This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0496 - PSRS Employees: Termination Or Other State Employment
L.R. NO. 2329-01
BILL NO. SB 496
SUBJECT: Retirement
TYPE: Original
DATE: January 8, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
None $0 $0 $0
Total Estimated
Net Effect on All
State Funds $0 $0 $0
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Joint Committee on Public Employee Retirement (JCPER) has reviewed this
proposal and has determined an actuarial study is not needed under the
provisions of section 105.660, subdivision (5).
Officials of the St. Louis Public School Retirement System indicate that this
proposal would have no fiscal impact on their system.
Officials of the Kansas City Public School Retirement System indicate that
the proposal would have no actuarial fiscal impact on the system, but that
changes made in provisions for insurance coverage could result in the need
for an additional position in the system's personnel, as well as increased
costs to the Kansas City School District and the Kansas City Public Library.
Officials indicate that the proposal would provide for group insurance for
life for all former school and library employees who are vested in the
retirement system upon termination of their employment, but who are too young
to receive retirement benefits. Because the retirement system would not have
a means of withholding premium payments from those individuals, as it does
with retirees currently receiving benefits, the system would be required to
bill and collect premium payments from those individuals to remit to the
group health insurance provider. Officials also stated that special
communications would be required to notify such individuals of premium rate
changes and annual re-enrollments. Because of the potential growth in the
number of such individuals based on the historically high turnover within the
school district, system officials indicate that they would likely need one
additional person to handle the additional duties in these areas. In
addition, officials indicate that the cost of insurance paid by the school
district and public library for employees may be impacted by the utilization
experience of the non-employees covered by the group plan. System officials
did not provide an estimate of potential costs for additional personnel or
additional premium costs to the school district and public library.
Oversight acknowledges that this provision affects not only the Kansas City
Public School Retirement System, but also the St. Louis Public School
Retirement System and the Public School Retirement System of Missouri. For
purposes of this fiscal note, Oversight assumes that any increased
administrative costs to the retirement systems would not be significant
enough to result in a contribution rate increase to their members, including
local school districts and public libraries. Oversight also assumes that a
reasonable projection cannot be made as to whether future group insurance
premiums may increase due to the addition of former employees who would
become eligible to continue group insurance coverage as a result of this
legislation. Therefore, Oversight has shown no costs to local governments
during the fiscal note period.
Officials of the Missouri State Employees' Retirement System (MOSERS) and the
Public School Retirement System of Missouri (PSRS) also indicate that the
legislation would have no direct fiscal impact on their systems. However,
officials of MOSERS, PSRS, and the Office of Administration (OA) feel that,
given the litigation history over special provisions for certain state
employees in the retirement systems, there may be unknown costs which could
be generated for the systems and/or the state. Officials of these agencies
cited a court decision, 631 Federal Supplement 1388, Western District of
Missouri, 1986, as support for this position.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
0 0 0
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
0 0 0
DESCRIPTION
This legislation would allow members of the Public School Retirement System
(PSRS) with at least 25 years of creditable service and who subsequently
become employed in a position covered by the Missouri State Employees'
Retirement System (MOSERS) to remain in PSRS. The required member and
employer contributions to fund service under PSRS would be paid from state
appropriations to the institution by which the member is employed.
The legislation would also allow any employee who terminates employment and
who is entitled to receive retirement benefits from the public school
retirement systems to elect to continue group health insurance coverage.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Joint Committee on Public Employee Retirement
St. Louis Public School Retirement System
Kansas City Public School Retirement System
Public School Retirement System of Missouri
Missouri State Employees' Retirement System
Office of Administration