CCS SS SCS HB 65 -- RETIREMENT SYSTEMS

This bill makes changes in several retirement systems.

MISSOURI STATE EMPLOYEES RETIREMENT SYSTEM YEAR 2000 PLAN

The Year 2000 Plan will be applicable to new employees who begin
work July 1, 2000; persons currently covered by MOSERS and the
Transportation Department and Highway Patrol Retirement System,
both active employees and those already retired, will be given
comparison information about the existing and new plans and will
be allowed to choose the Year 2000 Plan if they wish.  Among the
plan's major provisions are the following:

(1)  Eligibility when age plus years of service equals 80, or
age 62 with 5 years of service, in place of age 65 with 5 years
of service under the current plan;

(2)  A multiplier of 1.7% of final average pay times years of
service, in place of the current 1.6%;

(3)  Eligibility for early retirement at age 57 with 5 years of
service, in place of the current age 55 with 10 years of service;

(4)  A temporary annuity multiplier of .8% for persons retiring
early (age 50) that raises benefits until early Social Security
benefits are available (age 62);

(5)  Four survivor benefit options that reduce the annuity
during the retiree's lifetime;

(6)  Death in service benefits to the surviving spouse of 100%
and to dependent children under certain circumstances for
members with 5 years of service, the same as the current plan.
If the death is duty-related, no minimum years of service are
required and the benefit is 50% of final pay;

(7)  Cost-of-living increases of 80% of the increase in the
consumer price index, a yearly maximum of 5%, also applicable to
surviving spouses, beneficiaries, and former spouses receiving
all or part of an annuity.  (The COLA calculation is the same as
for the current plan for members hired after August 28, 1997.);

(8)  Life insurance of $15,000 per employee and $5,000 per
retiree and voluntary additional insurance up to 6 times the
person's annual pay, the same as the current plan.  Triple
indemnity will apply for duty-related death;

(9)  Long-term disability benefits that permit the accrual of
service until eligibility for normal retirement, as with the
current plan, with rate of pay for retirement being the member's
pay at the time of disability, indexed for inflation; and

(10)  For members of the General Assembly at age 55 having at
least 4 years of service, benefits of 1/24 (4.17%) of monthly
pay times years of credited service, as opposed to the current
requirement of 6 years of service and a rate of $150 per month
times the number of general assemblies served.  A cap of 100% of
pay is placed on the retirement benefit for members and
beneficiaries, and benefits under the current and new plans are
not payable to any member serving on or after August 28, 1999,
based on service after that date, who is convicted of a felony
while in the performance of duty.

The bill specifies several sections of the existing MOSERS and
Transportation and Highway Patrol retirement plan statutes as
applicable to the Year 2000 Plan; defines the jurisdiction of
the boards of the system; provides for determination of credit
from multiple plans, previous city or county service, and other
sources; describes how annuities may be divided upon divorce;
and sets out several technical provisions for the administration
and investment of assets.

CURRENT MOSERS PLAN

Among the major changes made in the current plan for state
employees are the following:

(1)  UNREDUCED JOINT AND 50% SURVIVOR OPTION.  Several
categories of survivors, former deferred vested members, and
members who retired and then became reemployed, who were not
made eligible for the unreduced joint and 50% survivor option in
1997, are now eligible for that benefit.  In some instances, a
lump-sum payment is also provided;

(2)  DISABILITY.  The rate of pay for a person becoming disabled
on or after August 28, 1999, will be the pay rate at the time of
disability, increased for inflation by 80% of the increase in
the consumer price index;

(3)  DEATH BENEFIT.  For a duty-related death the spouse or, in
the absence of a surviving spouse, dependent children will
receive a 50% benefit.  No vesting is required for this
benefit.  Triple indemnity insurance will apply for duty-related
death;

(4)  COLAS.  COLAs paid to survivors and to members retiring
after July 1, 2000, are effective on the anniversary date of the
member's retirement;

(5)  PURCHASE OF SERVICE.  Uniformed members of the Highway
Patrol may purchase certified peace officer service; all members
may purchase up to 4 years of nonfederal public service;

(6)  LEGISLATIVE PENSIONS.  The current rate of $150 per month
times the number of terms is raised to $175; and

(7)  OTHER PROVISIONS.  Certain retirees may elect a survivor
option if they were married for at least a year before they make
the election and make such election within 6 months of
circumstances detailed in the bill.  Part-time employment after
retirement is clarified.  When amounts owing to members remain
unclaimed for 4 years, the amount reverts to the system.  These
amounts may be claimed later, but without interest.

JUDGES AND ADMINISTRATIVE LAW JUDGES

The bill permits administrative law judge retirement for former
administrative hearing commissioners and changes the current
service and age requirements of 65 years of age with 12 years of
service to 62, and adds age 60 with 15 years of service; and
provides normal retirement for judges at age 55 with 20 years of
service.

