HB 701 Modifies provisions relating to public employee retirement systems

     Handler: Onder

Current Bill Summary

- Prepared by Senate Research -


HB 701 - This act modifies provisions relating to public employee retirement systems.

COUNTY EMPLOYEES' RETIREMENT FUND (SECTIONS 50.1033, 50.1034, 50.1036 AND 50.1038)

This act provides that any participant of the County Employees' Retirement Fund ("CERF") whose compensation is collected from fees or a combination of fees and salary shall annually submit before March 1 of each year to the county clerk or the payroll department proof of all fees or salary received minus operating and other expenses. All contributions required by current law for CERF shall be remitted by the county, through its standard payroll process, on the net amount of fees collected as compensation and salary.

Upon separation from service, any participant who is a county clerk shall request that the county commission complete a certification which verifies the county clerk's length of employment and the two highest years of compensation. The county clerk shall provide documentation to the county commission to support the compensation figures as outlined by the rules and regulations established by the Board of CERF.

Additionally, this act provides that falsifying a record of the system in an attempt to defraud the system, which is subject to fine or imprisonment, includes failing to report to the system compensation earned in a given year and reporting such compensation as earned in the next year in order to make the total compensation of such next year appear higher and inflating the employee's average final compensation.

These provisions are substantially similar to HB 677 (2021) and HB 2473 (2020).

MISSOURI DEPARTMENT OF TRANSPORTATION AND HIGHWAY PATROL EMPLOYEES' RETIREMENT SYSTEM (SECTIONS 104.010, 104.020, 104.035, 104.090, 104.130, AND 104.170)

This act provides that the Board of Trustees of the Missouri Department of Transportation and Highway Patrol Employees' Retirement System ("MPERS") may further define the term "compensation" in a manner consistent with current law.

This act repeals the requirement of one continuous year of service for purposes of restoration of prior service periods for those terminated members of MPERS entitled to a deferred normal annuity who reenter service. Additionally, this act repeals the availability of reelection of joint and survivor benefits within one year of a new marriage for those members whose annuities have reverted to a single life annuity following the death of a spouse. Further, this act repeals the provision relating to the requirement of the Board of MPERS to pay a retired member's designated beneficiaries or estate a death benefit equal to the excess of accumulated member contributions over the total amount of retirement benefits received. The election of chair and vice-chair of the Board by secret ballot is also repealed by this act.

ERROR CORRECTIONS (SECTIONS 104.200, 104.490, AND 104.1060)

Currently, the Board of MPERS and the Board of the Missouri State Employees' Retirement System ("MOSERS") shall correct an error that has resulted in a member or beneficiary receiving more or less than entitled if the system discovers or is notified of such error within ten years after the initial date of the error. This act provides that no error shall be corrected unless the system discovers or is notified within ten years after the later of the member's annuity starting date or the date of error. However, in cases of fraud, any error shall be corrected.

DIVISION OF BENEFITS IN DISSOLUTION OF MARRIAGE ACTIONS (SECTIONS 104.312 AND 104.1051)

This act provides that unused sick leave credited to a member of MPERS or MOSERS shall be excluded in the monthly amount paid to the alternate payee or former spouse for a division of benefits order in a dissolution of marriage action. Additionally, this act specifies that annual benefit increases paid after the member's annuity starting date shall not be considered to be an increase accrued after the termination of the marriage and shall be counted as part of the monthly amount subject to division. For a member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age, any service or compensation between the retroactive starting date and the annuity starting date shall not be considered creditable service or compensation. Additionally, any lump sum payment elected by a member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age shall not be subject to any division of benefits order.

DISABILITY BENEFITS FOR MEMBERS OF THE GENERAL ASSEMBLY AND STATEWIDE ELECTED OFFICIALS (SECTIONS 104.410 AND 104.1084)

Members of the General Assembly and statewide elected officials who qualify for disability shall continue to accrue service until the earliest of attainment of normal retirement eligibility, termination of disability benefits, or the end of his or her constitutionally mandated limit on service for the particular chamber of the General Assembly or office in which he or she was serving at the time of the disablement.

