Pension Systems Bill Headed to Governor’s Desk
Throughout the country, many cities and states are struggling to fund their various public pension plans. From Chicago to Dallas and California to South Carolina, local and state governments alike are facing huge pension liabilities. Whether due to years of low interest rates, corruption, poor investment decisions, the very structure of the plans, or a combination of these factors, numerous cities and states are finding themselves in a deep hole and are now scrambling to climb out. We do not want this to be Missouri’s fate, which is why it’s critical we constantly assess the long-term viability of our defined contribution and benefit plans and make changes when necessary.
Similar to legislation I filed last year, Senate Bill 62 makes important changes to the College and University Retirement Plan, or CURP — the defined contribution plan for public higher education faculty and certain administrators not employed by the University of Missouri System. Currently, employers participating in CURP contribute to each employee plan 1 percent less than the MOSERS’ normal cost rate; however, because the MOSERS’ normal cost rate has been declining, less money is being contributed to employees’ CURP accounts. Under SB 62, employers will be required to make a 6 percent contribution, while employees hired on or after July 1, 2018, will be required to contribute 2 percent. Additionally, all employees will be able to contribute to an optional supplemental retirement account.
I filed SB 62 to help ensure the long-term viability of the CURP system. This measure has the support of many of our state colleges and universities, and I’m pleased to say it will be heading to the governor’s desk shortly. Among other provisions, this legislation will also reduce from 10 years to five years the vesting requirement for MOSERS/MPERS employees. This was one of the recommendations to come from the state’s recently commission CBIZ study of state employee compensation and benefits.
Please feel free to call, email, or write with your ideas or concerns. My Capitol office number is (573) 751-1415, my email is dan.hegeman@senate.mo.gov and my mailing address is Room 332, State Capitol Building, Jefferson City, MO 65101.