HB0537 Franklin, Richard

P R E F I L E D

HB 537 -- Public School Retirement

This bill makes several changes in law regarding the Public School Retirement System by:

(1) Establishing that employee compensation in excess of the limitations set forth in the United States Internal Revenue Code will be disregarded for the purpose of determining retirement contributions and calculating benefits paid by the system. This language complies with the Internal Revenue Code and is applicable to both teachers and nonteachers;

(2) Complying with the United States Internal Revenue Code by requiring that benefits for the members of the Public School Retirement System or the Nonteacher School Employee Retirement System must not exceed 100% of that member's final average compensation;

(3) Allowing the Public School Retirement System and the Nonteacher School Employee Retirement System to delegate authority to registered investment counselors to invest the system funds as provided under the prudent person provisions currently in the statutes (RSMo 105.688);

(4) Creating three additional benefit options for members of either the Public School Retirement System or the Nonteacher School Employee Retirement System. One option permits members to provide 50% of actuarially reduced payments to beneficiaries. If the member is predeceased by the member's beneficiary, the retirement allowance will be increased to the amount the member would have received under the standard option known as "Option 1". Another option establishes that upon the death of a member prior to the member having received 120 monthly payments of the member's reduced allowance, the remaining monthly payments will be paid to a beneficiary designated by the member or to the member's estate. A final option is similar to the previous option except that there are 60 monthly payments of the reduced allowance; and

(5) Increasing the number of hours from 360 to 550 that a retired member of the Nonteacher School Employee Retirement System can work on a temporary-substitute basis each year without forfeiting any retirement benefits.