This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0685 - Certain Officials Entitled to Creditable Prior Service
L.R. NO. 2768-01
BILL NO. Perfected SB 685
SUBJECT: Retirement
TYPE: Original
DATE: May 1, 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 Office of Administration indicate that allowing only
individuals with non-state service as an elected county official to receive
service credit for non-state service offers a retirement portability to a
limited number of state employees and may cause the state to be vulnerable to
future litigation.
Missouri State Employees' Retirement System (MOSERS) officials indicate that
because there is no accurate means available to determine the number of
members who may be eligible to receive the prior service credit, it is
difficult to estimate an accurate cost. However, based upon the average age,
creditable service and salary of a state employee in the position of a
legislator, elected official or a high-ranking department official (MOSERS
officials assume that the likelihood that an employee previously served as an
elected county official is significantly greater in these groups), MOSERS
officials calculated the actuarial value of five years of service as follows:
Legislator (representing three biennial assemblies) -- $26,631; Elected
official -- $15,980; High-ranking department official -- $34,395. The total
calculated liability is $77,006. Therefore, if one employee from each
category shown were eligible for five years of creditable service, the
increase in MOSERS' unfunded accrued actuarial liability would be
approximately $77,006. This amount would be amortized through an increase in
the state's annual contribution rate. Officials also indicate that based on
a cursory review of the Official Manual for the State of Missouri
(1995-1996), they were able to identify seven individuals with prior service
as an elected county official, but were unable to determine if such service
was vested in another retirement plan. Officials assume, however, that this
type of service may exist for a number of people.
Oversight assumes based on the calculations of MOSERS officials for three
individuals that increases to the System's unfunded liability would likely
not be substantial enough to have any significant impact on the state's
contribution rate during the fiscal note period. The legislation applies
only to those employed on the effective date of the legislation, and does not
apply to future hires.
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 any state employee or official employed on
August 28, 1996 who served as an elected county official to receive that
prior creditable service at no cost to the employee or official, provided
such service has not become vested in a county retirement plan.
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
Office of Administration
Missouri State Employees' Retirement System