PUBLIC SCHOOL RETIREMENT SYSTEM/TEACHERS

The definition of final average salary is changed from 5 to 3
years.  The rule of 80 (years of creditable service plus age) is
added to the provisions on eligibility for retirement.  Minimum
benefit provisions are extended to beneficiaries.  The bill
extends the current $2 per month times years of service benefit
to the beneficiaries of retired members who died before the
effective date of the bill and, as of September 1, 1999, to
beneficiaries of deceased members.  The current limit of $60 per
month applies.  A new benefit of $5 per month times years of
service is added for persons retired before the effective date
of the bill and the beneficiaries of retired members who died
before the effective date of the bill.  A $5,000 death benefit
for any member who has retired is created.  Monthly minimum and
maximum surviving spouse and dependent child benefits are
increased, a definite minimum payment of $300 for the surviving
spouse is created, and children in school full-time are eligible
to age 24, rather than 22.  Surviving parent benefits are also
increased.

Under current law, retired teachers may work on a part-time or
temporary-substitute basis for up to 550 hours per school year;
the bill adds that a retired teacher may earn up to 50% of the
annual compensation payable under the district's salary schedule
for the position filled by the retiree and also provides means
for determining salary for a position not on the schedule, for
newly created positions, and for retirees filling multiple
positions.

NONTEACHERS

The bill raises the multiplier for nonteacher retirement
benefits from 1.35 to 1.45 percent of the member's final average
salary.  The multiplier for members who retire with less than 30
years of service but more than 25 years also will be increased
by ten-hundredths of a percent.  Members who retired before the
effective date of the bill and the designated beneficiaries of
deceased retired members may be made special consultants, to
receive a payment equal to 7.4% of the previous month's benefit
which will not be subject to the cost-of-living cap.  The bill
also makes a change to the nonteacher system for certain members
who were certified as vocational-technical teachers.

BOTH TEACHER AND NONTEACHER SYSTEMS

Currently, the surviving spouse is eligible for certain survivor
options; the bill changes "spouse" to a person named by the
member as the primary beneficiary with an insurable interest in
the life of the deceased member.  In a new section, the bill
permits retired teachers and nonteachers, except those retired
on disability, to establish a second or subsequent membership in
the system after a one-year vesting period.  Such membership is
separate and not combineable for service credit or benefits with
a previous membership.  Such members will not draw a benefit
from their first membership while in covered employment.  The
bill has an emergency clause for the teachers/nonteachers
provisions to become effective upon approval or July 1, 1999,
whichever happens later.

COUNTY EMPLOYEES' RETIREMENT FUND

The bill substantially revises the provisions of the County
Employees' Retirement Fund, effective January 1, 2000, changing
the basis of the benefit from a defined benefit of 1.5% of final
average salary times years of service for non-LAGERS counties
(1% in LAGERS counties) to a flat-dollar benefit of $24 per year
of service up to 25 years or an amount correlated to target
replacement ratios for 4 tiers of average final compensation.
LAGERS county employees will receive benefits at 2/3 of the non--
LAGERS level.

On or after January 1, 2000, persons who have not already opted
out of the system and new hires will be members.  Non-LAGERS
members contribute 2% through payroll deduction.  The bill sets
out procedures for opting back in and for purchasing creditable
service.  Those who do not purchase service will be vested after
8 years of subsequent uninterrupted service.

Currently, 2 benefit options exist; under the bill, 100%, 75%,
and 50% survivor options for the reduced annuity are provided.
A reduced annuity is available for members who terminate
employment at or after age 55.  The normal retirement age of 62
with 8 years of vesting remains unchanged.  Automatic cost-of--
living adjustments not to exceed 1%, rather than the current 2%,
are provided.  The 2-year marriage limit is removed; members may
not change benefit form or beneficiary after beginning benefits.

The board will make contributions to defined contribution
accounts beginning in 2000, and non-LAGERS employees must make
such contributions at .7%.  Criteria for matching contribution
from the board are specified.  A member leaving with less than 5
years of service forfeits the matching contributions.  The bill
permits rollovers.

The bill also expands the board of the retirement system from 9
to 11 members; the 2 additional members cannot have a
beneficiary interest in the system.

LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM

Currently, members of the Local Government Employees' Retirement
System (LAGERS) who are also members of the prosecuting and
circuit attorneys' system have the amount of their LAGERS
benefit deducted from the amount of their prosecuting and
circuit attorney's benefit; the bill changes the deduction for
those retiring after August 28, 1999, to 1/3 of the LAGERS
amount.

