SCS HCS HB 356 -- STATE EMPLOYEE RETIREMENT

This bill deletes an option for Conservation Department
employees but adds back similar provisions applicable to any
general employee member of the Missouri State Employees'
Retirement System (MOSERS), including Conservation Department
employees, who terminated employment on or after October 1,
1984, to allow an unreduced member annuity and 50% benefit for
the surviving spouse.  This option is also available to retired
members, and such members will receive a lump-sum payment for
the difference the member would have received had the option
been available at retirement.  The reduction factor associated
with option 1 (joint and 100% survivor benefit) will be adjusted
to reflect the unreduced joint and 50% survivor benefit (option
2) as the normal form of payment.

Members of the MOSERS, transportation department/highway patrol,
administrative judges/legal advisors, and judicial retirement
systems employed on or after August 28, 1997, and their
survivors will receive a cost-of-living increase keyed to 80% of
the increase in the consumer price index, not to exceed 5% of
the previous benefit.  Members employed before August 28, 1997,
and their survivors will receive a cost-of-living increase on
the same basis, effective when they reach the 65% cap on total
annual increases.  Current retirees and their survivors are
included as special consultants eligible for the increase when
they reach the cap.

Effective July 1, 1998, MOSERS will administer the judicial
retirement system's employer contributions in the same manner as
MOSERS is administered, rather than paying the requisite funds
from general revenue.

Currently, vested members of MOSERS with less than 10 years of
service who have left state employment may elect a lump-sum
payment of the present value of a deferred annuity.  The bill
adds administrative law judges/legal advisors and judges,
stipulates that the member must have left employment for a
period of 6 months or longer, and places a $10,000 cap on the
lump-sum amount.  Judges and administrative law judges are also
permitted, upon subsequent employment in a position covered by
MOSERS, to purchase creditable service.

Members of MOSERS continuing employment covered by the system or
continuing service in the General Assembly after age 65 are
currently eligible for all cost-of-living adjustments between
reaching age 65 and the member's retirement date; under the
bill, the amount is calculated from the date the member left
employment rather than the retirement date.  Under options 1 and
2 allowing an annuity for a member's spouse, the bill stipulates
that the spouse is the person to whom the member was married at
the date of retirement and was named in the retirement
application.  Former employees receiving disability income from
MOSERS or the transportation/highway patrol system may apply for
special consultant status and receive an amount toward medical
benefit coverage, pursuant to appropriations.

The bill also contains many provisions that make minor
administrative changes and corrections.  Most of these changes
supply inadvertently omitted language, delete obsolete language,
correct dates, or clarify existing policies.  Among other
changes, the bill:

(1)  Adds definitions of "biennial assembly" and "full biennial
assembly";

(2)  Clarifies normal retirement age;

(3)  Explains how to calculate military service and brings the
definition of what constitutes such service into line with
federal requirements;

(4)  Calculates division of benefits orders from the date of the
dissolution of marriage, rather than from the date of the order;

(5)  Clarifies the benefit formula for certain members who had
service that was not covered by Social Security;

(6)  Permits a surviving spouse to designate the recipient of a
final payment of benefit; permits a lump-sum distribution if a
beneficiary dies before receiving the remainder of the 120 or 60
monthly payments; and permits a member to select a beneficiary
to receive a final payment if there is no survivor annuity
payable;

(7)  Raises member-paid life insurance coverage to 6 times
annual compensation and makes spouse/dependent coverage
available on an optional basis;

(8)  Changes the attendance policy of the MOSERS board to
require an excuse for each absence after 3 consecutive absences;

(9)  Clarifies the calculation of compensation for
administrative law judges, legal advisors, and judges, based on
the law in effect when the judge or advisor retires; for judges,
the highest court on which the judge has served is used; and

(10)  Prohibits benefits to any survivor or beneficiary charged
with the intentional killing of a member.

HCS HB 356 -- STATE RETIREMENT (Skaggs)

This substitute deletes an option for Conservation Department
employees but adds back similar provisions applicable to any
general employee member of the Missouri State Employees'
Retirement System (MOSERS), including Conservation Department
employees, who terminated employment on or after October 1,
1984, to allow an unreduced member annuity and 50% benefit for
the surviving spouse; this option is also available to retired
members.  Such members will also receive a lump-sum payment for
the difference the member would have received had the option
been available at retirement.

Members of the MOSERS, transportation department/highway patrol,
administrative judges/legal advisors, and judicial retirement
systems employed on or after August 28, 1997, and their
survivors will receive a cost-of-living increase keyed to 80% of
the increase in the consumer price index, not to exceed 5% of
the previous benefit.  Members employed before August 28, 1997,
and their survivors will receive a cost-of-living increase on
the same basis, effective when the retiree reaches the 65% cap
on total annual increases.  Current retirees and their survivors
are included as special consultants eligible for the increase
when they reach the cap.

Effective July 1, 1998, MOSERS will administer the judicial
retirement system's employer contributions in the same manner as
MOSERS is administered, rather than paying the requisite funds
from general revenue.

Currently, vested members of MOSERS with less than 10 years of
service who have left state employment may elect a lump-sum
payment of the present value of a deferred annuity.  The
substitute adds administrative law judges/legal advisors and
judges, stipulates that the member must have left employment for
a period of 6 months or longer, and places a $10,000 cap on the
lump-sum amount.  Judges and administrative law judges are also
permitted, upon subsequent employment in a position covered by
MOSERS, to purchase creditable service.

