HS/HCS/SCS/SB 501 - This act modifies provisions of the Public School Retirement System (PSRS) and the Non-Teachers Retirement System (NTRS).

PROVISIONS APPLICABLE TO BOTH PSRS AND NTRS - This act extends the eligibility for the modified "25-and-out" retirement option for members for two more years (until July 1, 2000). Currently such eligibility expires July 1, 1998.

PSRS BOARD OF TRUSTEES - The act revises the membership of the Board of Trustees of PSRS. The Board currently includes seven members: two members appointed by the State Board of Education, four members elected by the members and retirees of PSRS and NTRS and the Commissioner of Education. Under the act, current appointed and elected members shall serve the remainder of their terms. The new board shall consist of seven members. New members shall be selected as follows: three members appointed by the Governor with advice and consent of the Senate, the first of whom shall replace the Commissioner of Education and the other two to replace members appointed by the State Board of Education and all of whom shall be residents of school districts in PSRS but shall not be a state official or a state or school district employee and at least one of whom shall be a retired member of PSRS or NTRS; and four members elected by members of PSRS and NTRS, one of whom is a member of NTRS and three of whom are members of PSRS. Terms of new members shall be for four years.

PROVISIONS APPLICABLE TO PSRS - Currently, the multiplier for an eligible regular retirement allowance is computed by 2.3 percent of the member's final average salary for each year of service. This act changes the multiplier to 2.5 percent.

The multipliers for retirees with at least 25 years of service and less than 30 years are increased as follows:

Years of Service Current Multiplier New Multiplier 25 but less than 26 2.00% 2.20% 26 but less than 27 2.05% 2.25% 27 but less than 28 2.10% 2.30% 28 but less than 29 2.15% 2.35% 29 but less than 30 2.20% 2.40%

CURRENT RETIREES AND SURVIVORS. This act gives an increase of 8.7% to current PSRS retiree's or survivor's monthly retirement benefit, which is not applied to the COLA limit.

PROVISIONS APPLICABLE TO NTRS - COLA. Currently, the total of increases (maximum COLA) is 65 percent of the original retirement allowance. This act changes the maximum COLA to 75%.

An additional "Social Security-Adjusted/Level Income Option" is established. This option provides variable monthly benefits which, in conjunction with Social Security benefits, will provide level or nearly level retirement income to the member for life and to an appropriate beneficiary designated by the member.

GENERAL - The act revises section 169.597 which provides that the Board of Trustees of PSRS or a political subdivision may seek a declaratory judgment that certain benefits added when such section was adopted are in violation of Article X, section 21 of the Missouri Constitution and constitute an unfunded mandate. If the benefits are determined to be unconstitutional, then the obligations of the PSRS to provide such benefits are also terminated. The act extends this provision to any new benefit or increase pursuant to Chapter 169, RSMo. (This language is also contained in HCS/SB 761)

This act contains an emergency clause, with an effective date of July 1, 1998, or the date the act is signed by the Governor, whichever occurs last.

The portions of this act applicable to PSRS are similar to SB 500 (1998).
OTTO FAJEN