Fiscal Note - SB 0390 - New COLAs For Hwy. & Transp. Employees' & Hwy. Patrol Ret. System Members After They Reach the Current COLA Maxim
L.R. NO. 1557-01
BILL NO. SB 390
SUBJECT: Retirement Systems
TYPE: Original
DATE: February 26, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($311,038) ($373,246) ($373,246)
Riverboat Gaming
Fund ($207,358) ($248,830) ($248,830)
Highway Fund ($10,276,888) ($12,332,265) ($12,332,265)
Total Estimated
Net Effect on All
State Funds ($10,795,284) ($12,954,341) ($12,954,341)
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
Local Government $0 $0 $0
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) prior to
final action by either legislative body or committee thereof.
Officials of the Office of Administration assume an actuarial study would be
required to determine fiscal impact from this proposal.
Officials of the Highways and Transportation Employees' and Highway Patrol
Retirement System (HRS) obtained an actuarial cost analysis of this
legislation. That analysis indicated that the total estimated cost of
changes to the System's cost of living (COLA) provisions would be $12,954,131
annually to the Department of Transportation (DOT) and the Department of
Public Safety - Missouri Highway Patrol (MHP). HRS officials determined that
DOT contributions to HRS would increase by $8,807,165 annually, and MHP
contributions would increase by $4,147,176 annually. The funds to be charged
are shown below.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Costs-Department of Public Safety-
Missouri Highway Patrol
Increased contributions to HRS ($311,038) ($373,246) ($373,246)
RIVERBOAT GAMING FUND
Costs-Department of Public Safety-
Missouri Highway Patrol
Increased contributions to HRS ($207,358) ($248,830) ($248,830)
HIGHWAY FUND
Costs-Department of Transportation
Increased contributions to HRS ($7,339,304) ($8,807,165) ($8,807,165)
Costs-Department of Public Safety-
Missouri Highway Patrol
Increased contributions to HRS ($2,937,584) ($3,525,100) ($3,525,100)
NET EFFECT ON HIGHWAY FUND ($10,276,888) ($12,332,265) ($12,332,265)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
0 0 0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
The proposal would modify the current structure for cost-of-living
adjustments (COLA's) for members of the Highways and Transportation
Employees' and Highway Patrol Retirement System so that when a retiree
reaches the current 65% cumulative cap on COLA's, a new structure of 80% of
the increase in the consumer price index (CPI) with an annual maximum of 5%
would take effect. For employees hired after the effective date, COLA's
would be equal to 80% of the increase in the CPI with an annual maximum of
5%.
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
Highways and Transportation Employees' and Highway Patrol Retirement System
This Fiscal Note is not an official copy and should not be quoted or cited.