SB 107 - This act changes the laws regarding the Firemen's Retirement System of St. Louis for persons hired on or after August 29, 2013. The average final compensation for new hires is the average earnable compensation of the member during his or her last five years of service as a firefighter or if the member has less than five years of service, it is the average earnable compensation of his or her entire period of service. Additionally, members hired after August 29, 2013, must have 30 years of service to retire. The act caps the maximum monthly retirement benefit to 70% of the final average compensation for new members. The act prohibits new hires from applying any unused sick leave to their creditable service for retirement purposes.
The act changes the calculation method of the service retirement allowance for those who have been members of the retirement system prior to August 29, 2013, and states that members shall receive a service retirement allowance which is equal to 2% times years of service of the average final compensation for the first twenty-five years of service plus an amount equal to 5% of the average final compensation for each additional year of service after twenty-five years. For new members, the retirement allowance is actuarially equivalent to 2% times years of service of the average final compensation for the first twenty-five years of service, plus an amount equal to four percent of the average final compensation for each additional year of service after twenty-five years.
The act also prevents service retirement allowance from exceeding 70% of the average final compensation based on what the member would be entitled to receive starting at age fifty-five for members hired on or after August 29, 2013. Also, new members will be repaid 25% of the total amount of the member's contribution to the retirement system, in addition to any other retirement allowances.
New members who participate in a deferred retirement option plan (DROP) must retire either when the member elects to stop participation or at the end of five years in the plan, whichever occurs earlier.
The act specifies that if a firefighter does not disclose injuries or conditions in existence prior to retirement system membership then any disability retirement allowance may not be paid for such body parts.
A retirement service allowance, ordinary disability allowance, or accidental disability allowance beginning on or after August 29, 2013 shall be increased by 1% annually.
All disabled retired members must provide to the board of trustees annually an earnings statement from the Social security Administration. If the earnings of a disabled retired member exceeds one and one-half times the current rate of pay, when added to the total retirement allowance, then the future annual retirement allowance shall be reduced to an amount equal to the current rate of pay.
The act specifies that widows and children's benefits shall not begin until the date that the member would have reached fifty-five, but for his or her prior death, except when the member's first day of participation in the system was on or after August 29, 2013, and terminated employment for reasons other than death, ordinary disability, or accidental disability.
The act changes for all members, effective October 1, 2013, the manner in which the system's actuary calculates the amount of the contribution required from the city each year from the current fixed initial liability method to the entry age normal funding method as described in the act.
The unfunded actuarial accrued liability shall be determined under the entry age normal funding method over a thirty year period. When statutory changes cause an increase or decrease in the underfunded actuarial accrued liability then this shall be amortized by an increment in the accrued liability contribution. All other changes in the unfunded actuarial accrued liability, after October 1, 2013, shall be amortized as a level percentage of earnable compensation over the thirty year period commencing at the valuation date.
Finally, the act mandates that the accrued liability contribution will not be paid when the accumulated reserve in the general reserve fund equals or exceeds the actuarial accrued liability.
This act is similar to HB 1857 (2012).