S3240.02T

To repeal sections 169.010 and 169.600, RSMo 1994, and sections 169.030 and 169.620, RSMo Supp. 1995, relating to teacher retirement, and to enact in lieu thereof four new sections relating to the same subject, with an emergency clause.

Be it enacted by the General Assembly of the State of Missouri, as follows:

Section A. Sections 169.010 and 169.600, RSMo 1994, and sections 169.030 and 169.620, RSMo Supp. 1995, are repealed and four new sections enacted in lieu thereof, to be known as sections 169.010, 169.030, 169.600 and 169.620, to read as follows:

169.010. The following words and phrases, as used in sections 169.010 to 169.130, unless a different meaning is plainly required by the context, shall have the following meanings:

(1) Accumulated contributions shall mean the sum of the annual contributions a member has made to the retirement system through deductions from his salary, plus interest compounded annually on each year s contributions from the end of the school year during which such contributions were made;

(2) Board shall mean the board of trustees provided for in sections 169.010 to 169.130;

(3) Creditable service shall mean prior service or membership service, or the sum of the two, if the member has both to his credit;

(4) District shall mean public school, as herein defined;

(5) Employ shall have a meaning agreeable with that herein given to employer and employee;

(6) Employee shall be synonymous with the term teacher as the same is herein defined;

(7) Employer shall mean the district that makes payment directly to the teacher or employee for his services;

(8) Final average salary shall mean the total compensation payable to a member for any five consecutive years of creditable service, as elected by the member, divided by sixty; with the proviso that any annual compensation entering into the total compensation shall not exceed twelve thousand six hundred dollars for any year prior to July 1, 1967;

(9) Member shall mean a person who holds membership in the retirement system;

(10) Membership service shall mean service rendered by a member of the retirement system after the system becomes operative, and may include a period of service in the armed forces of the United States as provided for in section 169.055;

(11) Prior service shall mean service rendered by a member of the retirement system before the system becomes operative, and may include service rendered by a member of the armed forces if the member was a teacher at the time he was inducted, for which credit has been approved by the board of trustees;

(12) Public school shall mean any school conducted within the state under the authority and supervision of a duly elected district or city or town board of directors or board of education and the board of regents of the several state teachers colleges, or state colleges, board of trustees of the public school retirement system of Missouri, and also the state of Missouri and each county thereof, to the extent that the state and the several counties are employers of teachers as herein designated;

(13) Retirement allowance shall mean a monthly payment for life during retirement;

(14) Retirement system or system shall mean the public school retirement system of Missouri created by sections 169.010 to 169.130;

(15) Salary , salary rate or compensation shall mean the regular remuneration, including any payments made pursuant to sections 168.500 to 168.515, which is earned by a member as an employee of a district, but not including employer paid fringe benefits except the value of employer paid medical benefits for members, and not including consideration for agreeing to retire or other nonrecurring or unusual payments that are not a part of regular remuneration. The board by its rules may further define salary, salary rate and compensation in a manner consistent with this definition and with sections 169.010 to 169.141;

[(15)] (16) School year shall mean the year from July first of one year to June thirtieth of next year, inclusive, which shall also be the fiscal year of the system;

[(16)] (17) Teacher shall mean any person who shall be employed by any public school, on a full-time basis and who shall be duly certificated under the law governing the certification of teachers; any person employed in the state department of elementary and secondary education or by the state board of education on a full-time basis who shall be duly certificated under the law governing the certification of teachers and who did not become a member of the Missouri state employees retirement system under section 104.342, RSMo; and persons employed by the board of trustees of the public school retirement system of Missouri on a full-time basis who shall be duly certified under the law governing the certification of teachers. The term teacher shall be synonymous with the term employee as defined in this section.

169.030. 1. The funds required for the operation of the retirement system created by sections 169.010 to 169.141 shall come from contributions made in equal amounts by members of the system and their employers, except as provided for certain members and employers by section 104.342, RSMo, and from such interest as may be derived from the investment of any part of such contributions. All contributions shall be transmitted to the board of trustees by employers in such manner and at such time as the board by rule shall require.

2. For each school year following the date on which the system becomes operative, each and every employer of one or more persons who are members of the system shall transmit to the board of trustees, in the manner and accompanied by such supporting data as the board shall prescribe, twice the amount that is deductible from the pay of such employee or employees during the school year. Failure or refusal to transmit such amount as required shall render the person or persons responsible therefor individually liable for twice the amount so withheld. Suits for the recovery of amounts for which individuals are thus rendered liable shall be instituted and prosecuted by the board of trustees in the name of the retirement system. In addition to such civil penalty, and not in lieu thereof, any person or persons made responsible for the payment of contributions who shall willfully and knowingly fail or refuse to transmit such contributions or any part thereof to the board of trustees shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than twenty-five dollars and not more than two hundred dollars, and each day such person or persons shall so fail or refuse to transmit such contributions shall be deemed a separate offense.

