HCS HB 1644 -- PUBLIC SCHOOL RETIREMENT SYSTEMS (Hagan-Harrell)

This substitute makes changes in the Public School Retirement
System to both teacher and nonteacher benefits.

TEACHERS

For teachers, the substitute:

(1)  Extends the window for 25-and-out from July 1, 2000, to
July 1, 2003;

(2)  Raises the cap on cost-of-living increases from 75% to 80%;

(3)  Clarifies that for members retiring on or after July 1,
2000, and not for those who retired before July 1, 2000, cost--
of-living increases will begin in the third January following
retirement;

(4)  Establishes, for members retired before July 1, 2000, and
the beneficiaries of deceased retired members, a 3.5% increase;

(5)  Makes all survivor benefits payable to eligible current and
future survivor beneficiaries and makes survivors eligible for a
cost-of-living adjustment; and

(6)  Reinstates any administrator who had been a member of the
teachers' system and then lost eligibility through the discovery
of lack of a valid Missouri certificate who subsequently
obtained a valid Missouri certificate.

NONTEACHERS

For the nonteacher retirement system, the substitute:

(1)  Revises the definition of "final average salary" from 5
years to 3 years;

(2)  Increases the maximum allowable contribution rate from 4.5%
to 5%;

(3)  Implements the rule of 80 (retirement eligibility when age
plus years of service equal 80);

(4)  Increases the multiplier from 1.45% to 1.51% of final
average salary;

(5)  Extends the window for the 25-and-out option from July 1,
2000, to July 1, 2003, and increases the multiplier for each
year of service between 25 and 29 years by .06%, ranging from
1.41% at 25 years up to 1.49% at 29 years of service in contrast
to the current 1.35% for 25 years and 1.43% for 29 years;

(6)  Provides a one-time benefit to members who retire before
July 1, 2000, of 3.4%; and

(7)  Creates a temporary multiplier of .4% for members who
retire when they are not yet eligible for Social Security and
have 30 years of service or who are eligible under the rule of
80, until the member reaches the minimum age of eligibility for
Social Security.

The substitute has an emergency clause and will be effective
upon approval by the Governor or July 1, 2000, whichever occurs
later.

FISCAL NOTE:  No impact on state funds.

HCS HB 1644 -- PUBLIC SCHOOL RETIREMENT SYSTEMS

SPONSOR:  Hagan-Harrell

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Retirement by a vote of 6 to 0.

This substitute makes changes in the Public School Retirement
System to both teacher and nonteacher benefits.

TEACHERS

For teachers, the substitute:

(1)  Extends the window for 25-and-out from July 1, 2000, to
July 1, 2003;

(2)  Raises the cap on cost-of-living increases from 75 to 80%;

(3)  Clarifies that for members retiring on or after July 1,
2000, and not for those who retired before July 1, 2000, cost--
of-living increases will begin in the third January following
retirement;

(4)  Establishes, for members retired before July 1, 2000, and
the beneficiaries of deceased retired members, a 3.5% increase;
and

(5)  Makes all survivor benefits payable to eligible current and
future survivor beneficiaries.

NONTEACHERS

For the nonteacher retirement system, the substitute:

(1)  Revises the definition of "final average salary" from 5
years to 3 years;

(2)  Increases the maximum allowable contribution rate from 4.5%
to 5%;

(3)  Implements the rule of 80 (retirement eligibility when age
plus years of service equal 80);

(4)  Increases the multiplier from 1.45 to 1.51% of final
average salary;

(5)  Extends the window for the 25-and-out option from July 1,
2000, to July 1, 2003, and increases the multiplier for each
year of service between 25 and 29 years by .06%, ranging from
1.41% at 25 years up to 1.49 at 29 years of service in contrast
to the current 1.35% for 25 years and 1.43% for 29 years;

(6)  Provides a one-time benefit to members who retire before
July 1, 2000, of 3.4%; and

(7)  Creates a temporary multiplier of .4% for members who
retire when they are not yet eligible for Social Security and
have 30 years of service or who are eligible under the rule of
80, until the member reaches the minimum age of eligibility for
Social Security.

The bill has an emergency clause and will be effective upon
approval by the Governor or July 1, 2000, whichever occurs later.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that the teacher benefits can be
funded with the current contribution rate and the PSRS board
approves.

Testifying for the bill were Representative Hagan-Harrell;
Public School Retirement System; Missouri Retired Teachers
Association; Missouri NEA; Missouri State Teachers Association;
Missouri Federation of Teachers; Missouri Community College
Association; St. Louis Community Colleges; and School
Administrators Coalition.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Senior Legislative Analyst

HB 1644 -- Public School Retirement System

Co-Sponsors:  Hagan-Harrell, Franklin

This bill revises the Public School Retirement System.  The bill:

(1)  Extends the window for 25-and-out from July 1, 2000, to
July 1, 2003;

(2)  Raises the cap on cost-of-living increases from 75% to 80%;

(3)  Clarifies that for members retiring after July 1, 2000, and
not for those who retired before July 1, 2000, cost-of-living
increases will begin in the third January following retirement;

(4)  Establishes, for members retired before July 1, 2000, and
the beneficiaries of deceased retired members, a 3.5% increase;
and

(5)  Makes all survivor benefits payable to eligible current and
future survivor beneficiaries.

The bill has an emergency clause and will be effective upon
approval by the Governor or July 1, 2000, whichever occurs later.