HCS/HB 1882 - This act modifies various provisions of law relating to the Joint Committee on Public Retirement and the administrative requirements of public employee retirement plans.JOINT COMMITTEE ON PUBLIC RETIREMENT (21.557, 21.561, 21.562, 21.563, 105.702)
The act provides that if any state or local public employee retirement system does not cooperate or assist the Joint Committee on Public Retirement in the performance of its duties then the Committee may request staff of such retirement system to testify before the Committee regarding the failure to comply.
The act repeals provisions of law requiring a public employee retirement system to notify the Committee of periodic cost-of-living increases within seven days of the increase. The act states that public plans must notify the Committee when providing to participants any new payments of benefits and cost-of-living increases beyond the plan provisions of the prior plan year.
Currently, the Committee submits a report of its activities to the General Assembly no later than January 15th of each year. The act states that the report shall be submitted to the General Assembly no later than the first annual quarterly meeting of the Committee.
All retirement plans are required to develop a procurement plan for the utilization of minority and women money managers, brokers, and investment counselors, and shall report their progress annually to the Committee and the Governor's Minority Advocacy Commission.
PUBLIC RETIREMENT BENEFIT CHANGES (105.660, 105.664, 105.665, 105.666, 105.684)
The act modifies the definition of "substantially purposed changed" by stating that closing or freezing a defined benefit plan is considered a substantial proposed change only for the purposes of certain sections of law.
An actuarial valuation performed in compliance with the Governmental Accounting Standards Board pronouncements must be forwarded to the Committee no later than sixty calendar days after the completion of such valuation.
Currently, before implementing a substantial proposed change in plan benefits a public plan must prepare a cost statement regarding such change which includes certain valuations. This act provides that the level normal cost of plan benefits, the contribution for unfunded accrued liabilities, and the total post change contribution rate, which are all currently included in the cost statement, shall be expressed in estimated annual dollars and as a percent of active employee payroll.
The cost statement shall include the plan's actuarial value of assets, market value of assets, actuarial accrued liability, and funded ratio, and a projection of at least ten years comparing the current plan provisions and the proposed change. The Missouri Local Government Employee's Retirement System is not required to include such projection and instead must include in the cost statement a prospective schedule of at least ten years containing current employer contributions, proposed employer contributions, and the resulting difference.
The act repeals the provision of law requiring the cost statement to include the increase in the total contribution amount required to adequately fund the proposed change in benefits.
Currently, boards members of public plans are required to complete at least two hours of continuing education programs a year. This act states that members must complete a total of six hours of continuing education programs a year. Routine presentations by outside plan service providers do not qualify as continuing education program for the purposes of fulfilling the requirement, and the governing body of the plan must maintain a record of each board member's education. A board member who knowingly does not meet the continuing education requirements may be removed from the board by a majority vote of the board members.
Current law provides that a public plan cannot adopt a benefit increase unless the plan's funded ratio is at least eighty percent and will not be less than seventy-five percent after the implementation of the benefit increase. This act specifies that a plan only has to be eighty percent funded for the purposes of a benefit increase if the increase would, in the aggregate with any other proposed plan provisions, increase the plan's accrued liability. Methods and assumptions used in valuing such proposed change may be modified if the nature is such that alternative assumptions are clearly warranted.
This act is substantially similar to provisions contained in SCS/HCS/HB 1044 (2014).
JESSICA BAKER