3. The contributions of members of the retirement system shall be collected by their employers through appropriate deductions from paychecks, except as provided for certain members and employers by section 104.342, RSMo. The total amount deducted from the paychecks of members during any school year shall equal such a percent of their salary rates as may be required by the contribution rate then in effect. Contributions transmitted to the retirement system before the effective date of this act, based on salary rates which either included or excluded employer paid medical benefits for members, shall be deemed to have been in compliance with this section. The retirement system shall not refund or adjust contributions or adjust benefit determinations with respect to any period before the effective date of this act, solely because of the treatment of employer paid medical benefits for members. Effective December 31, 1995, compensation in excess of the limitations set forth in section 401(a)(17) of title 26 of the United States Code shall be disregarded for purposes of determining contributions under this section and calculating benefits paid by the public school retirement system of Missouri. The limitation on compensation for eligible employees shall not be less than the amount which was allowed to be taken into account under the system as in effect on July 1, 1993. For this purpose, an eligible employee is an individual who was a member of the system before July 1, 1996.

4. The contribution rate shall be three percent for the first year of the system s operation. After the first year of operation the board of trustees shall have authority to fix the level rate of contribution, not to exceed eleven and one-half percent, required for the operation of the system and to make adjustments in such rate as may thereafter be necessary; provided that if the level rate required for operation of the system shall exceed eleven and one-half percent for five consecutive years, all benefits provided herein shall be equitably reduced to such an extent that the rate required for the operation of the system shall be eleven and one-half percent.

5. Regardless of the provisions of any law governing compensation and contracts, every teacher or employee shall be deemed to consent and agree to the deductions provided herein. Payment of salary or compensation less such deduction shall be a full and complete discharge of all salary or compensation claims and demands during the period covered by such payment, except as to the benefits provided under sections 169.010 to 169.141.

169.600. As used in sections 169.600 to 169.710, unless the context clearly requires otherwise, the following words and phrases mean:

(1) Accumulated contributions , the sum of the annual contributions a member has made to the retirement system through deductions from his salary, plus interest compounded annually on each year s contributions from the end of the school year during which such contributions were made;

(2) Average compensation , as used in subdivision (3) of subsection 1 of section 169.670, shall be the total compensation paid to a member for any ten consecutive years of creditable service, or for the entire period of creditable service if less than ten years, prior to July 1, 1973, divided by one hundred twenty or by the number of months in his period of creditable service if less than ten years; provided, that in determining the total compensation, any annual compensation entering into the total shall not be less than one thousand two hundred dollars and shall not exceed ten thousand dollars;

(3) Board , the board of trustees provided for in section 169.020;

(4) Creditable service , prior service or membership service or the sum of the two if the member has both to his credit;

(5) Employee , any person regularly employed by a public school district, junior college district or by the board of trustees, as defined in sections 169.600 to 169.710, who devotes at least twenty hours per week to such employment in a position which is not covered by the public school retirement system of Missouri; provided, however, that no person shall be required to contribute to, or shall receive benefits from both the retirement system herein established and the public school retirement system of Missouri for the same services;

(6) Employer , the district or other employer that makes payment directly to the employee for his services;

(7) Final average salary , the total compensation paid to a member for any five consecutive years of creditable service divided by sixty; provided, that in determining the total compensation, any annual compensation less than one thousand two hundred dollars shall be regarded as one thousand two hundred dollars and an annual compensation for services prior to July 1, 1973, in excess of ten thousand dollars shall be regarded as ten thousand dollars;

(8) Junior college district , any public junior college district organized and operated under the provisions of sections 178.770 to 178.890, RSMo, which enters into an agreement with the board of trustees of the retirement system to include its eligible employees in the system immediately upon the effective date of the agreement;

(9) Member , a person who holds membership in the retirement system;

(10) Membership service , service rendered by a member of the system after the system becomes operative;

(11) Prior service , service rendered by a member of the retirement system before the system becomes operative and may include service as a teacher for which credit has not been claimed from the public school retirement system of Missouri;

(12) Public school district or district , any duly constituted public school district under the authority and supervision of a duly elected district or city or town board of directors or board of education, except those school districts defined in sections 169.270 and 169.410;

(13) Retirement allowance , a monthly payment for life, during retirement;

(14) Retirement system or system , the nonteacher school employee retirement system of Missouri created by sections 169.600 to 169.710;

(15) Salary , salary rate or compensation shall mean the regular remuneration which is earned by a member as an employee of a district, but not including employer paid fringe benefits except the value of employer paid medical benefits for members, and not including consideration for agreeing to retire or other nonrecurring or unusual payments that are not a part of regular remuneration. The board by its rules may further define salary, salary rate and compensation in a manner consistent with this definition and with sections 169.600 to 169.715;

[(15)] (16) School year , the year from July first of one year to June thirtieth of the next year, inclusive, which shall also be the fiscal year of the system.