DETERMINATION OF CONTRIBUTIONS FOR UNFUNDED ACCRUED LIABILITIES (SECTIONS 104.436 AND 104.1066)

Currently, contributions for unfunded accrued liabilities shall be determined using level percent-of-payroll amortization. This act repeals this provision and provides only for the entry age normal cost valuation method to be used in determining the normal cost calculation.

SPECIAL CONSULTANTS OF MISSOURI STATE EMPLOYEES' RETIREMENT SYSTEM (SECTIONS 104.515 AND 104.1072)

This act provides that special consultants of the Board of Trustees of MPERS or MOSERS who have reached a normal or early retirement age and become a retiree within 65 days, instead of 60 days, shall receive $5,000 of life insurance coverage.

ANNUITIES AND LUMP SUM PAYMENTS (SECTIONS 104.625 AND 104.1024.6)

A member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age may currently elect to receive lump sum amounts in its entirety or in three equal annual installments. This act repeals the availability of lump sum payments in installments.

WATER PATROL EMPLOYEES (SECTION 104.810)

If an employee of the Missouri State Water Patrol who earned creditable service in the closed plan of MOSERS and who was eligible to transfer membership to the closed plan of MPERS has terminated his or her position and subsequently returns to the same position, the employee will be a member of the system in which he or she was a member prior to termination. If the employee returned to any other position, the employee shall be a member of the system that currently covers that position.

YEAR 2000 PLAN (SECTIONS 104.1003, 104.1015, 104.1018, 104.1024.7 AND 104.1091)

This act repeals the term "year" as it relates to the term "employee" when describing persons employed in positions requiring the performance of duties of not less than one thousand forty hours per year. Additionally, this act provides that the Board of Trustees for the respective system may further define the term "pay" in a manner consistent with current law.

This act repeals the provision that any person shall be a member of the closed plan until his or her annuity starting date if the person elected Year 2000 Plan coverage as the result of forfeiting creditable service with the closed plan and subsequently becoming an employee after August 28, 2002. Additionally, a person who has forfeited creditable service with the closed plan or Year 2000 Plan and becomes an employee on or after August 28, 2021, shall be subject to Missouri State Employees' Plan 2011 ("2011 Tier").

This act provides that any vested former member who terminated employment after attaining normal retirement eligibility shall be considered a member of the retirement system entitled to certain annuities. Additionally, if a member has fewer than five years of credited service upon termination of employment and subsequently returns to a position covered by the system, the member shall become covered by the 2011 Tier and shall receive credited service for all forfeited service upon receiving credited service continuously for one year.

A refund of contributions requested by a former member currently shall be paid by the system after 90 days from the later of either the date of termination or the date of request. This act provides that such a refund, which shall include all employee contributions, shall be paid by the system within an administratively reasonable period, but no sooner than 90 days after the date of termination. Additionally, a former member who receives a refund shall not be eligible to receive any disability benefits, instead of long-term disability benefits.

This act provides that those vested former members who terminated employment after attainment of normal retirement eligibility shall be covered by a member's normal retirement eligibility. Currently, vested former members are not eligible for early retirement. This act provides that only those vested former members who terminate employment prior to the attainment of early retirement eligibility are eligible for such early retirement. Additionally, current law provides that the survivor annuity payable for vested former members is not payable until the deceased member would have reached normal retirement eligibility. This act provides that such survivor annuity is not payable until such time for those vested former members who terminated employment prior to early retirement eligibility. Further, this act provides that the current annual cost-of-living adjustments, which shall not commence until the second anniversary of the annuity starting date, applies only to vested former members who terminated employment prior to the attainment of early retirement eligibility.

RETIREMENT OF JUDGES (SECTION 476.521)

Currently, for judges hired after January 1, 2011, his or her contributions are refunded with four percent interest per year. Beginning June 30, 2022, the interest rate is changed so that it is equal to the investment rate for the fifty-two week treasury bills issued by the United States Department of Treasury. Additionally, the interest rate shall cease upon retirement or death of the judge. A beneficiary of any judge who made contributions currently receives a refund upon the judge's death based on the amount of such contributions. This act provides that the interest credited to such contributions shall be included in the refund calculation.

This act is similar to SB 901 (2020), HCS/HB 1999 (2020), and HB 1105 (2019).

KATIE O'BRIEN


Go to Main Bill Page  |  Return to Summary List  |  Return to Senate Home Page