Fiscal Note - SB 0309 - PSRS & NTRS: Part-Time Emp., Purchase Of Service Credit, Pymt. of Acct. Balances To Estates, Elec. Funds Transfer
L.R. NO. 1258-03
BILL NO. Truly Agreed to and Finally Passed HCS for SB 309
SUBJECT: Retirement Systems: Schools
TYPE: Original
DATE: April 22, 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
School Districts (Unknown) (Unknown) (Unknown)
FISCAL ANALYSIS
ASSUMPTION
The Joint Committee on Public Employee Retirement (JCPER) has reviewed this
proposal and has determined that it does not represent a ''substantial
proposed change'' in future plan benefits, and accordingly, an actuarial
study is not needed under the provisions of section 105.660, subdivision (5).
Officials of the Office of Administration indicated that any fiscal impact
would have to be determined by the Public School Retirement System.
Officials of the St. Louis Public School Retirement System and the Kansas
City Public School Retirement System indicate that the proposal would have no
fiscal impact to their Systems.
Officials of the Public School Retirement System (PSRS) indicate that the
retirement system does not maintain or have ready access to data concerning
dental and vision benefits provided by its covered employers. PSRS has
instructed school districts to exclude dental and vision benefits from the
salary base in calculating their required retirement contributions, but
officials believe it is likely that a number of school districts do already
include such benefits in the calculation. Officials assume it is likely that
the proposal does not constitute a "substantial proposed change" in plan
benefits as defined in section 105.660 RSMo. Therefore, it is assumed that
the proposal would have no actuarial cost impact to the system.
Oversight assumes that additional costs would be incurred by those school
districts that do provide dental and or vision benefits to their employees
but do not include those amounts in the salary base when calculating
retirement contributions, as this proposal would require. The additional
cost would be represented by the districts' portion of the contribution rate,
10.5% for teachers and 4.3% for nonteachers, multiplied by the amount of
these benefits. Oversight contacted several school districts covered by PSRS
to determine if they offer dental and vision benefits to employees and if the
amounts paid for those benefits are included in the retirement calculation.
Springfield Public School District officials indicated that the district
provides dental benefits (no vision benefits) and does presently include
those benefits as salary when calculating retirement contributions.
Jefferson City Public School District officials indicated that the district
does not pay for either dental or vision benefits for its employees.
Columbia Public School District officials indicated that they provide dental
benefits to employees, and those benefits are now included in the salary base
for purposes of calculating retirement contributions. Although the school
districts contacted would not incur increased costs as a result of the
legislation since they already calculate their retirement contributions as
the proposal requires, Oversight assumes that there could be some districts
that do not presently include employer-provided dental and vision benefits in
the calculation. Therefore, possible unknown costs are reflected to local
school districts. Oversight has not reflected potential costs to the state
for reimbursement under Article X, Section 21 of the Missouri Constitution to
those districts that may have increased costs, based on the assumption that
the amount of any increased costs per district would likely be insignificant,
and reimbursement would not likely be sought through court action.
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.)
SCHOOL DISTRICTS
Costs-possible increased contributions to
Public School Retirement System (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would make several technical revisions to provisions governing
the Public School Retirement System of Missouri. Revisions include requiring
the payment of benefits by electronic funds transfer (unless another
Board-approved method is appropriate) and allowing the System's board to set
a maximum percentage increase in annual compensation from one year to the
next in the final average salary period for both teacher and nonteacher
members.
The proposal would include dental and vision benefits as medical benefits
included in the definition of "salary" under the Public School Retirement
System.
The proposal would provide for former members of the St. Louis Public School
Retirement System with at least five years of creditable service to reinstate
prior service credit by re-paying the amount of previously refunded
contributions with interest and maintaining seven years of continuous
employment.
This proposal would clarify the lifetime full payment benefit plan for the
Kansas City Public School Retirement System, as well as revise provisions
applicable to that system, the St. Louis Public School Retirement System and
the state Public School Retirement System regarding the purchase of
equivalent credit under system rules by persons who have been members of
another public school retirement system. Members of any retirement system
governed by Chapter 169 RSMo who are within five years of eligibility for
retirement may purchase additional creditable service by paying the amount
required by the rules of the respective system.
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
Public School Retirement System
St. Louis Public School Retirement System
Kansas City Public School Retirement System
This Fiscal Note is not an official copy and should not be quoted or cited.