169.620. 1. The funds required for the operation of the retirement system created by sections 169.600 to 169.715 shall come from contributions made in equal amounts by employees as herein defined and their employers, beginning November 1, 1965, and from such interest or income as may be derived from the investment of funds of the system. All contributions shall be transmitted to the board of trustees by employers in such manner and at such times as the board by rule shall require.

2. For each school year following the date on which the system becomes operative, each and every employer of one or more persons who are members of the system shall transmit to the board of trustees, in the manner and accompanied by such supporting data as the board shall prescribe, twice the amount that is deductible from the pay of such employee or employees during the school year. Failure or refusal to transmit such amount as required shall render the person or persons responsible therefor individually liable for twice the amount so withheld. Suits for the recovery of amounts for which individuals are thus rendered liable shall be instituted and prosecuted by the board of trustees in the name of the retirement system. In addition to such civil penalty, and not in lieu thereof, any person or persons made responsible for the remittance of contributions who shall willfully and knowingly fail or refuse to transmit such contributions or any part thereof to the board of trustees shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not less than twenty-five dollars and not more than two hundred dollars. Each day such person or persons shall so fail or refuse to transmit such contributions shall be deemed a separate offense. The board of trustees may request the employer to provide the information necessary to administer the system and to advise each member of his status.

3. The contributions of members of the retirement system shall be collected by their employers through appropriate deductions from paychecks. The total amount deducted from the paychecks of members during any school year shall equal such a percent of their salary rates as may be required by the contribution rate then in effect. For contribution purposes any annual salary rate less than one thousand two hundred dollars shall be regarded as one thousand two hundred dollars. Contributions transmitted to the retirement system before the effective date of this act, based on salary rates which either included or excluded employer paid medical benefits for members, shall be deemed to have been in compliance with this section. The retirement system shall not refund or adjust contributions or adjust benefit determinations with respect to any period before the effective date of this act, solely because of the treatment of employer paid medical benefits for members. Effective December 31, 1995, compensation in excess of the limitations set forth in section 401(a)(17) of title 26 of the United States Code shall be disregarded for purposes of determining contributions under this section and calculating benefits paid by the nonteacher school employee retirement system of Missouri. The limitation on compensation for eligible employees shall not be less than the amount which was allowed to be taken into account under the system as in effect on July 1, 1993. For the purpose of this subsection, an eligible employee is an individual who was a member of the system before July 1, 1996.

4. The contribution rate shall be three percent of earnings until July 1, 1982. After July 1, 1982, the board of trustees is authorized to fix the level rate of contribution, which shall not exceed four and one-half percent, required for the operation of the system and to make adjustments in such rate as may thereafter be necessary; provided that, if the level rate required for the operation of the system shall exceed four and one-half percent for five consecutive years, all benefits herein provided shall be equitably reduced to such an extent that the rate required for the operation of the system shall be four and one-half percent.

5. Regardless of the provisions of any law governing compensation and contracts, every employee shall be deemed to consent and agree to the deductions provided herein. Payment of salary or compensation less such deduction shall be a full and complete discharge of all salary or compensation claims and demands during the period covered by such payment, except as to the benefits provided under sections 169.600 to 169.715.

6. A person serving as an employee as defined in section 169.600, who became a member after November 1, 1965, and before July 1, 1974, and who was regularly employed to serve for twenty or more hours per week at some time during the period November 1, 1965, to July 1, 1974, may receive membership service credit for such service by paying into the system the amount, with interest at such rate as may be set by the board within the limits set by law for interest rates, the person would have contributed had the person been eligible for membership.

7. Any member who rendered service as an employee as defined in section 169.600 for a junior college district at any time between October 31, 1965, and the effective date of an agreement between the junior college and the board of trustees as provided in section 169.600 may elect to purchase membership service credit for that service. The election shall include all service for which the member is eligible to purchase credit, and shall be made within five years of August 28, 1991, or within five years of the date on which membership in the system is established following the service, whichever is later, and prior to retirement. The purchase shall be effected by the member s paying to the system with interest, and within the time period allowed by law for the election, the contributions which would have been deducted from the employee s salary had the employee been a member during the period or periods of such service, and had the contribution rate in effect at the date of election been in effect at the time the service was rendered. Other provisions of law to the contrary notwithstanding, no membership credit shall be allowed under the provisions of this section which exceeds in length the member s creditable service for employment rendered after October 31, 1965.

Section B. Because of the necessity of clarifying the basis for contributions to the public school retirement system, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.