political subdivision became an employer, or (2) thirty years from the date the employer last elected to increase its optional benefit program, or (3) fifteen years from the date of the annual actuarial computation. The board shall annually certify to the governing body of each employer the amount of accrued service contribution so determined for the employer, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time determine. When received, such payments shall be credited to the employer's account in the employer accumulation fund.
4. The employer's contributions for the portions of disability pensions or pensions that result from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee not covered by accrued service pension reserves shall be determined on a one-year term basis. The board may determine different rates of contributions for employers having policeman members or having fireman members or having neither policeman members nor fireman members. The board shall annually certify to the governing body of each employer the amount of contribution so ascertained for the employer, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time ascertain. When received, such payments shall be credited to the casualty reserve fund.
5. Each employer shall provide its share, as determined by the board, of the administrative expenses of the system and shall pay same to the system to be credited to the income-expense fund.
6. The employer's total contribution to the system, expressed as a percent of active member compensations, in any employer fiscal year, beginning with the second fiscal year that the political subdivision is an employer, shall not exceed its total contributions for the immediately preceding fiscal year, expressed as a percent of active member compensations, by more than one percent.
•