Members of MOSERS continuing employment covered by the system or
continuing service in the General Assembly after age 65 are
currently eligible for all cost-of-living adjustments between
reaching age 65 and the member's retirement date; under the
substitute, the amount is calculated from the date the member
left employment rather than the retirement date.  Under options
1 and 2 allowing an annuity for a member's spouse, the
substitute stipulates that the spouse is the person to whom the
member was married at the date of retirement.  Under the 120-
and 60-month options, if the beneficiary dies before receiving
the remainder of the payments, the reserve is paid to the
beneficiary's estate.  Former employees receiving disability
income from MOSERS or the transportation/highway patrol system
may apply for special consultant status and receive an amount
toward medical benefit coverage, pursuant to appropriations.

FISCAL NOTE:  Net Cost to General Revenue Fund of $57,472,000
for FY 1998, $57,534,645 for FY 1999, and $57,534,645 for FY
2000.  Cost to Riverboat Gaming Fund of $208,815 for FY 1998,
$250,578 for FY 1999, and $250,578 for FY 2000.  Net Cost to
Highway Fund of $10,530,126 for FY 1998, $12,655,689 for FY
1999, and $12,676,595 for FY 2000.

HCS HB 356 -- STATE RETIREMENT

CO-SPONSORS: Hagan-Harrell (Skaggs)

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Retirement by a vote of 8 to 0.

Members of the Missouri State Employees' Retirement System
(MOSERS) who continue employment covered by the system or
continue service in the General Assembly after age 65 are
currently eligible for all cost-of-living adjustments between
reaching age 65 and the member's retirement date; under the
substitute, the amount is calculated from the date the member
left employment rather than the retirement date.  Under options
allowing a reduced annuity for a member's spouse, the substitute
stipulates that the spouse is the person to whom the member was
married at the date of retirement.  Under the 120- and 60-month
options, if the beneficiary dies before receiving the remainder
of the payments, the reserve is paid to the beneficiary's estate.

The substitute deletes an option for Department of Conservation
employees but adds back similar provisions applicable to any
employee, including Conservation employees, who terminated
employment on or after October 1, 1984, to allow an unreduced
member annuity and 50% benefit for the surviving spouse for
general employees, as well as retired members.  The substitute
adds administrative law judges, legal advisors, and judges with
less than 10 years of creditable service to those vested members
eligible to elect a deferred annuity.  Judges and administrative
law judges are also permitted, upon subsequent employment in a
position covered by MOSERS, to purchase creditable service.
Former employees receiving disability income from MOSERS or the
transportation/highway patrol system may apply for special
consultant status and receive an amount toward medical benefit
coverage, pursuant to appropriations.

Beginning January 1, 1998, members of the MOSERS, transportation
department/highway patrol, administrative judges/legal advisors,
and judicial retirement systems employed before August 28, 1997,
will receive a special consultant's cost-of-living increase
keyed to the increase in the consumer price index, effective
only when the retiree reaches the limit on total annual
increases.  These cost-of-living provisions also apply to
members employed on or after August 28, 1997, and to their
survivors.

Effective July 1, 1998, MOSERS will administer the judicial
retirement system's employer contributions in the same manner as
MOSERS is administered, rather than paying the requisite funds
from general revenue.

FISCAL NOTE:  Net Effect Cost to General Revenue Fund of
$57,160,962 in FY 1998, $57,261,399 in FY 1999, & *$57,261,399*
in FY 2000.  Cost to Riverboat Gaming Fund of $1,457 in FY 1998,
$1,748 in FY 1999, & $1,748 in FY 2000.  Net Cost to Highway
Fund of $253,238 in FY 1998, $323,424 in FY 1999, & $344,330 in
FY 2000.  *Does not include unknown costs for Missouri
Consolidated Health Care Plan for health insurance subsidies,
expected to exceed ($100,000) annually.

PROPONENTS:  Supporters say that the Governor's Task Force on
Total Compensation has endorsed this bill.  About 2,000 members
have an unreduced/50% survivor option while 51,000 don't, so
there is an equity issue involved that has resulted in a lawsuit
that the substitute should remedy. About one-third of retirees
are at the COLA cap.  The substitute puts the COLA on a funding
basis and places new hires in at 80% of the consumer price index
with no cumulative maximum.

One supporter advocated removing the 1984 retirement date from
the survivors' benefits, since many women whose spouses retired
before then are the ones whose own pensions are inadequate and
thus would stand to benefit from the extension of the benefit.

Testifying for the bill were Representative Skaggs; Missouri
State Employees' Retirement System; and Wendy Noren.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Research Analyst

HB 356 -- State Retirement Systems

Sponsor:  Skaggs

Members of the Missouri State Employees' Retirement System
(MOSERS) continuing employment with an agency covered by the
system or continuing to serve in the General Assembly after the
age 65 who currently are eligible for the total of all cost-of--
living adjustments occurring between the date when the member
reached age 65 and the member's retirement date will instead
have the amount calculated from the date the member left
employment.  Under the options that allow a reduced annuity for
a member's spouse, the bill stipulates that the spouse is the
person to whom the member was married at the date of
retirement.  Under the 120- and 60-month options, if the
beneficiary dies before receiving the remainder of the payments,
the reserve is paid to the beneficiary's estate.  The bill
deletes an option for conservation department employees but adds
back similar provisions applicable to any employee, including
conservation department employees, who terminated employment on
or after October 1, 1984. This option allows an unreduced member
annuity and 50% benefit for the surviving spouse for general
employees, as well as retired members.

Beginning January 1, 1998, members of the MOSERS/transportation
department/highway patrol, administrative judges/legal advisors,
and judicial retirement systems who were employed before August
28, 1997, will receive a special consultant's cost-of-living
increase keyed to the increase in the consumer price index. The
increase is effective only when the retiree reaches the limit on
total annual increases.  These cost-of-living provisions also
apply to members employed on or after August 28, 1997, and to
their survivors.