Fiscal Note - SB 0282 - Changes to the St. Louis Police Retirement System
L.R. NO. 1122-01
BILL NO. SB 282
SUBJECT: Police Retirement
TYPE: Original
DATE: February 4, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
State Funds $0 $0 $0
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
City of St. Louis $0 ($0 to $1,230,000)($0 to $1,230,000)
FISCAL ANALYSIS
ASSUMPTION
The Joint Committee on Public Employee Retirement (JCPER) has reviewed this
proposal and has determined that it represents a ''substantial proposed
change'' in future plan benefits, and accordingly, an actuarial study is
needed under the provisions of section 105.660, subdivision (5) before any
final action may be taken by either legislative body or committee thereof.
Officials of the Office of Administration assume that any increase in the
funding formula and in the contribution required of the City of St. Louis
could violate the provisions of Article X, Section 21 of the Missouri
Constitution.
St. Louis Police Retirement System officials provided an actuarial cost study
which indicated that the provisions of the proposal increasing the cap on
cumulative cost-of-living adjustments and requiring the return of
contributions to disability retirees would result in immediate costs to the
System of $10.6 million. This cost would be represented by a reduction of
the System's surplus in that amount assuming the surplus will be adequate to
cover this amount. The City of St. Louis is required to fund any excess of
total System liabilities over total assets at the time the annual actuarial
valuation is made. Consequently, contributions by the City of St. Louis
would increase annually by an amount of up to $1,230,000, depending on the
System's surplus at the time of its annual valuation. The actuarial analysis
indicated that the contribution increase would not be expected to occur until
the City's fiscal year 1999.
City of St. Louis officials also indicated that the potential could exist
that the surplus would not be great enough to absorb the $10.6 million cost
at the time the legislation goes into effect. If that were the case, the
City would be required to immediately fund the shortfall.
Oversight assumes for fiscal note purposes that the System's surplus would be
adequate to cover the $10.6 million additional cost as indicated by the
actuary, and that the City's contribution would likely not increase until FY
1999. Oversight also assumes that there would not be potential costs to the
state as a result of violating Article X, Section 21 since the proposal
specifies that if it is determined that any provision of the legislation
would violate that section of the Constitution, then the related benefits
will not be payable.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
0 0 0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
CITY OF ST. LOUIS
Costs-increased contributions to St. Louis ($0 to ($0 to
Police Retirement System $0 $1,230,000) $1,230,000)
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
The proposal would increase the maximum cumulative cost-of-living adjustments
for members of the St. Louis Police Retirement System from 25% to 30%. It
would also provide for the return of contributions to members upon 100%
accidental disability.
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
St. Louis Police Retirement System
City of St. Louis
This Fiscal Note is not an official copy and should not be quoted or cited.