To amend chapter 174, RSMo, by enacting six new sections relating to the establishment of an optional retirement program for certain employees of the regional colleges and universities.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Chapter 174, RSMo, is amended by adding thereto six new sections, to be known as sections 174.800, 174.805, 174.807, 174.810, 174.812 and 174.815, to read as follows:

174.800. 1. The general assembly hereby finds that it is important for the regional colleges and universities to be able to attract and retain the most qualified faculty and staff to enhance the educational, service and research responsibilities of the institutions, and that in order to attract and retain such employees, the institutions of higher education should have maximum flexibility to provide an alternative retirement program under which annuity contracts, either fixed or variable or a combination thereof, providing retirement and death benefits may be purchased for eligible employees of the system.

2. As used in sections 174.800 to 174.815, the term "institutions" shall mean Truman State University, Northwest Missouri State University, Southeast Missouri State University, Southwest Missouri State University, Central Missouri State University, Harris-Stowe State College, Lincoln University, Missouri Western State College, Missouri Southern State College and the Missouri coordinating board for higher education.

174.805. 1. The provisions of chapter 104, RSMo, to the contrary notwithstanding, each institution may establish an optional retirement program to the Missouri state employees' retirement system through which annuity contracts, either fixed or variable or a combination thereof, providing retirement and death benefits will be purchased for and become the property of the eligible employees of each institution. All full-time teaching and senior administrative personnel of each institution described in section 174.800 shall be eligible employees for purposes of participating in the optional retirement plan.

2. Each institution which chooses to establish an optional retirement program shall:

(1) Provide for the administration of the program;

(2) Designate at least two but not more than three companies to which payment of such contributions may be made, taking into consideration:

(a) The nature and extent of the rights and benefits to be provided by such contracts for electing employees and their beneficiaries;

(b) The relation of such rights and benefits to the amount of the contributions to be made pursuant to sections 174.800 to 174.815;

(c) The suitability of such rights and benefits to the needs and interests of electing employees and their employing institutions;

(d) The ability and experience of the designated companies in providing contracts meeting the criteria of paragraphs (a) through (e) of subdivision (2) of this subsection; and

(e) The efficacy of the contracts in the recruitment and retention of faculty and administrators.

174.807. 1. All eligible employees of the institution may elect to participate in the optional retirement program as of the date of their employment.

2. Elections to participate in the optional retirement program shall be made as follows:

(1) Eligible employees initially appointed on or after the effective date of the establishment of this optional retirement program shall elect, within sixty days after their employment commences:

(a) To join the Missouri state employees' retirement system in accordance with the provisions of chapter 104, RSMo; or

(b) To participate in the optional retirement program established pursuant to sections 174.800 to 174.815;

(2) Eligible employees who are members of the Missouri state employees' retirement system and who were initially appointed to an eligible position subsequent to the effective date of the establishment of the optional retirement program may elect to participate in the optional retirement program in lieu of remaining members of the Missouri state employees' retirement system. This election shall be in writing and must be filed with the institution no later than sixty days after the effective date of the appointment to any eligible position. The election shall constitute a waiver of all rights and benefits for employees who are not vested at the time they terminate participation in Missouri state employees' retirement system. Employees who are vested in the Missouri state employees' retirement system at the time they terminate participation shall not forfeit their vested benefits;

(3) Any member of the Missouri state employees' retirement system who is appointed subsequent to the effective date of this act to a position for which the optional retirement program is available may elect to participate in the optional retirement plan in the same manner and subject to the same conditions as provided in subdivision (2) of subsection 2 of this section, except that the election provided for subdivision (2) of subsection 2 of this section shall be made within sixty days of the effective date of the appointment to the eligible position.

3. An election pursuant to this subsection 2 of this section shall be:

(1) In writing and filed with the institution in the manner prescribed by the institution;

(2) Accompanied by an appropriate application, where required, for the issuance of a contract or contracts under the program; and

(3) Irrevocable as long as the person is employed in any eligible position by the institution.

4. Any eligible employee electing to participate in the optional retirement program shall be ineligible for membership in the Missouri state employees' retirement system. In the event an optional retirement program participant assumes a position in public service for which the optional retirement program is not available, or the optional retirement program is terminated at any time, participants shall be automatically enrolled in the Missouri state employees' retirement system from the date on which participation terminates in the optional retirement program and shall receive no service credit, except for vesting purposes, in the Missouri state employees' retirement system for the years in which they participated in the optional retirement program.

174.810. 1. The employer contribution rate shall equal seven percent of salary for each participating employee.

2. The employee contribution shall be three percent of salary and shall be made on a before-tax basis under section 414(h) of the Internal Revenue Code of 1986, as amended.

3. Each employer shall continue to contribute to the unfunded liability of the Missouri state employees' retirement system. This amount designated for the unfunded liability shall be the same as the percentage of salary contribution for the unfunded liability for employees participating in the Missouri state employees' retirement system, but no greater than two and one-half percent. This amount shall be remitted to the Missouri state employees' retirement system and applied to the unfunded liability of that system.

4. Compensation shall include all salary and wages payable out of any state, federal, trust or other funds to an employee for personal services performed for a department, but shall not include any non-recurring single sum payments or amounts paid after the member's retirement.

174.812. No retirement, death or other benefit shall be paid by the state for services credited under the optional retirement program. Such benefits are payable to participants or their beneficiaries only by the designated companies in accordance with the terms of the contracts.

174.815. 1. As used in this section, the term "employee" shall mean as defined in section 104.010, RSMo.

2. No employee shall be eligible to claim or receive retirement benefits based on service as an employee of the state of Missouri, at the same time that the employee is employed full time by the state of Missouri.

3. The provisions of this section shall not affect the rights of any employee to claim or receive benefits payable by law to the employee as a surviving spouse or surviving dependent of any retiree who was previously employed by the state of Missouri.

4. The provisions of this section shall not affect the rights of any employee to become a member of, or claim or receive benefits from, two or more retirement systems provided by law to employees of the state of Missouri, provided that the employee has retired from employment with the state of Missouri prior to claiming or receiving benefits from any such retirement system.