ST. LOUIS POLICE RETIREMENT

The bill makes changes to several provisions relating to the St.
Louis Police Retirement System.  An additional 5% for service
after 30 years is added to the service retirement allowance, and
the benefit cap raised from 70% to 75% of final compensation.
Special consultants' benefits are increased from $550 to $650
per month.  Present and future widows may become advisors for a
monthly benefit of $10 per month times the number of years the
widow is past age 60.  Ordinary disability retirement allowances
and combined benefits for multiple dependents are increased.
Members receiving disability retirement benefits immediately
prior to October 1, 1999, will receive an additional benefit the
greater of $100 or 5% of the member's average final compensation
for each unmarried dependent child.  For the death of a member
in service and for death of a retired member, the widow's
pension is increased for each unmarried dependent child.  Widows
and dependent children of members in the above categories
receiving benefits immediately before October 1, 1999, will
receive increases.  Benefits for widows of members who retired
before age 55 or before completing 20 years of service were set
at 30%; this limitation has been removed; benefits payable to
widows of members who had attained 55 or completed 20 years of
service are to be increased by the method set out for
adjustments to service allowances of retired members.  Benefits
for widows and dependent children of members who died as the
result of a duty-related accident are increased.  Dependent
children already receiving benefits immediately prior to October
1, 1999, will receive the greater of $100 or 5% of the deceased
member's average final compensation.

The widow or unmarried children of a member participating in the
deferred retirement option plan (DROP) who has died in the
performance of duty may elect to receive the member's DROP
amount as an annuity.  Technical changes concerning Internal
Revenue Service limitations and constitutional revenue
limitations are also included.

ST. LOUIS FIREFIGHTERS

A member of the St. Louis Firefighters retirement system may
elect upon retirement to place in his or her DROP account an
amount equivalent to accumulated sick leave hours multiplied by
hourly pay rate at the time of retirement.  Credit for sick
leave for working members will be earned at a rate no less than
the rate of June 1, 1999, rather than the rate of August 28,
1989.  This portion of the bill has an emergency clause, to
become effective on passage or July 1, 1999, whichever is later.

HB 65 -- ST. LOUIS POLICE RETIREMENT (O'Toole)

This bill makes changes to several provisions relating to the
St. Louis Police Retirement System.  Ordinary disability
retirement allowances will be increased by 15%, rather than the
current 10%, of the member's final average compensation for each
unmarried dependent child.  The combined benefit for multiple
dependents will not exceed 70%, rather than the current 55%.
Members receiving disability retirement benefits immediately
prior to October 1, 1999, will receive an additional benefit the
greater of $100 or 5% of the member's average final compensation
for each unmarried dependent child.  For the death of a member
in service and for death of a retired member, the widow's
pension is increased from 25% to 50% of the member's average
final compensation plus 15%, rather than the current 10%, for
each unmarried dependent child.  Widows and dependent children
of members in the above 2 categories receiving benefits
immediately before October 1, 1999, will receive increases.
Dependent children will receive the greater of $100 or 5% of
average final compensation.  Widows of members who died in
service will receive 25% of the member's final average
compensation, while widows of members who retired in service or
disability will receive an additional amount that increases
their benefit to 50% of the member's compensation.  Benefits for
widows of members who retired before age 55 or before completing
20 years of service were set at 30%; this limitation has been
removed; benefits payable to widows of members who had attained
55 or completed 20 years of service are to be increased by the
method set out for adjustments to service allowances of retired
members.  Benefits for dependent children of a member who died
as the result of an accident are increased from 10% to 15% of
average final compensation; widows benefits rise from 50% to
75%.  Dependent children already receiving benefits immediately
prior to October 1, 1999, will receive the greater of $100 or 5%
of the deceased member's average final compensation.

The widow or unmarried children of a member participating in the
deferred retirement option plan (DROP) who has died in the
performance of duty may elect to receive the member's DROP
amount as an annuity.  Currently, the annual benefit is the
lesser of the amount specified in the Internal Revenue Code in
effect on the last day of the plan year or 100% of the average
compensation for the member's 3 high consecutive years; the bill
eliminates the second alternative.  Current law prohibits
exceeding the combined plan limitation of the Internal Revenue
Code; the bill adds that the prohibition is effective for
limitation years beginning before January 1, 2000.  Technical
changes concerning constitutional revenue limitations are also
included.

FISCAL NOTE:   No impact on state funds.

HB 65 -- ST. LOUIS POLICE RETIREMENT

CO-SPONSORS:  O'Toole, May (108)

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Retirement by a vote of 9 to 0.

This bill makes changes to several provisions relating to the
St. Louis Police Retirement System.  Ordinary disability
retirement allowances will be increased by 15%, rather than the
current 10%, of the member's final average compensation for each
unmarried dependent child.  The combined benefit for multiple
dependents will not exceed 70%, rather than the current 55%.
Members receiving disability retirement benefits immediately
prior to October 1, 1999, will receive an additional benefit the
greater of $100 or 5% of the member's average final compensation
for each unmarried dependent child.  For the death of a member
in service and for death of a retired member, the widow's
pension is increased from 25% to 50% of the member's average
final compensation plus 15%, rather than the current 10%, for
each unmarried dependent child.  Widows and dependent children
of members in the above 2 categories receiving benefits
immediately before October 1, 1999, will receive increases.
Dependent children will receive the greater of $100 or 5% of
average final compensation.  Widows of members who died in
service will receive 25% of the member's final average
compensation, while widows of members who retired in service or
disability will receive an additional amount that increases
their benefit to 50% of the member's compensation.  Benefits for
widows of members who retired before age 55 or before completing
20 years of service were set at 30%; this limitation has been
removed; benefits payable to widows of members who had attained
55 or completed 20 years of service are to be increased by the
method set out for adjustments to service allowances of retired
members.  Benefits for dependent children of a member who died
as the result of an accident are increased from 10% to 15% of
average final compensation; widows benefits rise from 50% to
75%.  Dependent children already receiving benefits immediately
prior to October 1, 1999, will receive the greater of $100 or 5%
of the deceased member's average final compensation.

The widow or unmarried children of a member participating in the
deferred retirement option plan (DROP) who has died in the
performance of duty may elect to receive the member's DROP
amount as an annuity.  Currently, the annual benefit is the
lesser of the amount specified in the Internal Revenue Code in
effect on the last day of the plan year or 100% of the average
compensation for the member's 3 high consecutive years; the bill
eliminates the second alternative.  Current law prohibits
exceeding the combined plan limitation of the Internal Revenue
Code; the bill adds that the prohibition is effective for
limitation years beginning before January 1, 2000.  Technical
changes concerning constitutional revenue limitations are also
included.

FISCAL NOTE:   No impact on state funds.

PROPONENTS:  Supporters say that this bill will raise benefits
for widows and orphans of St. Louis police.  Currently about 450
widows receive benefits, of whom 360 are at the lowest level of
benefit.  This bill will help a substantial portion of them.
The City of St. Louis does not contribute to this retirement
fund, which is designed to remain stable on police contributions
of 7%.  The fund was overfunded by $46.7 million as of October
1, 1998.

Testifying for the bill was Representative O'Toole.

OPPONENTS:  Those who oppose the bill say that while the bill
does not make an immediate fiscal impact on the City of St.
Louis, it almost eliminates the fund surplus.  Should the
economy slow down, an increased contribution from the city may
be required.

Testifying against the bill was Office of the Mayor, City of St.
Louis.

Becky DeNeve, Legislative Analyst

HB 65 -- St. Louis Police Retirement

Co-Sponsors:  O'Toole, May (108)

This bill makes changes to several provisions relating to the
St. Louis Police Retirement System.  Ordinary disability
retirement allowances will be increased by 15%, rather than the
current 10%, of the member's final average compensation for each
unmarried dependent child.  The combined benefit for multiple
dependents will not exceed 70%, rather than the current 55%.
Members receiving disability retirement benefits immediately
prior to October 1, 1999, will receive an additional benefit the
greater of $100 or 5% of the member's average final compensation
for each unmarried dependent child.  For the death of a member
in service and for death of a retired member, the widow's
pension is increased from 25% to 50% of the member's average
final compensation plus 15%, rather than the current 10%, for
each unmarried dependent child.  Widows and dependent children
of members in the above 2 categories receiving benefits
immediately before October 1, 1999, will receive increases.
Dependent children will receive the greater of $100 or 5% of
average final compensation.  Widows of members who died in
service will receive 25% of the member's final average
compensation, while widows of members who retired in service or
disability will receive an additional amount that increases
their benefit to 50% of the member's compensation.  Benefits for
widows of members who retired before age 55 or before completing
20 years of service were set at 30%; this limitation has been
removed; benefits payable to widows of members who had attained
55 or completed 20 years of service are to be increased by the
method set out for adjustments to service allowances of retired
members.  Benefits for dependent children of a member who died
as the result of an accident are increased from 10% to 15% of
average final compensation; widows benefits rise from 50% to
75%.  Dependent children already receiving benefits immediately
prior to October 1, 1999, will receive the greater of $100 or 5%
of the deceased member's average final compensation.

The widow or unmarried children of a member participating in the
deferred retirement option plan (DROP) who has died in the
performance of duty may elect to receive the member's DROP
amount as an annuity.  Currently, the annual benefit is the
lesser of the amount specified in the Internal Revenue Code in
effect on the last day of the plan year or 100% of the average
compensation for the member's 3 high consecutive years; the bill
eliminates the second alternative.  Current law prohibits
exceeding the combined plan limitation of the Internal Revenue
Code; the bill adds that the prohibition is effective for
limitation years beginning before January 1, 2000.  Technical
changes concerning constitutional revenue limitations are also
included.